When you have well organized records, it will make it easier for you to prepare a tax returnand answer questions in case you receive a notice from the IRS. Records that should be kept for purposes of an audit and backup information are such things as receipts, canceled checks, duplicate check stubs, or anything representing an item of income or deduction. You must keep record of all of your invoices to customers, otherwise you will be required by the IRS to pay taxes on those sales you did not record. In addition, if you are an employer, you must keep all of your employment records for at least 4 years after the tax is due or paid whichever comes later according to the IRS rules.
Copyright Jeanine Pfeiffer