Allen Bostrom – Universal Accounting

It’s fourth quarter, and so that means it’s time to assess your record keeping position.

Some small business owners think that electronic filing eliminated the need for adequate record keeping.  That is far from the case.  It’s just as critical today that you have good records as it was before.  Electronic filing just made it easier for the IRS to gather your tax forms, but are just as likely,  if not more likely, to request copies of documents that will support and prove your deductions.

To satisfy the IRS requirements you should have documentation that supports your revenues, expenses, and inventory purchases.  Additionally, they may ask for proof that verifies the amount you show for assets.

The general rule for deductions is if you can’t prove it with documentation, the IRS likely won’t allow it.