{"id":1167,"date":"2018-02-04T01:00:18","date_gmt":"2018-02-04T06:00:18","guid":{"rendered":"https:\/\/www.etax.com\/blog\/?p=1167"},"modified":"2019-07-09T15:23:54","modified_gmt":"2019-07-09T19:23:54","slug":"tax-accounting-cash-transactions","status":"publish","type":"post","link":"https:\/\/www.etax.com\/blog\/2018\/02\/04\/tax-accounting-cash-transactions\/","title":{"rendered":"Tax Accounting: Cash Transactions"},"content":{"rendered":"<p class=\"p2\"><span class=\"s2\">Businesses are responsible for recording all their income, even if it\u2019s a cash transaction, and reporting earnings to the IRS, as taxes are required to be paid on all income. If you accept cash, you\u2019re required to have a method of recording these transactions, such as a voucher or cash receipt pad. Many office supply stores offer generic cash receipt pads that are perfectly acceptable records of transactions. <\/span><\/p>\n<p class=\"p2\"><span class=\"s2\">It\u2019s a good idea to be organized no matter what your business is, so keeping records of your cash payments is a step in the right direction. You\u2019ll need to document more expenses if you want to claim expense deductions and effectively lower your businesses net income as it relates to taxes.<\/span><\/p>\n<p class=\"p2\"><span class=\"s2\">If you\u2019ve made cash payments for things related to your business, you\u2019ll be able to deduct the expense on your tax return, but you\u2019ll be required to show documentation of the expense. Using a petty cash system is one way to document small cash payments.<\/span><\/p>\n<p class=\"p2\"><span class=\"s2\">Cash businesses often run into trouble when reporting income to the IRS. If a business reports a loss many years in a row may be subject to scrutiny by the IRS, and likely to be audited. The IRS refers to industry averages and -standards to find businesses whose income is below the average, focusing on underreported income. Proving that you are negative is more difficult than it sounds, as its harder to document that you <i>didn\u2019t<\/i> accept cash. <\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Businesses are responsible for recording all their income, even if it\u2019s a cash transaction, and reporting earnings to the IRS, as taxes are required to be paid on all income. If you accept cash, you\u2019re required to have a method of recording these transactions, such as a voucher or cash receipt pad. Many office supply [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1499,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[121],"tags":[573,168],"class_list":["post-1167","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-income","tag-cash","tag-income-2"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Tax Accounting: Cash Transactions - eTax.com\u00ae Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.etax.com\/blog\/2018\/02\/04\/tax-accounting-cash-transactions\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Tax Accounting: Cash Transactions - eTax.com\u00ae Blog\" \/>\n<meta property=\"og:description\" content=\"Businesses are responsible for recording all their income, even if it\u2019s a cash transaction, and reporting earnings to the IRS, as taxes are required to be paid on all income. If you accept cash, you\u2019re required to have a method of recording these transactions, such as a voucher or cash receipt pad. 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