Krystyna

A question for those of you who sew and or quilt for a living ~ :?:

When you keep track of your purchases for tax purposes, do you also keep track of the type of fabric, yardage, price per yard?

Do you keep paper receipts?

I started entering them into a spreadsheet and was going to dump the paper, but my husband said HANG ONTO THEM!

fabric_fancy

i have an amex & visa business credit cards that i use to make all purchases on.

this makes it very easy for the accountant to do my business returns since i just hand over the monthly statements from both of those cards.

i do keep the invoices from the purchase orders but i've never been asked to produce them since all the info is on the credit card bills.

kountrykreation

KEEP ALL the business receipts, just in case there is ever an IRS audit.

dltaylor

I would definately hang onto them

doris.meek13088

As an accountant I strongly suggest that you keep all receipts for 7 years after you have filed your tax return. In the event you do not have a receipt, make note of who you paid, the date and a description of item(s) purchased. Remember that you get a write off for the mileage on errands for your business also. Keep a log on this on your spreadsheet also.

Krystyna

OK. Off to the waste basket to uncrumple them!
I've been so busy this year that I just haven't been keeping up with my bookkeeping, but this record keeping frenzy started because of the recent scare with the hurricane. How do you file a claim when you don't know what you have on hand?
That's also the question I had about fabric inventory, but that is really hard to track.

PamS

Definitely keep your receipts - they are your 'back up' documents should the IRS inquire - otherwise they have no way of knowing how accurate/truthful your spreadsheet #s are.

ALSO NOTE: MOST receipts are printed on a glossy type of paper that fades in as little as a few months - you really should consider photo copying them. I attach my original receipts to the photo copy and can get several receipts on one page.

Jingle

We have a small business and keep everything that comes in and copies of everything that goes out. I figure it is easier to keep everything just in case we have to prove anything. We have CPAs that so all of our taxes and they need to know everything.

Krystyna

I have my sister who recently retired as the director of the state's tax fraud unit. The first year I brought her my taxes it was a shopping bag chock full of receipts. She nearly had heart failure. I am a little better prepared these days!

Favorite Fabrics

Though all my business records are now kept on Quickbooks - and I'm sure that is where an auditor would turn - we still keep all the paper receipts.

At minimum, if you're keeping records the old way with pencil and paper, you should keep track of the date, who you bought your items from, and the amount, and a general note of what it was. When I buy taxable items (patterns, tools, etc.) those are done as a completely separate transaction from items that I buy tax-exempt (such as thread, fabric, or anything that is either re-sold or is a component of a finished item).

I have had it happen where the IRS is auditing another business, and they have contacted me to provide totals of what I purchased from that other business during a particular time frame. Frankly I was annoyed with that request ...