Should I keep copies of my business's invoices for tax records?
It's always beneficial to have detailed business records.  There are any number of reasons where you'd need to prove both the types of services you've rendered and the payment history - you've already noted audits (for IRS taxes).  Other possibilities: Whether these records need to be original or electronic might be the topic for another question.
No, even businesses pay taxes quarterly.  So if you formed Nathan, LLC, or otherwise became self employed, you'd still have to file quarterly estimates and make tax payments.  This would cause taxes to be a much more high touch part of your life. However, you should ensure that you're claiming the proper exemptions etc to avoid excessive withholding. We run into this all the time with our EU clients. As far as I can tell, the only requirements when it comes to invoicing have to do with sales tax, which is determined at the state level, and only in the case that items are taxable. It seems that the service provided to you is not taxable and so there is no obligation under Californian law to provide you with the invoice you need.  That said, it would be nice to provide this information to you as a courtesy. We don't provide the information typically required by EU tax authorities on our receipts either, but whenever one of our EU clients requests a more formal invoice we gladly send them one. I just scanned in a single sheet summary of my last two years tax returns. It is something our CPA does for us. How would I post it? Don't worry, I marked out all the personal information.    What is says is I paid over $50K in taxes in 2015. Last year we had one of our biggest contracts put on hold, so I only paid $20K.   I won't have this years figures, because we don't submit them to our CPA until the end of the year. However, this year, we just bought out two other owners at $1.2M, which makes me a 33% owner. The contract is getting restarted (knock on wood), which all together means my personal tax liability is going to be well over $100K.   My company is a commercial company, but we work with the government, and matter of fact some of the stuff we produce was designed and developed by the government (as is many of today's modern inventions - I think you would be surprised).   So lets tackle it one at a time. Pick one of those things that commercial does better than government.   P.s. Higher taxes doesn't mean higher for you, a lot of times it means higher for guys like me or way better than me (which I am perfectly fine with, and matter of fact would support). People who use infastructure more - like large corporations - should pay more for it... Yes. This income would be reported on schedule SE. Normally, you will not owe any tax if the amount is less than $400.  Practically, $100 in a garage sale is not why the IRS created the form SE. I wouldn't lose sleep over keeping track of small cash sales over the course of a year. However, if you have the information I'm not going to tell you not to report it. So long as you don't hate what you are doing, I'd say the price is somewhere in the neighborhood of $100-200 year of income to be worth the bookkeeping. I'd only say more than that if you have a ridiculously complex tax situation, you have an irrational hatred of filling out a few forms once a year, or if you just have such a stupidly large amount of money that even having a few hundred dollars a year to donate to people in desperate need just doesn't mean anything to you. Or if you are under special income limits and just a few dollars of income would put you in a bad situation (like a loss of medical benefits, etc). The reason is actually quite simple: the taxes aren't really that hard or time consuming. I've handled three self-employment businesses in my life, and unless you are trying to itemize every last dollar of business deductions and expenses, or you really want to scrape out every last cent from minor deductions that require considerable extra paperwork, it's a few extra forms on your taxes. Most of the extra taxes are as a percentage, so it reduces the benefits, but really not by much. You don't have to make it extra complicated if the extra complexity doesn't give you a big payoff in benefit. I would suggest you pick the simplest imaginable possible system for accounting for this, so that you might only spend an extra few hours per year on the books and taxes. Don't keep $10 sheet music receipts if you feel it's a burden to try to itemize expenses, etc. Instead, the decision should be if you (or in this case your wife) would enjoy doing it, and bringing in money can just be nice in it's own way. I'd suggest she keep some out for little extra niceties, earmark some for feel-good charitable giving, and then of course sock away the rest. Don't let extra income be an unnecessary burden that prevents you from getting it in the first place. Unfortunately, my taxes tend to be complicated This. In and of itself, is a greater reason to keep the documents. The other answer offered a good summary, but keep in mind, if the IRS decides you fraudulently withheld claiming income, they can go back 7 years.  I bought a rental property in 1987, and sold it in 2016. In that case, keeping the returns seemed the right thing to do to have the paper trail for basis, else I could claim anything, and hope for the best.  I have all my tax returns since my first tax return, 1980. It's one drawer of a file cabinet. Not too great a burden. No, do not file a Form 1099.  You should not issue a form to yourself and you have no separate entity to issue one.  The reporting obligation is Form 1040, plus Schedule C. You may have followed a wrong turn somewhere in the TurboTax questionnaire or it may not have picked up the subtleties of your situation.  The business income is already yours. Some writers use vehicles to hold their royalties and pay themselves.  The questionnaire may have been trying to get at this issue or may have wrongly assumed it.  