What types of records should I keep for the Franchise Tax Board?
During business operations, you will come across many types of records related to your income and expense transactions. While it is impossible to list all records, the following are some examples of records to maintain:
- For gains and losses reported on Schedule D, such as sale of real estate or securities, you will need documents to verify the sales price, the cost of the asset you sold plus improvements if any (for example, sales and purchase agreements, escrow papers, copies of checks, brokerage statements, etc.).
- For general expenses, you must document the type of expense, the date and amount of payment, copies of canceled checks, and that it incurred in the operation of your trade or business.
- For revenue/income items, you should keep copies of 1099s, sales invoices, sales agreements or contracts, etc.
- Summary of your business transactions.
- Books and records that support your income, deductions, and credits. These records might include journals and ledgers, as well as cash register records, sales records, bank statements, W-2s, 1099s, invoices, canceled checks, sales agreements, etc.
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