Top 8 Tax Documents for Small Businesses to Track

Pool parties, vacations, barbeques…we’ve reached that glorious season where everything feels a little slower and lazier. When it comes to our financial records, though, there should be no letting off the gas! There’s no room to relax when it comes to documenting business expenditures or commingling your expenses.  

If you’ve fallen off track for 2022, never fear: we’ve put together a list of some of the most important tax documents to track for your small business.   

**A brief word of warning: we will be mentioning the dreaded “a” word (audit) several times in this blog. We apologize in advance for any stress this may cause, but know that audits don’t have to be scary if you’ve got your ducks in a row, your tax documents organized, and a trustworthy accountant on your side!  

1. Previous Tax Returns   

Should you be audited, the IRS will ask to see your previous returns. So don’t toss them out! Keep them tucked away just in case, and always make sure to have a digital copy.   

Your accountant will also likely request your most recent return to reference for this year’s taxes. (If you haven’t started your accountant search, check out our guide to picking the perfect accountant.)  

2. Receipts  

Do yourself a favor: Don’t wait until tax time to dig up all your receipts for the year. There’s absolutely no reason to heap that stress upon yourself!  

Take the time to find a process that works well for you. You might choose to take photos of your receipts, or rely on your credit card statements. As long as it’s organized and logged in your books, you’re good to go!   

Some of our favorite apps for receipt-tracking:  

• Zoho Expense: Reasonably priced and compatible with most accounting software 
• Quickbooks Online: All-in-one app 
• FreshBooks: A great option for freelancers  

Should you be audited, the IRS will be most concerned with your profit and loss statements. These will be proved with your invoices, which can be placed into one of two categories: payable and receivable.   

Payable invoices might be sent to you from a contractor or supplier, and serve as documentation for your expenses. (Be sure to include a description of the services rendered with each invoice!)  

Receivable invoices serve as documentation of your gross income. They’re equally as important to hold onto!     

4. Payroll Taxes   

If you’ve got employees on your payroll, you’ll need to pay payroll taxes. Keep all of your payroll records digitally for at least three years. Report all new hires to the IRS, and be sure to carefully document any mistakes. They happen!  

5. Office Supply Expenses   

That computer you bought for your business? Tax-deductible. Your new desk? That’s tax-deductible too! Supplies for your office are deductions you’re entitled to, so take advantage of them.  

If your home office meets the IRS regular use test, you’ll be able to deduct much more than just your cost of office supplies. You are entitled to deduct a fraction of your bills (utility, internet, home insurance, etc.) proportional to the size of your home office, so be sure to keep track of them!   

6. Mileage   

Track. Your. Miles. With gas prices at an all-time high, it’s vital that you take the time to track your vehicle and mileage expenses.   

Even if you’re using your personal vehicle, any trip for business counts! Whether you’re depositing a check at the bank or meeting with a potential client for lunch, track those miles with an app or plain old pen and paper.  

Some of our favorite mileage-tracking apps:  

• QuickBooks Online: Can track your receipts and miles (Worth a second mention because it really is all-in-one!)  
• Everlance: Perfect for start-up companies 
• Mile IQ: A budget-friendly option  

Be sure to keep receipts of any routine car maintenance or repairs, as a portion of these costs may be deductible. To stay on the safe side, always ask for an itemized receipt.   

7. Marketing Expenses  

Any marketing expense for your business is tax-deductible. This might include your CRM fees, or the costs of running PPC ads. Be sure to digitally log your receipts into your bookkeeping system.  

8. Bank Statements  

If you haven’t already, now’s a great time to save some trees and go digital with your bank statements. Make sure you’ll have access to those statements for the next three years, as they’ll be further documentation of your income.   

This list certainly isn’t comprehensive, but it’s a solid place to start for that mid-year financial check in. When in doubt, keep it! Be sure to keep all of your records in a safe digital place for at least three years.   

Feeling a little overwhelmed? We’ve got your back! Reach out to KYN Accounting today for trustworthy financial guidance. We’ll do the heavy lifting to ensure your financial records are in tip-top shape for tax season (and every season!).