When you own your own small business, one of the biggest challenges about tax season is the pile of receipts that need to be gone through. It can be difficult to know what to keep and what you can throw away when it comes to receipts. Mecham Dicus & Company is here to shed some light on the subject so you know what needs to be kept and what you can get rid of.
What Receipts Should I Keep?
If you plan to use money you spend on items like business supplies, travel and other expenses as a tax deduction for your business, it is important that you have documentation to prove that expense is what you say it is. Some examples of receipts that you would need to keep include:
– Charitable donations
– Medical bills and premiums
– Business traveling expenses
– Mileage logs
– Tuition bills
– Rent receipts or mortgage bills
– Childcare bills
– Utility bills
– & More
What Receipts Can Be Thrown Away?
There aren’t very many business receipts that fall into this category. However, as a general rule of thumb, you don’t have to keep receipts that are less than $75. For instance, if you are going out to a dinner with clients and the bill is $45, you don’t need to worry about that receipt. However, if the bill is over $100, you will want to keep a hold of that one. Expenses like cab fares, parking receipts and tolls won’t require a receipt because you wouldn’t normally get one from any of those places.
What is Required for Receipt of Service?
When keeping receipts, you need to make sure the date, place and nature of the expense is listed on the receipt. One helpful thing to keep in mind is that you can simply take pictures of the receipts rather than keeping the physical copy throughout the year. In fact, it can be much easier when you take a picture of the receipt and make a folder that has all of them organized in it. Just make sure you are backing up your files somewhere, and double check the picture to make sure it has all of the necessary information needed in the picture or it will be unusable.
How Long Should You Keep Receipts & Records?
The IRS has three years from the time you file to open an audit. This means that for a minimum of three years you should keep a hold of these documents that can be proof you aren’t doing anything fraudulent.
Tax Preparation, Filing, Resolution & More in Summerlin, North LV, Henderson, Lone Mountain Village & Greater Las Vegas, Nevada
If you need help keeping your taxes straight throughout the year with your small business, you can rely on Mecham Dicus & Company to help you along the way. We can make sure you have what you need to keep your taxes on the right track. Call us today!