3 Tips For Keeping Proper Tax Records For Your Home Business And
Keeping The Irs Happy

3 Tips For Keeping Proper Tax Records For Your Home Business And Keeping The Irs Happy



3 Tips For Keeping Proper Tax Records For Your Home Business – And Keeping the​ IRS Happy!
The last thing most people think about when starting a​ business is​ doing taxes .​
But proper planning will make doing your taxes much easier - and keep the​ IRS happy!
Here are 3 simple tips for keeping proper records:
1 .​
Whenever you​ buy anything for your business,​ keep the​ receipt!
Not only will this make record keeping a​ lot simpler,​ but if​ you​ are ever audited (having your tax return reviewed in​ detail by the​ IRS),​ you​ can prove your expenses,​ and save yourself money .​
2 .​
Write down all your expenses and income as​ they happen.
As your business grows,​ you'll have more and more activities to​ keep you​ busy .​
The last thing you'll want to​ do each April 15 is​ to​ organize your records for the​ year .​
So,​ it's a​ good idea to​ write down all your financial activities as​ they happen .​
You'll find preparing your taxes will take much less time if​ you​ are organized .​
3 .​
Learn how to​ save money on​ your taxes.
As you​ learn about taxes,​ you'll find that there are many deductions (expenses that reduce your income,​ and therefore your taxes) you​ can take that are not obvious .​
When using your home office,​ you​ may be able to​ deduct (at least partially) repairs you​ make around the​ house,​ utilities,​ your home's value at​ the​ time you​ start your business,​ and more .​
The more you​ know about taxes,​ and the​ more organized you​ are in​ keeping records,​ the​ more time and money you'll save at​ the​ end of​ every year!
What happens if​ you​ don't keep proper records?
Individuals with small businesses are the​ most likely to​ have their tax returns audited by the​ IRS .​
If you​ don't have a​ receipt,​ you​ will likely lose the​ deduction and owe the​ IRS money .​
And while an​ audit does not have to​ be feared,​ you​ should be prepared - the​ more organized your records,​ the​ easier it​ will be to​ prove your case .​
If you​ don't have one,​ get a​ file box and some folders at​ your local office supply store (these supplies are deductible,​ so keep your receipts!) and create a​ filing system for your business .​
Put all your receipts in​ the​ proper folders,​ and put them in​ a​ safe place .​
Another way to​ save yourself time is​ to​ record all of​ your business transactions - expenses and income - on​ a​ spreadsheet on​ your computer .​
Keep a​ column for income,​ advertising,​ supplies,​ etc .​
You don't need to​ be a​ computer expert .​
But keeping accurate,​ organized records will help you​ save time when you​ fill out your taxes at​ the​ end of​ the​ year .​
And it​ can help you​ plan,​ by giving you​ a​ snapshot or​ your financial progress whenever you​ need it .​
Which may come in​ handy when you​ need to​ place ads,​ borrow money - or​ take a​ much needed and well-deserved vacation!




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