The Records a Milford Business Should Have Ready Before Its Tax Return Is Prepared

What should you hand over?

Twelve months of statements that match your books, the paper behind the larger numbers, and last year's return. That covers most of it. The rest depends on how the business is set up and whether you paid anyone, which the table further down sorts by situation.

Per Wikipedia on Milford, Connecticut, Milford sits in New Haven County and the South Central Connecticut Planning Region, and its Devon neighborhood is at the mouth of the Housatonic River near Stratford. A shop on the Boston Post Road and a contractor based in Woodmont need the same core records. What changes between them is the form those records feed.

The IRS pages quoted below were checked in October 2026.

What does the IRS expect your books to show?

The IRS page on what records to keep says you can use any recordkeeping system that clearly shows income and expenses, and that your books must show gross income as well as deductions and credits. It adds that for most small businesses, the business checking account is the main source for entries in the books.

So start with every bank and credit card statement for all twelve months of the tax year, for every account the business used. Before you send them, check that each account's year-end balance matches the balance in your books. A gap there gets worked out before the return is prepared, and it's quicker to find it now than in a back-and-forth later.

Income

For gross receipts, the same IRS page lists cash register tapes, deposit information for cash and credit sales, receipt books, invoices and Forms 1099-MISC. For a Milford retailer or restaurant, that means the point of sale reports for the year next to the bank deposits, because card deposits often land as batch totals with processing fees already taken out. If you collect Connecticut sales tax, include those returns as well, so the sales figure on them can be compared with the books.

Expenses and purchases

For each expense, that page says the supporting document should identify the payee, the amount paid, proof of payment, the date incurred and a description showing it was for the business. Canceled checks, card statements, receipts and invoices all count, and the IRS notes that one expense may need a combination of them.

Travel, gift and car expenses come with their own proof requirements, which the same page points to IRS Publication 463 for. If you drive for work, include the mileage log you kept during the year.

Equipment and vehicles

Anything the business bought to keep, like a van, an oven or a run of shelving, needs its own records. The same IRS page lists when and how you acquired it, the purchase price, the cost of improvements, any Section 179 deduction and depreciation taken, how you used it, and, once it's gone, how you disposed of it, the selling price and the expenses of sale. Those figures drive depreciation and the gain or loss when you sell.

Which setup is your business?

The core records apply to everyone. The return column below comes from the IRS pages for sole proprietorships, single-member LLCs, LLCs filing as a partnership or corporation and S corporations. The last column is our own practical advice on what to add, not an IRS list.

Multi-owner businesses get caught on timing. Per the IRS partnerships page, a partnership files an annual information return but does not pay income tax, and each partner reports their share on their own return from the Schedule K-1. So each owner needs that K-1 from the business before their own return can show their share.

What if you had employees or paid contractors?

Send the payroll filings for the year. The IRS forms table for sole proprietors lists Form 941 for withholding and Social Security and Medicare taxes, Form 940 for federal unemployment tax, and Forms W-2 and W-3 for wages. The IRS recordkeeping page says to keep employment tax records for at least four years.

For contractors, the IRS page on forms for independent contractors says to have each one complete Form W-9 and keep it for four years, and to report payments that reach the reportable threshold on Form 1099-NEC. If you are not sure a worker counts as a contractor, our guide to the employee vs 1099 test walks through it. Send the W-9s and a list of what each contractor was paid, so the 1099s can be checked against the books.

How long should you keep all this?

Per the IRS page on how long to keep records, you generally keep the records behind an item on a return until the period of limitations for that return runs out. In most cases that is 3 years. It is 6 years if you leave out income that is more than 25% of the gross income shown on the return, and 7 years for a claim for a loss from worthless securities or a bad debt deduction.

Property records are kept until the period runs out for the year you dispose of the property. The same page says to keep copies of filed returns, since they help with future returns and with any amended one, which is why last year's return is on the list.

Who can pull this together for you?

We prepare and file small business tax returns and do the bookkeeping that feeds them, including catch-up work when a year was never reconciled, from our office at 77 Canoe Brook Rd in Trumbull. Milford is one of the Connecticut towns in our service area, and we also serve small businesses throughout the United States. Our Milford bookkeeping and tax page lists the services for businesses there.

Dave Salerno, who runs Total BizSolutions, has more than 30 years of experience. Statements and forms can come to us through our secure client portal.