Organization comes easy to some and hard for others. When it comes to business records you MUST have a system or most assuredly you will lose money when it comes to tax time. And if you are ever audited it is critical that you have the necessary documents to back up your deductions.
5 minutes a day...that's all it takes to save hundreds, perhaps thousands, of tax dollars and put money in YOUR pocket!
Recording your expenses in order to take the largest possible deduction on your income tax is not hard or time consuming.
Following good habits like those that follow will reward you in more deductions on your income tax and thus more money in your pocket!
Even small transactions should be recorded everyday. If you post to your Accounting Software daily you will find that it takes less than 5 minutes a day.
One way to make sure you have all the receipts "posted" is to use the following method:
For anything that you buy online and get online receipts (confirmations of purchases) save them to a folder on your desktop labeled something like "Daily Receipts."
Any cash receipts you may have acquired during the day can be kept in a folder at your desk.
Post these 2 files daily and it should only take you a couple of minutes.
Make a file in My Documents called "Tax Back Up Files". File your daily online receipts in this folder.
Keeping your receipts by month in your "Tax Backup File" will make them easier to access.
You will want to back up these files at least monthly on a CD or DVD to keep with your year-end tax information.
For your "hard copy" receipts keep monthly envelops to file "posted" receipts in.
Unless you have a problem with a bill you will probably never have to look at these receipts again.
Getting accustomed to collecting receipts for everything you do will result in higher tax savings.
Did you go get copies that only cost 50, pay cash for them and never post it to your accounting program? If so know that you have just LOST tax dollars. Small amounts do add up over the course of a year!
It's guaranteed regular and consistent record keeping will pay big time at tax time! - 15224
5 minutes a day...that's all it takes to save hundreds, perhaps thousands, of tax dollars and put money in YOUR pocket!
Recording your expenses in order to take the largest possible deduction on your income tax is not hard or time consuming.
Following good habits like those that follow will reward you in more deductions on your income tax and thus more money in your pocket!
Even small transactions should be recorded everyday. If you post to your Accounting Software daily you will find that it takes less than 5 minutes a day.
One way to make sure you have all the receipts "posted" is to use the following method:
For anything that you buy online and get online receipts (confirmations of purchases) save them to a folder on your desktop labeled something like "Daily Receipts."
Any cash receipts you may have acquired during the day can be kept in a folder at your desk.
Post these 2 files daily and it should only take you a couple of minutes.
Make a file in My Documents called "Tax Back Up Files". File your daily online receipts in this folder.
Keeping your receipts by month in your "Tax Backup File" will make them easier to access.
You will want to back up these files at least monthly on a CD or DVD to keep with your year-end tax information.
For your "hard copy" receipts keep monthly envelops to file "posted" receipts in.
Unless you have a problem with a bill you will probably never have to look at these receipts again.
Getting accustomed to collecting receipts for everything you do will result in higher tax savings.
Did you go get copies that only cost 50, pay cash for them and never post it to your accounting program? If so know that you have just LOST tax dollars. Small amounts do add up over the course of a year!
It's guaranteed regular and consistent record keeping will pay big time at tax time! - 15224
About the Author:
Karin Russell has owned a small business specializing in income tax preparation for home based businesses for over 3 decades. Her blog: Home Business Owners-Reap the Rewards offers more income tax tips for home business owners. She highly recommends the book 'It's How Much You KEEP, That Counts! Not how much you Make' for all her clients.
