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What Kind of Records Should You Keep for Your Business Income and Expenses?

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You may choose any record keeping system suited to your business that clearly shows your income and expenses. It can be as simple as a calendar showing business income earned each day and business expenses paid each day or they may be a detailed accounting system. The system of records should include enough information to correctly determine gross receipts, business expenses incurred and the purchase price of assets acquired for use in the business. The taxpayer’s books and records should have supporting documents.

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Payroll Tax Delinquency Penalty

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You are required to pay penalties for undeposited or unpaid employment taxes, and for late payroll tax returns. The IRS will calculate separate penalty for each type of delinquency, and then add up the penalty for each and combine them to determine the total amount.

Liability and negligence penalty for taxes not withheld at all.

The penalty applies when employers fail to withhold taxes at all. This sometimes happens if employees have terminated or have insufficient current wages on which to pay the taxes due to various year-end adjustment items.

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