Originally Posted by fashionconsultant
Do i need to be doing the double entries or is there an easier way that is acceptable to the IRS? .
It depends; aslongas your purpose is to simply prepare an income statement for your biz tax return , you do not need double entry system; in reality,
Many small biz owners, to save bookkeeping fees, prepare their own income statements for themselves .however ifyou need to prepare your financial stmt,i.e., balance sheet/income stmt, or cash flow stmt, for your small biz, then, you need double entries. There are advantages to the double-entry accounting method, however, that should be considered. A double-entry system increases accountability -- an important factor if you have investors. The double-entry method also allows you to more easily prepare financial statements. Most accounting software programs (Quicken, Quickbooks, etc.) use the double-entry method.
If you do need to use the double-entry method and are not familiar with accounting, consider hiring an Enrolled Agent/ A CPA doing taxes.
Many a small business has failed due to a lack of proper bookkeeping. One of the most important elements shared by all successful businesses of any size is keeping accurate records, which is also a legal requirement. Besides unnecessary fees such as overdrafts and late charges, a lack of poor records also attracts the attention of the IRS and can be the reason for an audit and other tax consequences.