Maintaining detailed and organized records is critical for accurate business tax filing.
At a minimum, you should keep copies of income and expense reports, bank statements, invoices, receipts, payroll records, and any forms filed with the IRS. These documents provide support for deductions and income reported on your return.
Digital bookkeeping software like QuickBooks or Xero can help you keep track of your finances year-round. Backing up your data and storing physical documents securely can protect you in the event of an IRS audit.
The IRS generally recommends retaining business tax records for at least three years, but keeping them for seven years provides additional protection in case of audits or disputes.
