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.
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!
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.
Use the following method you will be assured that all your receipts have been accounted for.
Make a folder on your desktop labeled "Daily Receipts" For anything you purchase online, save a copy of that in your "Daily Receipts" file.
If you have paid cash for anything be sure to get a receipt and put it on in a folder of 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.
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.
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.
For your "hard copy" receipts keep monthly envelops to file "posted" receipts in.
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!
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.
Save big at tax time by regularly and consistently recording your transactions.
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.
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!
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.
Use the following method you will be assured that all your receipts have been accounted for.
Make a folder on your desktop labeled "Daily Receipts" For anything you purchase online, save a copy of that in your "Daily Receipts" file.
If you have paid cash for anything be sure to get a receipt and put it on in a folder of 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.
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.
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.
For your "hard copy" receipts keep monthly envelops to file "posted" receipts in.
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!
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.
Save big at tax time by regularly and consistently recording your transactions.
About the Author:
Karin Russell has owned a home based business specializing in tax preparation for home based businesses for over 3 decades. Her website: 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 customers.
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