Taxes & Recordkeeping Basics

By William Given

Seemingly, everyone knows someone who has an unorganized stash of receipts tucked away in a shoebox. It could be a breeder or vendor who has them buried in the back of a desk drawer or a dog club where they are stockpiled in a filing cabinet in some corner of the Treasurer’s garage. The question is whether that pile of receipts and invoices should be organized. The real question is twofold: what should be kept, and for how long?

There are, of course, good reasons for breeders, business owners and kennel clubs to keep accurate and up-to-date records. First and foremost, good records can help a breeder or business owner manage the day-to-day operation of their business. Without a record keeping system in place, it is impossible for a club to know how well off they are financially. If you are not keeping accurate records, the Internal Revenue Service could easily view your business as a hobby and disallow many of the expenses you could otherwise legally claim. Also, receipts are audit protection insurance and should be taken seriously.

Accurate records are essential to the preparation of profit and loss statements and balance sheets. The former summarizes the income and expenses of a business during a certain period of time; the latter shows assets, liabilities, and the owner’s equity in the business on a particular date. Profit and loss state- ments and balance sheets are valuable business and organizational management tools, and both are necessary documentation when applying for a business loan from a bank or other lending institution.

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Posted by Alex on Mar 22 2018. Filed under Current Articles, Featured. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.