There are special rules around such entities, so getting an adviser is a good idea. For now, just file Schedule C, remember to deduct your costs (e.g. cost to print the books), and pay your self-employment tax. The regulations you're talking about (TR 1.263) are going into effect starting tax year 2016, so for purchases you made last year they're (kindof...) irrelevant. Kindof, because the IRS promises to not audit those that qualify under the regulations even if they use it before it goes into effect, but it doesn't legally have to. Since the regulations are new, I suggest you talk to a licensed professional who'd explain them to you and interpret them with regards to your specific situation. From my brief read, you can expense under these rules things that you would otherwise capitalize, with the $500 limit to the invoice. Meaning, if you bought a computer paying $500, which you use 50% for your business - you can expense $250. The benefit, comparing to the Sec. 179, is that you're not limited to new items, nor are you limited to business revenue. Otherwise, it looks like the applicability is similar. As I said - talk  to a licensed tax adviser (EA/CPA licensed in your State), since these rules are new and untested, and you should probably have a professional provide guidance. I'm not such a professional. "The personal checks may be due to their bank not issuing the company checks yet and there may also not be a payroll system in place at this time. So far as the W2's are concerned you should probably ask the owner if they plan on distributing them to the employees. If the owner has no interest in making you proper ""on the books employees"" let them know that they should probably be paying you in cash so that if the IRS comes you wont be tied to it. Obviously working in cash (off the books) has its drawbacks (no rights or protections) and benefits (no taxes)." If the business activities are closely related you could combine them into a single Schedule C, but in your case it sounds like it should be two separate Schedule C's. The loss from one will offset profit from the other, and your self-employment and income taxes will be based on the net of the two businesses. Any business can generate losses, make sure your expenses are reasonable and documented, there are plenty of resources out there for helping you decide which expenses are proper for each business. There is some truth to the warning that not showing profit in 2/5 of years can raise flags at the IRS, and they may deem your business a hobby, which disallows losses. That is not a hard rule, legitimate businesses can lose money for years on end without issue, if you're trying to make money at it, you'll likely be fine. "Journal entry into Books of company: 100 dr. expense a/c 1 200 dr. expense a/c 2 300 dr. expanse a/c 3   //   cr. your name 600 Each expense actually could be a total if you don´t want to itemise, to save time if you totaled them on a paper.  The paper is essentually an invoice. And the recipts are the primary documents. Entry into Your journal: dr. Company name   // cr. cash or bank You want the company to settle at any time the balce is totaled for your name in the company books and the company name in your books.  They should be equal and the payment reverses it.  Or, just partially pay. Company journal: dr. your name  //  cr. cash or bank your journal: dr. cash or bank  // cr. company name Look up ""personal accounts"" for the reasoning. Here is some thing on personal accounts. https://books.google.com/books?id=LhPMCgAAQBAJ&pg=PT4&dq=%22personal+account%22+double+entry&hl=es-419&sa=X&redir_esc=y#v=onepage&q=%22personal%20account%22%20double%20entry&f=false" "I would say to only bother keeping the ones you know you'll use for itemized deductions. This includes any unreimbursed business expenses and vehicle licensing fees. There are a lot of other itemized tax deductions possible, but those are two common ones. Also, keep track of your business mileage (mileage before and after the trip, and commuting doesn't count as ""business mileage""). You may also want to keep receipts of all out-of-state purchases if your state is one of those that tries to collect state tax on out-of-state purchases. Ensure your supported charities are 501(c)(3), and they'll give you a receipt at the end of the year. Don't bother keeping fast food or gas receipts (unless they're business expenses)." "In the UK Directgov don't specify anything more than ""records"", which leads me to think that a digital copy might be acceptable. With regards to bank statements, individuals (i.e. not self-employed, or owning a business) need to keep them for between 12 and 15 months after your tax return, depending on when you filed it. Source: Record keeping (individuals and directors) - Directgov" I was only able to find Maryland form 1 to fit your question, so I'll assume you're referring to this form. Note the requirement: Generally all tangible personal property owned, leased, consigned or   used by the business and located within the State of Maryland on   January 1, 201 must be reported. Software license (whether time limited or not, i.e.: what you consider as rental vs purchase) is not tangible property, same goes to the license for the course materials. Note, with digital media - you don't own the content, you merely paid for the license to use it. Design books may be reportable as personal tangible property, and from your list that's the only thing I think should be reported. However, having never stepped a foot in Maryland and having never seen (or even heard of) this ridiculous form before, I'd suggest you verify my humble opinion with a tax adviser (EA/CPA) licensed in the State of Maryland to confirm my understanding of this form. As I write this, the NASDAQ Composite is at 2790.00, down 6.14 points from yesterday. To calculate the percentage, you take 6.14 and divide by yesterday's close of 2796.14 to yield 0.22%. In your example, if SPY drops from 133.68 to 133.32, you use the difference of -0.36 and divide by the original, i.e. -0.36/133.68 = -0.27%. SPY is an ETF which you can invest in that tracks the S&P 500 index. Ideally, the index would have dropped the same percentage as SPY, but the points would be different (~10x higher). To answer your question about how one qualifies a point, it completely depends on the index being discussed. For example, the S&P 500 is a market-capitalization weighted index of the common stock of 500 large-cap US public companies. It is as if you owned every share of each of the 500 companies, then divide by some large constant to create a number that's easily understood mentally (i.e. 1330). The NASDAQ Composite used the same methodology but includes practically all stocks listed on the NASDAQ. Meanwhile, the Dow Jones Industrial Average is a price-weighted index of 30 large-cap companies. It's final value is modified using a divisor known as the Dow Divisor, which accounts for stock splits and similar events that have occurred since a stock has joined the index. Thus, points when referring to an index do not typically represent dollars. Rather, they serve as a quantitative measure of how the market is doing based on the performance of the index constituents. ETFs like SPY add a layer of abstraction by creating an investible vehicle that ideally tracks the value of the underlying index directly. Finally, neither price nor index value is related to volume. Volume is a raw measurement of the total number of shares traded for a given stock or the aggregate for a given exchange. Hope this helps!