01/04/2023
🚩Supporting Business Documents🚩
❗SELF-EMPLOYED❗
🔵Purchases, sales, payroll, and other transactions you have in your business will generate supporting documents.
🟡Supporting documents include sales slips, paid bills, invoices, receipts, deposit slips, and canceled checks.
⚠️These documents contain the information you need to record in your books. It is important to keep these documents because they support the entries in your books and on your tax return. ⚠️
❗ You should keep them in an orderly fashion and in a safe place.
🔹️For instance, organize them by year and type of income or expense.
⭕The following are some of the types of records you should keep:
🚩Gross receipts are the income you receive from your business
🚩You should keep supporting documents that show the amounts and sources of your gross receipts.
▪️ Documents for gross receipts include the following:
🔸️Cash register tapes
🔹️Deposit information (cash and credit sales)
🔸️Receipt books
🔹️Invoices
🔺️Forms 1099-MISC
🚩Expenses are the costs you incur (other than purchases) to carry on your business.
⚠️Your supporting documents should identify the payee, the amount paid, proof of payment, the date incurred, and include a description of the item purchased or service received that shows the amount was for a business expense. ⚠️
🚩Documents for expenses include the following:
🔴Canceled checks or other documents reflecting proof of payment/electronic funds transferred
🔵Cash register tape receipts
🟡Account statements
🟣Credit card receipts and statements
🟢Invoices
🚩Note: A combination of supporting documents may be needed to substantiate all elements of the expense.
