We have a business credit card.Every thing for business goes on it.Just save the statements
And I do that too, but don't you still save receipts? The credit card statements (I use a debit card) are only going to show where the charge was made and not what was purchased. The receipt shows the actual item purchased. Doesn't the tax man require the detail?
On my statements it has the vendor/wholesaler name and most times a phone number.I guess if they want to audit,they can call them.Only receipts we save are gas,campground and entrance fees.Meals at the events we just use a guesstamate of expenses,usually under $300 per event.
"If momma not happy ....Who cares.I have my TH AND my toys .
What about the idea of keeping track of my non-business miles and saying everything else is business? I bought a car specifically for the business but I have commute miles to the office that wouldn't count and I also use it on occasion for private stuff. So it's 80% business and 20% private.
2004 National Tropi-Cal T-350, Class A, Triple slide, 330 HP Cat DP. 2006 Dodge Dakota 4x4 or
2002 Harley FLSTF Fat Boy on a Trailer or
2004 Polaris Quad on the Trailer
One of the best business investments you can make and one of the most important is to find a competent CPA (ask around and get referrals). Then sit down with the person and do a planning session that covers how you will be running your business and expected purchases and employee/self-employed setup and other matters.
I do this every year in January-February timeframe and then do a status check in August so that I am on track for where we need to be at the end of the tax year. If you wait you will find yourself with far fewer options and a greater potential for problems.
It is also in part dependent upon the state where you live and so you want a local CPA and do not rely on advice on forums which may be correct for the poster's state but entirely wrong for where you live and run your business.
I have used the same CPA with 3 different businesses over the past 22 years and he has been invaluable with each and every one.
As someone already pointed out, receipts often fade over time. For that reason, I strongly recommend scanning all receipts, even if you do keep them. I just dug out the paperwork for a band I had back in 2007 and most of the receipts have faded to blank paper (thermal paper receipts and NCR paper receipts just do not last). Fortunately, I scanned all of them back then and have those files backed up (although I'll probably never need them, it's a good feeling to know I have them if I ever do). Since the majority of the physical receipts were faded to the point of being useless, I just now destroyed all of it.
I prepare and file my personal taxes electronically. Since there is so little paperwork to begin with, I just scan everything (all 1099s now) and destroyed the originals. I have serious doubts the IRS will ever have an issue with that should I ever be audited (which is highly unlikely). If I were to ever start up a business again (at my age, also highly unlikely), I would still scan everything and work from the scans but I would just stuff the receipts in envelopes on the odd chance I would need them (I wouldn't waste time physically organizing them because of high likelyhood I would never need them).
Btw, printing copies of scans is wasteful and unnecessary as long as you have multiple backups of your files, both onsite and offsite. For those favoring paper, it can fade, burn, be stolen, damaged or destroyed by fire or water, etc. not to mention the amount of space it eats up. CD/DVDs will not last forever so it is impoertant to remember to replace them with fresh ones every so often if you use them. Under ideal conditions, hardrives will last much longer but are still suceptable to damage. Flash drives (thumb drives, camera cards, SSDs) are even less subject to damage but still can fail. All media becomes obsolete eventually, so you have to make sure to frequently update your stored files to current media. Having multiple backups both onsite and offsite will pretty much ensure you will not lose your data if something goes wrong, such as fire, storm, flood, theft, a cloud back up going down, etc.
* This post was
edited 04/09/12 10:19am by Lady Fitzgerald *