Clean Up Your (Tax) Act: Small Business Edition

Organizing Your Tax Documents

Organizing Your Tax Documents

Having a small business and filing your taxes is a whole lot different from filing personal taxes – and honestly, it’s not a walk in the park, especially if you’ve never done it before. Because this isn’t something we have to do every day, it’s easy to overlook and wind up a little messy and unorganized. Life was much easier as a kid, but now we’re grown-ups with grown-up responsibilities. It’s time we clean up our acts a bit and organize these tax documents.

Waiting until the end of the year to collect our records for tax season is a pain in the a**. We often tend to forget when thinking about what’s important to DO because we’re thinking about what’s important to US. The holidays, family, a time to relax and enjoy the winter… and if you’re not in Florida like we are at SFS… playing in the snow. Who needs responsibility?

SFS Tax is here to help. Just in case your business is newer, we’ve even set up a list of what you’ll need. If you’ve been around a lot longer, you can skip to the file storing part.

Necessary Filing

  • Gross Receipts

    Gross receipts are the income you receive from your business. You should keep supporting documents that show the amounts and sources of your gross receipts. Documents that show gross receipts include the following:

    • Cash register tapes
    • Bank deposit slips
    • Receipt books
    • Invoices
    • Credit card charge slips
  • Inventory

    Any item you buy and resell to customers. This includes the cost of all raw materials or parts purchased for manufacture into finished products. Documents reporting the cost of inventory include:

    • Canceled checks
    • Cash register tape receipts
    • Credit card sales slips
    • Invoices
  • Expenses

    Your documents should show the amount paid and that the amount was for a business expense. Include:

    •  Canceled checks
    • Cash register tapes
    •  Account statements
    • Credit card sales slips
    • Invoices
    • Petty cash slips for small cash payments
  • Travel, transportation, entertainment, and gift expenses

    There are limitations and exclusions, especially under the new law

  • Employment taxes

    If you’ve been taxed as an S-Corp (even LLC’s can be), you must take payroll. Please call us.

  • Assets 

    Tax documents for machinery and furniture you own and use in your business. You must keep records to verify certain information about your business assets. You need these records to figure the write-off  and the gain or loss when you sell the assets. Your records should show the following information.

    • When and how you acquired the asset
    • Purchase price
    • Cost of any improvements
    • Deductions taken for casualty losses, like losses from fires or storms
    • Selling price
    • Expenses of sale

Storage Folders

Try organizing your records by tax year. If you have not already done so, create a folder for the current year’s files. Hint: Organize them chronologically and separate each month.

The Digital Alternative

If more of your records are in digital format, consider creating a tax folder for each year on your computer and then place your digital records into sub-folders using the same format as noted above. But don’t forget to create password protection for each folder!

Rotate and Destroy

Finally, at the end of each tax year place a note on the tax return to confirm the date your tax return was filed. Note on the outside of this file when you can toss the support documentation. Go back to old tax years and shred the old documents that are no longer needed. However, don’t do this unless you know the length of time you will need to save these records, or things will just get messy again. We strongly urge taxpayers, both businesses and individuals, to keep 7 years of tax documents. At SFS, we follow that rule. There are records you need to keep longer – we help clients with this! Give us a call: (855) 355-8010.

Jeffrey Schneider, EA, CTRS, NTPI Fellow has the knowledge and expertise to help you reach a favorable outcome with the IRS. He is the head honcho at SFS Tax & Accounting as well as an Enrolled Agent and a Certified Tax Resolution Specialist.
Now What? I Got A Tax Notice From The IRS. Help! Defining and deconstructing the scary and confusing letters that land in your mailbox. Jeff defines and deconstructs the scary and confusing letters in a fashion that mixes attention to detail with humor and an intricate clarification of what is what in the world of the IRS.

The book is available in paperback and ebook on
For more on SFS Tax & Accounting Services, visit
738 Colorado Avenue Stuart, FL 34994
Phone: 772-337-1040

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  • Eli Lunemann Reply

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    December 6, 2018 at 1:18 am

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