Follow Karen Linkedin Twitter Facebook
Email Karen Email
Financial
Mar 6, 2018

Keeping Good Records, Bookkeeping and Knowing the Difference

Sponsored Content provided by Karen Durda - President, Enrolled Agent, Century Accounting and Tax Services, Inc.

The hardest distinction by far for many of my new business clients - and sometimes tax clients - is the difference between keeping records and having bookkeeping in place.
 
We do these things throughout the year, but never do we put a name to the task. And, if you ever have had the IRS or state agency audit you, you find out quickly what is or is not missing.
 
Keeping records means placing aside certain paperwork for proof. Whether it is a new dishwasher and you want to keep the record of purchase for warranty purposes, or the forms and filing documents with accompanying letters for the creation or dissolution of your business, these constitute “keeping records.”
 
If you have rental or property held for investment, record keeping is very important, as it could mean the difference between paying taxes at sale or conversion or not. Information other than the closing statements for this type of property would be loan origination and depreciation statements showing the amount that was written off every year. (Folks are amazed at this). As the IRS says, “allowed or allowable” and I add, “a deduction not taken is a deduction missed.”
 
Business with employees have more records to keep, but the idea is the same - back up for the who, when, what of employment of the individuals, plus federal and state tax filings. Even if you use an outside service or accountant to help with calculating payroll, it is still the responsibility of the employer to keep records. There is nothing worse than having an employer have a worker’s compensation or employment security audit and find out they never kept copies of anything.
 
When we begin to balance our checkbook, we are in fact doing bookkeeping. That is recording our income and expenses. Businesses go further by placing expenses in various categories to make preparing tax returns or loan papers a breeze (and less hair-pulling at tax time). If you keep a family budget, you, too, are doing what business people do.
 
Bookkeeping does not have to be difficult, just a record of invoices or receipts of income, your checkbook for the business, cash receipts and wage journal of some sort.
 
One last point to this is if you don’t know, ask. The IRS has publications on Keeping Business Records (Publication 583), Depreciation (Publication 946), and Travel, Entertainment and Car Expenses including mileage logs (Publication 463). These are free and available for download as a pdf on the Internal Revenue Service website.
 
Make the job of the auditor easier - and your stress level lower - by having your records and bookkeeping in order, and a favorable outcome can be achieved.
 
Karen S. Durda, EA, President of Century Accounting and Tax Services, Inc., has been in the profession since 1984. As an Enrolled Agent credentialed by the Treasury Department, she has the rights as afforded by Congress to represent individuals and businesses before tax authorities. Since May 2012, she has also had the distinction of being a Dave Ramsey Endorsed Local Provider, assisting in budgeting and financial peace for a four-county area and parts of Myrtle Beach.As a Qualified Business expert with the New Hanover County courts, she has experience and knowledge of various scopes of professions and industries, such as medical, health services, legal, construction, retail, real estate, auto sales and service, insurance and restaurant. Continuous tax law courses throughout the year keep her up-to-date on all tax rules, regulations and law changes, as well as business trends, to better serve her clients.

Century logo final 11918114327
Ico insights

INSIGHTS

SPONSORS' CONTENT
Burrus rob headshot 300x300

Spreading Wings for Flight: 2nd Annual Trade Show Highlights the Ingenuity of UNCW Business Students

Robert Burrus - Cameron School of Business - UNC-Wilmington
Chris coudriet

As the Weather Warms, New Hanover County Remains Committed to Keeping Things Green

Chris Coudriet - New Hanover County Government
Georgiarowe

Salling and Tate Dentistry Launches Annual "Gunner’s Runners" Shoe Collection Event, Aiming to Surpass Last Year's Success

Georgia Rowe - Wide Open Tech

Trending News

Riverlights Could Add 73 More Townhomes To Mix, Site Plans Show

Staff Reports - Apr 18, 2024

Game Over For Michael Jordan Museum At Project Grace

Audrey Elsberry - Apr 19, 2024

City Approvals Push Forward Plans For Former Wilmington Fire Stations

Emma Dill - Apr 17, 2024

Surf City Embarks On Park’s Construction

Cece Nunn - Apr 19, 2024

Taking Marine Science On The Road

Lynda Van Kuren - Apr 19, 2024

In The Current Issue

Surf City Embarks On Park’s Construction

“Our little town, especially the mainland area, is growing by leaps and bounds. So having somewhere else besides the beach for kids to go an...


With Coffee And Cocktails, Owners Mix It Up

Baristas are incorporating craft cocktail techniques into show-stopping coffee drinks, and bartenders are mixing espresso and coffee liqueur...


MADE: Makers Of Important Papers

W.R. Rayson is a family-owned manufacturer and converter of disposable paper products used in the dental, medical laboratory and beauty indu...

Book On Business

The 2024 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

2024 Power Breakfast: The Next Season