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Business Records You Must Keep for Tax Verification
Record Keeping for Tax Purposes

By Jean Murray, About.com Guide

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In today's online environment, it is easy to ignore the importance of hard copy records, but if your business is audited or there is a question about your tax return, you must have these records to verify your income, expenses, and other transactions. This article discusses the kinds of business records you must keep.

1. Capture Information for Business Records

Learn how to set up a business record keeping system to capture information you need for your own purposes and for verification for tax purposes.

2. Keep Records on all Business Assets

You must keep good records on business assets if you want to claim them as tax deductions, for depreciation, for example.

3. Record Cost of Goods Sold

Keep records to show the costs associated with products you are producing to sell or which you purchased for resale.

4. Show Records for Business Income

If you are audited, you must be able to show your business income and prove you are recording all income received. Keeping these records will help you substantiate income.

5. Keep all Records on Business Expenses for Tax Deductions

You can't claim a tax deduction unless you can provide the record substantiating the deduction. So keep records on all business expense; even the smallest expenses can be used to minimize your taxes.

6. Maintain Travel Expenses and Car/Truck Expense Records

Record expenses for use of business vehicles and for business travel, so you can deduct these expenses to reduce your income tax.

7. Keep Records on Barter Transactions

If you wish to claim barter expenses, you must also show barter income. Learn how to record barter transactions for tax purposes.

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US Business Law / Taxes

Business Records You Must Keep for Tax Verification Record Keeping for Tax Purposes