When operating a company in America, keeping regular and accurate accounting records is a legal requirement. The IRS and state tax offices expect all income and expenses to be documented.
Recommended Accounting Software
- QuickBooks — Most popular for small businesses
- Xero — Ideal for international companies
- FreshBooks — Perfect for freelancers and small businesses
Basic Accounting Principles
- Matching Principle: Revenue and expenses reported in the same period
- Accrual Basis: Preferred by larger companies
- Cash Basis: Typically used by LLCs
Important Tax Forms
- Form 1120 — Corporation
- Form 1065 — Partnership
- Schedule C — Single-member LLC
Record Retention
It is recommended to keep your accounting records for at least 7 years. Working with a professional CPA (Certified Public Accountant) ensures you maximize tax advantages and avoid legal issues.