If you want to save money on your taxes it is of the utmost importance that you keep accurate records. And keeping good records will surely help you if you should ever be audited.
Keeping your business records can be accomplished in as little as 5 minutes per day. And what a reward come tax time. You could save hundreds or even thousands of tax dollars and pocket the money instead of giving it to Uncle Sam!
The amount of time it takes to record your expenses if done on a consistent basis is less than 5 minutes a day and is not hard.
Little deductions quickly add up to big tax savings. Make it a habit to consistently post your expenses and you will put money in your pocket!
Every little transaction should be posted in your Accounting Software. Spend just 5 minutes at the close of business everyday (or in the morning if that works for you) post the day's (or previous day's) receipts.
One way to make sure you have all the receipts "posted" is to use the following method:
Make a folder on your desktop labeled "Daily Receipts" For anything you purchase online, save a copy of that in your "Daily Receipts" file.
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.
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.
Putting a backup on a DVD or CD monthly is a good habit to get into. Keep these backups with your year-end tax records.
Use envelops to keep your "hard copy" receipts in after you have posted them. For ease of retrieval I suggest making monthly envelops.
These receipts will be filed with your year-end tax records. Unless a problem arrives you will probably never have to deal with these receipts again.
Get in the habit of collecting a receipt for everything you do!
Over the year a lot of little deductions can cost you tax dollars! For instance did you go get copies for 50 cents and fail to post it in you accounting program. That's lost tax dollars!
It's guaranteed regular and consistent record keeping will pay big time at tax time!
About the Author:
Karin Russell has owned a small business specializing in tax preparation for home based businesses for over 3 decades. Her web site: Home Business Owners-Reap the Rewards offers more 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 .
No comments:
Post a Comment