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previous page Previous Page: Publication 225 - Farmer's Tax Guide - Importance of Records
next page Next Page: Publication 225 - Farmer's Tax Guide - How Long To Keep Records
 Use previous pagenext page to find additional occurrences of topic items.Index for this Publication
taxmap/pubs/p225-002.htm#en_us_publink1000131404

Kinds of Records 
To Keep(p4)


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Except in a few cases, the law does not require any specific kind of records. You can choose any recordkeeping system suited to your farming business that clearly shows, for example, your income and expenses.
You should set up your recordkeeping system using an accounting method that clearly shows your income for your tax year. See chapter 2. If you are in more than one business, you should keep a complete and separate set of records for each business. A corporation should keep minutes of board of directors' meetings.
Your recordkeeping system should include a summary of your business transactions. This summary is ordinarily made in accounting journals and ledgers. For example, they must show your gross income, as well as your deductions and credits. In addition, you must keep supporting documents. Purchases, sales, payroll, and other transactions you have in your business generate supporting documents such as invoices and receipts. These documents contain the information you need to record in your journals and ledgers.
It is important to keep these documents because they support the entries in your journals and ledgers and on your tax return. Keep them in an orderly fashion and in a safe place. For instance, organize them by year and type of income or expense.
taxmap/pubs/p225-002.htm#en_us_publink1000131405

Travel, transportation, entertainment, and gift expenses.(p4)


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Specific recordkeeping rules apply to these expenses. For more information, see Publication 463.
taxmap/pubs/p225-002.htm#en_us_publink1000131406

Employment taxes.(p4)


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There are specific employment tax records you must keep. For a list, see Publication 51 (Circular A).
taxmap/pubs/p225-002.htm#en_us_publink1000131407

Excise taxes.(p4)


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See How To Claim a Credit or Refund in chapter 14 for the specific records you must keep to verify your claim for credit or refund of excise taxes on certain fuels.
taxmap/pubs/p225-002.htm#en_us_publink1000131408

Assets.(p4)


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Assets are the property, such as machinery and equipment, you own and use in your business. You must keep records to verify certain information about your business assets. You need records to figure your annual depreciation deduction and the gain or (loss) when you sell the assets. Your records should show all the following.
The following are examples of records that may show this information.
taxmap/pubs/p225-002.htm#en_us_publink1000131409

Financial account statements as proof of payment.(p4)


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If you do not have a canceled check, you may be able to prove payment with certain financial account statements prepared by financial institutions. These include account statements prepared for the financial institution by a third party. These account statements must be legible. The following table lists acceptable account statements.
IF payment is by...THEN the statement must show the...
Check
  • Check number.
  • Amount.
  • Payee's name.
  • Date the check amount was posted to the account by the financial institution.
Electronic funds
transfer
  • Amount transferred.
  • Payee's name.
  • Date the transfer was posted to the account by the financial institution.
Credit card
  • Amount charged.
  • Payee's name.
  • Transaction date.
EIC
Proof of payment of an amount, by itself, does not establish you are entitled to a tax deduction. You should also keep other documents, such as credit card sales slips and invoices, to show that you also incurred the cost.
taxmap/pubs/p225-002.htm#en_us_publink1000131411

Tax returns.(p4)


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Keep copies of your filed tax returns. They help in preparing future tax returns and making computations if you file an amended return. Keep copies of your information returns such as Form 1099, Schedule K-1 and Form W-2.
previous pagePrevious Page: Publication 225 - Farmer's Tax Guide - Importance of Records
next pageNext Page: Publication 225 - Farmer's Tax Guide - How Long To Keep Records
 Use previous pagenext page to find additional occurrences of topic items.Index for this Publication