subject: Getting Ready For Year End: Receipts To Keep [print this page] In this article, I will discuss what receipts to keep and give a review of which taxes and filings you need to be aware of.
-What receipts to keep/what to toss
1. Personal-Only keep those receipts that relate to something on your tax return. Examples:
a. Medical bills/receipts
b. childcare bills/receipts if you took the childcare deduction
c. gambling winnings/losses
d. contributions (both monetary and nonmonetary)
e. Mileage logs for healthcare and charitable time
f. repairs/maintenance receipts on any property you own
g. any investment expense receipts
h. any job expenses receipts you took a deduction for (ex: union dues)
i. any forms that came in the mail to be associated with your tax return (1099s, etc)
j. other-look at each line of your tax return that has a number on it, and keep the documentation for that number!
2. Meals/entertainment for business-these are 50% deductible for taxes
3. Mileage logs for miles driven OR actual auto expenses (gas, oil, repairs, etc)
4. All conference/education related receipts (transportation, hotel, meals, etc)- yes, QuickBooks Bootcamp is a deductible business expense as long as you are currently in business (not just thinking about starting one)
5. All home office related expenses-keep the bills/backup for your calculation of the home office deduction
6. All bills/receipts for large purchases (fixed assets)-see part 3
7. Pretty much any piece of paper that's related to business income and expenses during the year-again, look at the Schedule C on your tax return (which lists the business income and expenses) and make sure you can backup all the numbers listed there.
Review the tax requirements for your business
1. Sales taxes in your state/another state-this is becoming even more of an issue as states are broke.make sure you understand the sales tax laws in any state you may have "nexus" in (means if you have a physical or some other presence there)
2. Employment taxes-if you have employees, make certain you've had knowledgeable help to get your payroll setup properly. Not complying with payroll tax laws can put you out of business.
3. 1099s-This is a hot topic once again. The new Health Care Law has changed the 1099 rules for the worse. Reporting requirements are much more stringent. I'll be covering this in January's blog posts. For now, if you hire nonemployee services (accountant, lawyer, construction labor, cleaning service, etc) please be aware that you need to be sending them a 1099 if you paid $600 or more during the year for the service.
4. Personal Property Taxes-In Michigan, we pay a tax on our business assets through our local city or township. Make sure you know what taxes you are liable for through your local jurisdiction. If you're unsure, ask at the County Clerk's office for help with this. And, check your state website for a booklet or information packet on how to start a business in your state.
5. Other yearly filings-Once again, this is state dependent. I have to file a $25/year fee to register my LLC. Your business may have other requirements depending on your state and type of business. Sometimes, information returns are required, and there can be heavy penalties for nonfiling.
To sum up, be aware of all the licenses and taxes your business is liable for. Sometimes it's best to contact a local CPA as you're getting setup just to make sure you are registered properly in your state.
