Don’t forget to keep copies of your canceled checks for your taxes! Many business owners believe that bank and credit card statements support deductions. But if your statement doesn’t include copies of your checks, it’s not enough. The IRS requires there to be enough detail to support who was paid, exactly what they were paid for, and the date and amount of the payment. You should use the memo line on the check to include this information. So go take a look at your last bank statement and it it doesn’t include copies of your checks, make sure you figure out where you can find copies of your canceled checks.
(Thanks to AIPB for reminding us of this important tip!)