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Question: As a restaurant owner, I want to make sure I’m properly prepared for tax season. What documentation should I be keeping to make the tax-filing process smooth and accurate?
A: Thanks for reaching out, as this is a common question. To ensure a smooth and accurate tax-filing process, it’s essential to compile and maintain the following documentation throughout the year:
1. Tax Identification Numbers:
- Federal Employer Identification Number (EIN)
- State Business Identification Number (BIN)
- Personal Social Security Number (if applicable)
2. Previous Tax Returns:
- Copies of the prior year’s tax returns (consider keeping up to three years of prior returns for reference).
3. Financial Records:
Accounting Spreadsheets, Ledgers, Journals and Reports:
- Balance sheet
- Income statement
Business-Related Expenses:
- General office supplies
- Recurring operational costs (e.g., rent, utilities, subscription services)
- Business-related entertainment, travel and meals
- Marketing and advertising costs
- Professional fees (e.g., attorneys, consultants, accountants, bookkeepers)
- Insurance policy details
- Equipment and asset list
4. Home Office Deductions (if applicable):
- Total square footage of the home and the square footage dedicated to office space
- Mortgage interest or rent payments
- Utility costs (e.g., gas, electric, internet, telephone)
- Home insurance policy/expenses
5. Additional Documentation (if not using bookkeeping services or software):
- Detailed invoices
- Bank statements and credit card receipts
- Deposit slips
- Mileage logs
6. Employee Documentation (if applicable):
- W-4 forms: Employee tax withholding selections
- I-9 forms: Verification of employee legal working status
- W-2 forms: Wage and tax statements for each employee
7. Independent Contractor Documentation (if applicable):
- 1099-MISC forms: Summary of fees and payments for nonemployees
About the Expert
With decades of small business ownership, teaching and advising experience, Sue Meyer works alongside the skilled team of business advisers at Central Oregon Community College’s Small Business Development Center.
