Accounting Systems, Computer Consulting, and Recordkeeping - Joel F. Birenbaum, P.C., Phoenix CPAs

Accounting Systems and Computer Consulting

Experience has shown that those businesses which pay attention to accounting systems and procedures are those businesses which are successful and profitable. While this is not the only ingredient to a successful business, inadequate accounting systems and procedures rank among the top five reasons why businesses fail. Our goal is to assist clients in establishing accounting systems and procedures which contribute to the success and profitability of the business.

Whether your needs are for a basic manual accounting system, a stand-alone computer, networked computers, mini-computers, or mainframe computers, we are available to assist in evaluating and implementing the system which best meets your needs. These services may include one or all of the following:

Needs analysis
Software selection
Hardware selection
Implementation
Conversion
Training
Ongoing support
Improving existing computer systems
Year 2000 compliance issues

What to Keep and How Long

Tax records should be kept on a year-round basis, not hastily assembled just for your annual tax appointment. Without tax records, you can lose valuable deductions by forgetting them on your tax return, or you may have unsubstantiated items disallowed if you are audited.

Generally, returns can be audited for up to three years after filing. However, the IRS may audit for up to six years if there is substantial unreported income. The three and six year limits start with the filing of a tax return; if no return is filed, the time limit never starts to run.

Which records are important?

Records of income received
Expense items, especially work-related
Home improvements, sales, and refinances
(for homes with profit potential of $250,000 or more)
Investment purchases and sales information
The documents for inherited property
Medical expenses
Charitable contributions (records vary with value of gift)
Interest and taxes paid
Records on nondeductible IRA contributions

How long should records be kept?

Just how long you should keep records is partly a matter of judgment and a combination of state and federal statutes of limitations. Federal tax returns can be audited for up to three years after filing (six years if underreported income is involved). It is a good idea to keep most records for six years after the return filing date.

There are some records worth keeping permanently, partly due to long-term needs and partly because they take up very little room. Consider permanently retaining a copy of each year's tax return. Contracts, real estate buy/sell records, and records of property improvements should be retained for seven years after the property is sold.

If you are in business, your record requirements are more extensive. Please call us; we will be happy to assist you with a system of record retention.

Birenbaum & Speen, P.C.
Certified Public Accountants
Profit Planning Specialists
4400 North 32nd Street, Suite 105
Phoenix, Arizona 85018
Phone 602-266-5633

Fax 602-266-5758
E-mail: joel@jfbpc.com or mitch@jfbpc.com