By Kris Bickell
The last thing most people think about when starting a
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
Not only will this make record keeping a lot simpler, but if
you are ever audited (having your tax return reviewed in
by the IRS), you can prove your expenses, and save yourself
2. Write down all your expenses and income as they happen.
As your business grows, you'll have more and more activities
keep you busy. The last thing you'll want to do each April 15
to organize your records for the year. So, it's a good idea to
write down all your financial activities as they happen.
find preparing your taxes will take much less time if you are
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
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
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!
About The Author: Kris Bickell is the owner of
www.Debt-Tips.com, a helpful site for consumers needing
financial help. To learn how you can “bank on yourself”, save
for retirement, and build wealth, sign up for the free “Bank
Yourself” report at: www.Debt-Tips.com