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ACCOUNTING/Decades of Sensible Accuracy
  • Bookkeeping
  • Software Decisions
    • Implement-Train-Prepare-Review
    • Management Use to Audit Reports
    • Budget-Structure-Relevance


How Long Do I keep My Records?
Below is a printout of the IRS comments on how long to keep records regarding substantiating your income tax records.

In the following situations,

The period of limitations is:

1. You owe additional tax and situations (2), (3) and (4) below, do not apply to you.   3 years
2. You do not report income that you should report and it is more that 25% of the gross income shown on your return.   6 years
3. You file a fraudulent income tax return   no limit
4. You do not file a return   no limit
5. You file a claim for credit or refund after you file your return.*   Later of, 3 years, or 2 years after tax was paid
6. Your claim is due to a bad debt deduction.   7 years
7. Your claim is due to a loss from worthless securities   7 years
* Individuals file a claim for credit or refund on Form 1040X

Compilation, versus a Review, versus an Audit

Compilation: The minimum level of service that an accountant can provide before submitting financial information of a nonpublic entity to a client or others (such as a bank). A compilation is limited to presenting (in the form of financial statements and supplemental schedules) information that is the representation of management or the owner of a company. A CPA does not "audit" or "review" information in the prepared financial statements and/or supplemental schedules. Therefore, a CPA does not express an opinion or any other form of assurance on the financial statements or supplemental schedules. The CPA is simply compiling and reporting data provided to them from their client.

Review:
A "review" involves more work and analysis than a compilation. Similar to a compilation, a review presents (in the form of financial statements and supplemental schedules) information that is the representation of management or the owner of the company. However, a review will result in further work, such as inquiries of Company personnel and analytical procedures applied to the financial data. This type of engagement is substantially less in scope than an "audit" of financial data. Therefore in a "review" engagement (with the limited scope of work performed) a CPA does not express an opinion on the financial information or reports.

Audit:The next level of work that may be performed on financial information is an "audit". The objective of a financial audit is the expression of an opinion regarding the financial statements taken as a whole (for public or nonpublic companies). Therefore, the CPA will write a report and express an opinion about the company's adherence to accounting principles, assist in confirming their accounts receivable balances, report on going concern matters and more. The work requires inquiry, analysis and other procedures.

INCOME TAX VERSUS FINANCIAL AUDITS:
A "financial audit" performed by a CPA should not be confused with or in any way related to the activity of an "income tax audit". An income tax audit is requested by a government agency, such as the Internal Revenue Service. A CPA is a client's advocate in an income tax audit. Therefore - Certified "Public" Accountant - stands for someone working in the public's interest. The CPA works for the public, not the government. Therefore, a CPA works in the client's (public) interest to minimize any additional tax or other assessments against the client in an income tax audit. 

 

Accounting/Quickbooks Help
I started my career working full-time as a bookkeeper to support myself through college. Therefore, I understand accounting from the ground-up! After over 20 years in the accounting field, I can assist you with whatever accounting needs you require:   
  • What should I do and consider when I start a new business?
  • How do I keep my accounting records?
  • What forms and identification numbers do I need?
  • Should I incorporate?
  • What is the best way to keep my records?
  • How long do I keep my records?
  • Can you finish the accounting records for me if I write the checks and deposit the income? (by the way; yes!)
  • What do I do about paying employees or should I hire independent contractors? What is the difference?

The questions above will change for each person asking the questions, as no two business are the same. I tailor my assistance to you based upon your needs and requests. Refers to the Links section for links to other sites, such as QuickBooks software and support. By the way, I am a QuickBooks Professional Advisor and can assist you in setting up or modifying company records on QuickBooks.

There are many software choices available (with differing costs, flexibility & specialties) depending on your record keeping needs. 
 

 

 

Call or Email with any questions!!


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