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What Business Receipts Do You Need To Keep For Taxes?

Filing tax returns is an exercise that most private individuals and business owners consider unpleasant. However, there is no escaping it. Whether you are going to do it yourself or you are planning to hire a tax consultant, there are certain receipts that you must keep for this purpose.

Proper record keeping is key to successfully filing your taxes. You should keep your records for at least three years after the date of filing returns. This is just the minimum, as the tax authorities can dig into your records many years back. The types of records you need to keep are related to the following:

Gross Receipts

This term refers to all payments coming into the business. Receipts to be kept in this regard include canceled checks, records of deposits into the business accounts such as funds transfer receipts, cash register receipts, invoices etc.

Purchases

These are records of purchases made for the business and may include raw materials for manufacture or office supplies.

Here you will also be required to provide proof of such purchases in the form of cash payment receipts, canceled checks, electronic transfer documents indicating the date, the amount and the payee.

Expenses

What are required here are documents showing expenses incurred in the course of running your business such as utilities, cost of leasing office space, etc.

You must show that the expenses are related to your business by indicating when, where and for what purpose the costs were incurred.

Assets

You are required to produce documents showing the assets of the business such as equipment and furniture. The documents should indicate when and how the assets were acquired, the purchase price, sale price, any loss as a result of fires or flooding for example and the rate of depreciation of the assets.

Documents required include proof of purchase or sale, deductions for depreciation, use, disposal and expenses related to the sale.

Employment records

These are records of employees, salaries and allowances, records of tax deductions and remittances, pension, employee withholding tax certificates, and copies of filed returns.

Keeping relevant receipts is the first steps towards correctly filing your returns. To be on the safe side, make sure you keep all receipts related to your business' expenses, assets, purchases and employees. If the whole exercise feels rather tedious, you are advised to use the services of certified bookkeepers, like GCA Services, who will keep your financial records and receipts organized. 


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