The Quick And Easy Way To Save Tax Dollars
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!
Getting the largest possible deductions for your business need not be time consuming or hard.
Following good habits like those that follow will reward you in more deductions on your income tax and thus more money in your pocket!
You need to record EVERY transaction into your Accounting Software. The easiest way to do this is spend 5 minutes every night or morning and "post" the days receipts.
The following method will make certain that all your receipts have been posted.
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.
Each night (or morning) post" everything in those two files. This should not take you more than 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.
You will want to back up these files at least monthly on a CD or DVD to keep with your year-end tax information.
Use envelops to keep your "hard copy" receipts in after you have posted them. For ease of retrieval I suggest making monthly envelops.
That's it! Receipts are posted, filed and will in all probability never be needed 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.
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!
Getting the largest possible deductions for your business need not be time consuming or hard.
Following good habits like those that follow will reward you in more deductions on your income tax and thus more money in your pocket!
You need to record EVERY transaction into your Accounting Software. The easiest way to do this is spend 5 minutes every night or morning and "post" the days receipts.
The following method will make certain that all your receipts have been posted.
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.
Each night (or morning) post" everything in those two files. This should not take you more than 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.
You will want to back up these files at least monthly on a CD or DVD to keep with your year-end tax information.
Use envelops to keep your "hard copy" receipts in after you have posted them. For ease of retrieval I suggest making monthly envelops.
That's it! Receipts are posted, filed and will in all probability never be needed 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.
Save big at tax time by regularly and consistently recording your transactions.
About the Author:
Karin Russell has owned a small business specializing in income 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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