Keep Your Receipts, Mrs!

You may choose any recordkeeping system suited to your business that clearly shows your income and expenses but, yes, YOU NEED TO KEEP RECORDS, per the IRS. The business you are in affects the type of records you need to keep for federal tax purposes. Your recordkeeping system should include a summary of your business transactions. This summary is ordinarily made in your business books (for example, accounting journals and ledgers). Your books must show your gross income, as well as your deductions and credits. For most small businesses, the business checking account is the main source for entries in the business books.