Bookkeeping

The “book” in bookkeeping refers to the financial books, or records, of your business.  If you have a business it is best to keep the books of the business separate from your personal financial records.

The books include all of the transactions that take place in the business and the financial balances.  The transactions are separated into types such as assets, liabilities, revenue and expenses and then classified into categories such as furniture (an asset), loans (a liability), sales (revenue) and rent (an expense).  Once sorted, the transactions can be used to create reports such as a balance sheet or profit and loss statement that help you to run your business and file your taxes.

I would recommend recording your transactions at least weekly.  There are also many apps that allow you to store the related receipts.  Keeping receipts is important for filing your taxes, among other things.  At the end of each month you should receive bank statements that you will want to reconcile (match to your books) in a timely fashion.  At least quarterly you will want to review your key financial reports.  You may have some tax payments to make quarterly (or, occasionally, monthly), as well.

As for an LLC that does not make money, depending upon what its tax type is (such as partnership or corporation), it most likely will still need to file a tax return.  Some LLCs pay taxes directly and some “pass through” their profits or losses to partners or shareholders. Whether or not the LLC or the partners or shareholders would need to pay any income taxes in a year the LLC does not make money depends on the particular tax situation of the LLC.

Bookkeeping is something that should be done contemporaneously or “as you go.” It can be done manually on paper or using software such as spreadsheets or bookkeeping software.

You should keep copies of all business records including receipts. They can be paper receipts or online records including images of paper receipts. Cancelled checks or credit card statements alone may not be sufficient. The records should include the specific product or services.

Since your business is an LLC, you should maintain separate accounts (e.g., checking and savings) for your business. You should not commingle business and personal accounts.

In general, you normally would not need to pay taxes if you did not have a profit. However, some states require payment of an annual tax for registered businesses such as LLCs.

Here’s a link about keeping tax records: https://turbotax.intuit.com/tax-tips/tax-planning-and-checklists/keeping-good-tax-records/L61fGcXtc

What is Bookkeeping and How Do You Do It?

• Bookkeeping involves keeping detailed records of your business’s income, expenses, and other financial transactions.
• To get started:
• Track all financial activity, including sales, invoices, and payments.
• Use accounting software (like QuickBooks or spreadsheets) for better organization.
• Record all transactions consistently to avoid errors and ensure accurate tax reporting.

Should You Bookkeep Daily, Monthly, or Yearly?

• It depends on your business size and activity, but here’s a guideline:
• Daily: Record transactions to keep up-to-date and avoid missing important expenses or income.
• Monthly: Reconcile accounts (bank statements, credit cards) and review financial reports.
• Yearly: Finalize all records before preparing taxes and provide clean financial summaries for tax filing.

Which Receipts Should You Keep?

• Keep receipts and records related to:
• Business expenses: Equipment, software, advertising, office supplies, rent, etc.
• Income: Sales receipts, invoices, proof of deposits.
• Tax-related items: Charitable donations, travel expenses, meals (if applicable for business purposes).
• Digital copies are acceptable but make sure to store them securely for at least 3-7 years, per IRS rules.

Do I Need to Pay Taxes If My LLC Didn’t Make Money?

• If your LLC made no income in the current tax year:
• Federal taxes: You may still need to file a return depending on how your LLC is taxed (e.g., sole proprietor, partnership, S-Corp).
• State taxes: Some states require LLCs to pay annual fees or minimum taxes, even without profit (check state requirements).
• Filing ensures compliance and avoids penalties.
  
  

For more information see: 

• IRS Record Keeping information
• IRS Requirements for LLC Filing 

Please feel free to reach out with any additional questions or concerns you may have and 

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Depends on what kind of LLC you have how you report it.   If you are a Single Member LLC that did NOT elect to be an S Corp, it is a disregarded entity and you file it on Schedule C in your personal 1040 tax return.   

You will need to keep good records.  You may get a 1099 at the end of the year if someone pays you more than $600 but you need to report all your income no matter how small and if you don't get the 1099NEC.  For the future, you should use a program like Quicken or QuickBooks to track your income and expenses.  There is a QuickBooks Self Employment bundle you can check out which includes one Turbo Tax Online Self Employed  return....

http://quickbooks.intuit.com/self-employed