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Thread: TAX TIME RECORD KEEPING

  1. #1
    Swap Hosts Krystyna's Avatar
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    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!

  2. #2
    Super Member fabric_fancy's Avatar
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    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.

  3. #3
    Senior Member kountrykreation's Avatar
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    KEEP ALL the business receipts, just in case there is ever an IRS audit.

  4. #4
    Super Member dltaylor's Avatar
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    I would definately hang onto them

  5. #5
    Junior Member doris.meek13088's Avatar
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    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.

  6. #6
    Swap Hosts Krystyna's Avatar
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    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.

  7. #7
    Senior Member PamS's Avatar
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    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.

  8. #8
    Power Poster Jingle's Avatar
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    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.

  9. #9
    Swap Hosts Krystyna's Avatar
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    Quote Originally Posted by Jingle
    We have CPAs that so all of our taxes and they need to know everything.
    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!

  10. #10
    Super Member Favorite Fabrics's Avatar
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    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 ...

  11. #11
    Swap Hosts Krystyna's Avatar
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    Just got off the phone with tax fraud investigating sister. She said keep it all for three years.

  12. #12
    Power Poster ckcowl's Avatar
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    i keep all of my receipts! my accountant always wants to see the paper trail.
    i keep a running tally (spreadsheet) for my own inventory- and way to keep track-making it easier when i go in to have my taxes done- but there is also a folder with every reciept- office supplies/postage/materials/supplies-
    i also keep itemized invoices for every sale- or quilting fee.

  13. #13
    Super Member Glassquilt's Avatar
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    You might still be able to buy an old-fashioned book for bookkeeping. If your business is big enough, get a computer program.

  14. #14
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    It depends on how your licensing agency wants them. I live in Colorado, and I file quarterly taxes to the state and annual business taxes to the city. For the state I don't have to list what the items are, only total amounts. For my city licensing I have to list everything and show what the purchases were at the end of the tax year. I only have to list categories such as thread, batting, equipment, notions, etc and I do not have to show quantities.
    But I keep all of the paper receipts. When I've filed my quarterlies, I staple everything together because I'm an absolute expert at misplacing things.

  15. #15
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    Quote Originally Posted by 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!
    Should you ever be audited, you could need the paper receipts.

  16. #16
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    You must hang on to the paper receipts, and keep excellent records. That way if the government decides to audit you, you will be well prepared.
    Please don't ask me how I know this, we owned a business for many years, been there done that.

    Kat

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