Running a small business is difficult enough, but the task is further complicated by a poor record-keeping system that makes crucial documents hard to find when you need them most. In addition to wasting time hunting for receipts and invoices, your tax accounting professional could miss valuable deductions if you misplace supporting documents. While you should never discard any records related to running your company, some should be carefully filed away.

4 Documents Every Business Owner Should File

1. Tax Returns & Records

While the IRS recommends keeping your tax returns for at least three years, the safest approach is to digitize them so they remain in perpetuity. You should also file away all employment records for a minimum of three years and maintain accurate sales tax records. If the IRS has questions about your returns later, having all of your documentation will make an audit smoother.

2. All Legal Documents

Contracts with vendors, partnership agreements, and employment records are considered legal documents. Keep these, along with your articles of incorporation or other papers related to registering your business. If disputes arise later on, having hard copies of original documents can prevent long and costly legal battles.

3. Gross Income Records

Even if you have an accurate bookkeeping system in place, you should still keep sales records, deposit slips, credit card charge receipts, and any 1099-MISC forms you received from clients. These records are useful if you’re audited, planning to sell your business, or encounter any other situation that requires proof of income.

4. Evidence of Operating Costs

In addition to your gross receipts, maintain careful records of all expenses, including equipment and material purchases, payroll, and invoices paid. Your tax accounting professional will also need evidence of any business-related travel, entertainment, or other costs associated with running your operations.
 

For more information about the types of documents you should hang onto, contact Linda M. Shiraiwa CPA, PS. Whether you need year-round bookkeeping or tax accounting services for your Gig Harbor, WA, business, you can rely on her to keep your finances in order. Visit her website to see an overview of her services, or call (253) 858-6030 to make an appointment today.