Skip to main content Skip to search
(754) 229-9222
tax@nk-finservice.com

Bookkeeping

BOOKKEEPING SERVICES

Maintaining your books throughout the year is not just about collecting receipts; it is the foundation of your business’s financial health. Our team of experts with international experience takes over all routine processes, allowing you to focus on what matters most.

Benefits of working with us:

  • Continuous Financial Control: You will always know the real-time status of your accounts, income, and expenses.

  • Tax Risk Minimization: Regular record-keeping helps avoid errors, penalties, and issues with the Internal Revenue Service (IRS).

  • Tax Season Readiness: Forget the April rush. By the end of the year, your books will be perfectly prepared for tax filing.

  • Informed Decisions: Clear financial reports help you plan investments and scale your business with confidence.

CATCH-UP BOOKKEEPING (RESTORATION)

If you haven’t kept up with your bookkeeping during the year or discovered critical errors in past periods, it’s not a reason to panic—it’s a signal to take action. We specialize in “rescuing” disorganized or neglected accounts.

How we get your affairs back in order:

  • Full Reconstruction: We gather data from bank statements and invoices to recreate your financial picture from scratch.

  • Error Correction: We identify and resolve incorrect entries that could lead to overpaid taxes or audits.

  • Balance Reconciliation: We prepare accurate profit and loss statements, even if some primary documentation is missing.

  • Quick Start: We promptly close the “backlog” of past months so you can start the new period with clean books.

Who is required to keep records?

The requirement to maintain records applies to all business participants:

  • Sole Proprietors: Even if the business is part-time or a side hustle.

  • Corporations (C-Corp and S-Corp) and Partnerships: Regardless of asset totals or the number of employees.

  • Self-Employed and Independent Contractors: Anyone working for themselves and earning income.

  • Exempt Organizations: Even if tax-exempt, they must keep records to prove they meet the requirements of their status.

What are the IRS requirements for bookkeeping?

According to IRS rules, every business must maintain a record-keeping system that clearly reflects all income and expenses. While the law usually does not require a specific form of bookkeeping, your system must meet the following criteria:

  • Documentary Support: You must keep all supporting documents—receipts, invoices, bank statements, canceled checks, and payment stubs.

  • Burden of Proof: The responsibility to prove every figure on your tax return lies with you. Without a supporting document, the IRS has the right to disqualify a deduction and assess taxes plus penalties.

  • Retention Periods: Generally, keep records for at least 3 years after filing. However, for payroll taxes, this period is at least 4 years, and in some cases, the IRS can request documents from the last 6–7 years.

  • Electronic Records: The IRS fully recognizes electronic records as long as they are complete, accurate, and accessible for inspection upon request.

Why it matters now: If your records were not kept or were kept incorrectly, you not only risk an audit but likely overpay taxes by missing legal deductions. We help restore your transaction history and bring your records into full compliance.

Is anyone exempt from keeping records?

The law does not provide a total exemption from record-keeping for those engaged in commercial activity. However, there are important clarifications:

  • No Strict Format: The IRS does not require a specific accounting system (like double-entry). You can choose any system that clearly reflects your income and expenses.

  • Minimal Income: If your activity is a hobby rather than a business, requirements may be simpler, but income verification is still necessary for tax reporting.

  • Calendar Year: If you do not keep formal books or records, you are required to use the calendar year as your tax period.

What happens if I don't keep records?

  • Burden of Proof: The responsibility to prove the data on a return always lies with the taxpayer.

  • Loss of Deductions: Without supporting documents, the IRS has the right to disqualify your business expenses, leading to higher taxes and penalties.

  • Penalties: A lack of records can be considered negligence, resulting in additional financial sanctions.

Recommendation: Even for very small businesses, it is recommended to keep all bank statements and receipts for at least 3 years (general records) and 4 years (payroll data).

Who is required to file a Balance Sheet (Schedule L)?

In the US tax system, the requirement to submit a balance sheet depends on the business structure and financial thresholds.

Thresholds: Most small businesses are exempt from Schedule L if they meet both criteria:

  • Total Receipts: Less than $250,000.

  • Total Assets: Less than $250,000 at the end of the year (for Partnerships, the asset threshold is $1,000,000).

Requirements by Entity Type:

  • C-Corporations and S-Corporations: Must file a balance sheet if receipts or assets exceed $250,000.

  • Partnerships (LLC): Must file if receipts exceed $250,000 or assets exceed $1,000,000.

  • Sole Proprietorship (Sch C): Individuals usually do not file a balance sheet, as they only report income and expenses.