Good Recordkeeping Helps Taxpayers
NYS Tax Department Encourages Taxpayers to Start the Year Right by Keeping Accurate Tax Records
NEW YORK – The New York State Department of Taxation and Finance today encouraged taxpayers to start the New Year right with a resolution to maintain well-organized, detailed, and accurate tax records – and to keep the records for at least three years.
“All taxpayers should keep this New Year’s resolution, especially the self-employed, because good recordkeeping helps a business track progress and increases the likelihood of success,” said New York State Commissioner of Taxation and Finance Jerry Boone. “It also helps ensure error-free tax returns and provides the necessary documentation to prove the accuracy of returns should the need arise.”
Self-employed persons may include landscapers, contractors, builders, painters, plumbers, electricians, babysitters, and housecleaners, as well as other independent contractors.
Good recordkeeping is critical for filing sales tax returns. Business owners – including self-employed persons – who are required to collect sales tax must keep records that enable them to file an accurate sales tax return. This includes keeping detailed records of each sale made, the amount of the sale, and the sales tax collected on the transaction.
Claiming a credit
Keeping excellent records has another benefit for the self-employed – the ability to show eligibility for one of New York’s most popular tax credits, the Earned Income Tax Credit (EITC). Each year, New York taxpayers receive more than $5 billion in combined EITC benefits from the state, the federal government, and New York City. In 2015, New York State alone paid more than $1 billion in EITC credits.
Receiving the credit, however, hinges on the ability of taxpayers to prove their earned income and expenses claimed on their income tax return. “By keeping good records and avoiding other common errors, you’ll be sure to get the credit you deserve,” Commissioner Boone added.
For more information
NYS Department of Taxation and Finance