What type of records to keep

After records have served their primary administrative purpose, it may be necessary to preserve them to document the expenditure of public monies and to account for them for audit purposes and requirements. Records worthy of permanent preservation for reference and research purposes are selected for deposit in the state Archives at the Connecticut State Library. These records are retained for many uses. Public officials use archival records to protect the government, to give consistency and continuity to their actions, to prevent duplication of efforts, and to find successful ways for solving recurrent problems.

Records are also kept to protect citizens' legal rights and for research in many fields to advance general knowledge and understanding. Records used in scholarly studies and investigations. Researchers want to extend human knowledge using basic historical evidence. These records may include important information on individuals, corporate bodies including their problems and conditions, and significant historical events.

Many of these records have informational, administrative, and archival value. The Connecticut Uniform Electronic Transactions act CUETA defines an electronic record as "a record created, generated, sent, communicated, received or stored by electronic means, including, but not limited to, facsimiles, electronic mail, telexes and internet messaging" CGS, Section Electronic messages sent or received in the conduct of public business are public records.

Types of Records. This will report your non-employee compensation. Invoices, receipts, and credit card statements are all helpful documentation you should keep. Other examples include canceled checks and statements from online purchasing platforms like PayPal. Your business should have at least the last three years of tax returns. Not only might you refer to it when completing future returns, but it can come in handy if the IRS audits you or asks you about an item on the return.

You can compare this to other years for tax planning purposes. Keep any documents showing when you bought these assets and how much they originally cost. Both for the purposes of tax preparation and financial management, keep these business records for at least three years after you file your taxes.

The IRS recommends extending the period to six or seven years for issues like unreported income or bad debts. If you worry about maintaining a stack of paper at your business, consider using the digital option.

You can often get electronic versions from your accountant. You can also scan documents to your computer or to a secure cloud service. Saturday, October 30, Here are 6 things every business must keep track of for tax purposes. Share on Facebook Share on Twitter. Either way, you must keep a record of each expense -- jotting down a brief description of the business expense, the date incurred, the amount, and to whom it was paid. On the profit side of the equation, you must also keep similar records of any income your business receives.

Keeping your business's records on a computer follows the same principles as a manual system, except the computer automates the process so it's faster and more accurate.

A simple-to-use software program like Quicken Intuit or MS Money Microsoft eliminates the need for a handwritten set of books. You input each transaction whether expense or income into the software program and assign a category to each -- whether a descriptive word like "advertising" or a number code such as " Regardless of how you keep your business's records, you must still hold onto what accountants call "source" documents. These are the receipts, bank statements, purchase invoices, and other records that back up the numbers that get entered into your record-keeping system.

To learn more about bookkeeping and accounting strategies for your business, see Nolo's article Bookkeeping and Accounting Basics. Most new businesses don't have the money to hire bookkeeping help, at least not right away.

This makes it that much more important for business owners to choose a record-keeping system that they're comfortable with. But what if you can afford to hire a bookkeeper? Does this mean that you don't need to worry about the ins and outs of different record-keeping systems? In a word, no. Tax law places responsibility for most bookkeeping and accounting errors squarely on the business owner.

So, even if you've hired a bookkeeper to handle your business's books on a day-to-day basis, it is still essential that you have a good grasp of general bookkeeping concepts and an awareness of what's going on with your business's record-keeping practices.

For detailed information on how to keep the books for your business -- including what types of records to keep, how to create ledger sheets, and everything else you need to know about business accounting and taxes -- get Tax Savvy for Small Business , by Frederick W.

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