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!
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.
Make the following a habit and you might be surprised how quickly little things add up to big tax savings and more 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:
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."
If you have paid cash for anything be sure to get a receipt and put it on in a folder of your desk.
Post these 2 files daily and it should only take you a couple of minutes.
File your online receipts that you have posted in your "Tax Backup 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.
You will want to back up these files at least monthly on a CD or DVD to keep with your year-end tax information.
After posting your cash receipts place them in an envelop. You should keep each month in a separate envelop.
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.
Getting accustomed to collecting receipts for everything you do will result in higher tax savings.
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!
5 minutes a day...that's all it takes to save hundreds, perhaps thousands, of tax dollars and put money in YOUR pocket!
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.
Make the following a habit and you might be surprised how quickly little things add up to big tax savings and more 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:
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."
If you have paid cash for anything be sure to get a receipt and put it on in a folder of your desk.
Post these 2 files daily and it should only take you a couple of minutes.
File your online receipts that you have posted in your "Tax Backup 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.
You will want to back up these files at least monthly on a CD or DVD to keep with your year-end tax information.
After posting your cash receipts place them in an envelop. You should keep each month in a separate envelop.
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.
Getting accustomed to collecting receipts for everything you do will result in higher tax savings.
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 income tax preparation for home based businesses for over 3 decades. Her blog: 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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