Keeping accurate business records is essential if you want to save tax money and have adequate records in case of, heaven forbid, an audit.
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."
Cash receipts should be put in a folder on your desk.
Every day (morning or night) post the receipt in the 2 files. Doing this daily takes only a couple of minutes.
After posting your receipts for the day file them on your hard drive in a file called "Tax Back Up Files"
The easiest way to keep your online receipts in order is to put them in a Tax Backup File in files labeled for each month.
Back up your "Tax Back Up" folder monthly. Put them on a DVD or CD and file them with your tax information.
After posting your cash receipts place them in an envelop. You should keep each month in a separate envelop.
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.
By not posting a lot of small receipts you are losing tax dollars. If you go get copies, do you get a receipt even if it's only 50 cents? If you do not and it is not posted in your accounting software then most definitely you are over paying your taxes. Small amounts add up over the course of the year.
Regular and consistent record keeping will pay off for you at tax time guaranteed!
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."
Cash receipts should be put in a folder on your desk.
Every day (morning or night) post the receipt in the 2 files. Doing this daily takes only a couple of minutes.
After posting your receipts for the day file them on your hard drive in a file called "Tax Back Up Files"
The easiest way to keep your online receipts in order is to put them in a Tax Backup File in files labeled for each month.
Back up your "Tax Back Up" folder monthly. Put them on a DVD or CD and file them with your tax information.
After posting your cash receipts place them in an envelop. You should keep each month in a separate envelop.
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.
By not posting a lot of small receipts you are losing tax dollars. If you go get copies, do you get a receipt even if it's only 50 cents? If you do not and it is not posted in your accounting software then most definitely you are over paying your taxes. Small amounts add up over the course of the year.
Regular and consistent record keeping will pay off for you at tax time guaranteed!
About the Author:
Karin Russell has owned a home based business specializing in tax preparation for home based businesses for over 3 decades. Her web site: Home Business Owners-Reap the Rewards offers more income tax suggestions 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 friends that are in business .
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