If you want to save money on your taxes it is of the utmost importance that you keep accurate records. And keeping good records will surely help you if you should ever be audited.
Record keeping does not have to take long. In fact you can keep accurate records in just 5 minutes a day.
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.
The following method will make certain that all your receipts have been posted.
Make a folder on your desktop labeled "Daily Receipts" For anything you purchase online, save a copy of that in your "Daily Receipts" file.
Cash receipts should be put in a folder on your desk.
Every day (morning or night) post the receipt in the 2 files. Doing this daily takes only a couple of minutes.
After posting your receipts for the day file them on your hard drive in a file called "Tax Back Up Files"
To keep up with your receipts it's easier to file them by month in your "Tax Backup File"
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.
Use envelops to keep your "hard copy" receipts in after you have posted them. For ease of retrieval I suggest making monthly envelops.
Unless you have a problem with a bill you will probably never have to look at these receipts again.
Getting accustomed to collecting receipts for everything you do will result in higher tax savings.
Did you go get copies that only cost 50, pay cash for them and never post it to your accounting program? If so know that you have just LOST tax dollars. Small amounts do add up over the course of a year!
Regular and consistent record keeping will pay off for you at tax time guaranteed! - 14915
Record keeping does not have to take long. In fact you can keep accurate records in just 5 minutes a day.
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.
The following method will make certain that all your receipts have been posted.
Make a folder on your desktop labeled "Daily Receipts" For anything you purchase online, save a copy of that in your "Daily Receipts" file.
Cash receipts should be put in a folder on your desk.
Every day (morning or night) post the receipt in the 2 files. Doing this daily takes only a couple of minutes.
After posting your receipts for the day file them on your hard drive in a file called "Tax Back Up Files"
To keep up with your receipts it's easier to file them by month in your "Tax Backup File"
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.
Use envelops to keep your "hard copy" receipts in after you have posted them. For ease of retrieval I suggest making monthly envelops.
Unless you have a problem with a bill you will probably never have to look at these receipts again.
Getting accustomed to collecting receipts for everything you do will result in higher tax savings.
Did you go get copies that only cost 50, pay cash for them and never post it to your accounting program? If so know that you have just LOST tax dollars. Small amounts do add up over the course of a year!
Regular and consistent record keeping will pay off for you at tax time guaranteed! - 14915
About the Author:
Karin Russell has owned a small business specializing in income tax preparation for home based businesses for 36 years. Her blog: 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 clients.
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