When filing tax returns it is critical to keep records of administrative and business expenses, bank statements, business activities, payroll records, purchase invoices, rent receipts, sales receipts, transportation expenses and utility bills.
Business persons are not required to submit supporting records in association with their Income Tax Returns, but they should maintain proper records for at least six years. Keeping proper accounting records has its benefits. Here are five benefits of proper record keeping:
- Well-maintained records shorten the time length of audit.
Business operators may be asked to verify information filed and to produce records with their returns. People having proper records ensure that their records will be examined quickly and will allow for an accurately filed return. Proper record keeping allows you to keep track of your spending. It also allows you to budget your finances and successfully carry out the important activities that are required to run a business.
- Well-kept records ensure tax savings.
Keeping proper records gives you proof of your business expenses, rather than just relying on your memory. This ensures accurate bill-paying, as the records serve as a reminder of the expenses entitled to claim. Maintaining proper records means you can easily claim tax savings.
- Good records allow you to verify business expenses and income.
They also help with tax audits. A tax auditor requires you to have proper records in order to make a determination based on expenses and income, as well as the type and size of your business and where it is located. Maintaining good records is critical if you want to always know how much money you have to make business improvements.
- Proper records provide an accurate picture of your business operations.
Tax auditors may use indirect methods to estimate your business expenses and income. Your records and books can provide the auditor a true picture of your business operations, so it is vitally important to keep organized records.
- Properly kept records provide the best information about a business’ financial position.
Keeping proper records allows for a secure financial position in business. An analysis of financial records is helpful in making informed decisions and can aide in changing the business focus. Proper record-keeping means that financial information such as last quarter profits are quickly accessible. By being up-to-date and complying with the laws, you will always have a clear picture of your business.
Why Choose Geraldine A. Clahar, CPA Firm
Geraldine A. Clahar, CPA, has over 30 years’ experience as a professional accountant. Her background includes work in both public accounting, (with three years at KPMG’s New York office), and private accounting in the healthcare industry. She holds a BBA in accounting from CUNY Baruch College and an MBA in Taxation from St. Johns University. Her firm, G.A. Clahar, CPA serves small- to-medium-sized businesses as well as individuals, servicing all of their accounting, bookkeeping, tax, and financial planning needs.
Our Overall Services Include:
- Assistance with bank loan applications
- Business consulting, budgeting and forecasting
- Financial statement compilations, review, and analysis
- Notary public
- Tax filings
- Assistance with obtaining federal and state Minority and Small Business Certification
About Our Firm
Our experience in both public and private accounting provides us with a set of skills usually found only in large accounting firms. But our small size means that we offer a high level of attention and personalized service to each client.
In the field of taxation, rules are updated or become obsolete very quickly. We are constantly refreshing our knowledge base to stay on the cutting edge in the accounting and tax fields.
For professional, attentive service, no matter the size or scope of your organization, whether it is for-profit, not-for-profit or for individuals, contact us today for an appointment.