Tracking taxes is nightmare and a costly business necessity. Truly business owners are constantly seeking of ways to get ahead of their game without being harassed by such legalities. Preparation and knowledge is key. Here are a few recommended tips.
Have a recordkeeping system
Poor recordkeeping habits end up with fines and penalties. Tax troubles come to those small businesses with poor compliance. Solve this by investing on a computer with reliable recordkeeping software. Search the web for such programs or maybe ask a competent accountant for a few recommendations.
Keep all receipts. Separate expense documents by category
Get the habit of keeping all your receipts. A simple envelope inserted in your planner will work as long as you place your receipts there every time. Also purchase a couple of folders for other expenditure documents. Have a separate folder for your auto expense from your utility expense for example. Invest on a good filing cabinet where all of your documents can be found.
Consult a tax professional
Asking for help from a professional is one the best steps you could do to minimize your tax expenses. Allow their knowledge and experience to work for you and not against you. Ask relatives and friends for tips and recommendations regarding the right tax professional to consult with. You could write it off as tax deductible anyway.
Know what tax deductible expenses are
Tax deductibles are expenses that allow your business to earn from that expense. A good example is gas. When gas is used to meet a client to sell encyclopedias, this is a tax deductible expense. However if gas is used for a family picnic instead for business purposes, this expense is a nondeductible tax. So what are examples of tax deductible expenses?
Education expenses
Audio and video tapes related for business professional development are educational expenses and are tax deductible. Attending seminars and purchase of business related materials like books and magazines are also included in this category.
Charitable contributions
If you got old office furniture and you decided to give it away to a non profit organization or maybe a church can be considered a tax benefit and also an act of goodwill.
Advertising expenses
Expenses from business cards, brochures and flyers including newspaper ads are all advertising expenses and are considered tax deducts. The important thing to remember as we breeze along samples of other tax deducts aside from these is that these expenditures should be used in business trade and not for personal use. A home telephone for example can’t be justified as a business expense since it’s under the use and name of the entire house and not for your business.
Business supplies
Stuff like office supplies like white paper, paperclips, pencils, ink as well as rent and electricity can all be deducted from your business’s total income and are considered tax deducts.
Entertaining expense
50% of all expenses made for clients are deductible. It used to be 100% but hey laws change. A ball game, dinner in an expensive restaurant and a concert are just a few possible tax deduct expenditures.
Auto expense and travel expense
For auto expense, make sure you keep a recorded log of how much gas you used and the mileage traveled of the auto for business reasons. You can also include car repair and depreciation. On the other hand, cost of air fare is a travel expense along with other expenses related to it like lodging, shipping, and telephone calls.
by Marius Preda
Have a recordkeeping system
Poor recordkeeping habits end up with fines and penalties. Tax troubles come to those small businesses with poor compliance. Solve this by investing on a computer with reliable recordkeeping software. Search the web for such programs or maybe ask a competent accountant for a few recommendations.
Keep all receipts. Separate expense documents by category
Get the habit of keeping all your receipts. A simple envelope inserted in your planner will work as long as you place your receipts there every time. Also purchase a couple of folders for other expenditure documents. Have a separate folder for your auto expense from your utility expense for example. Invest on a good filing cabinet where all of your documents can be found.
Consult a tax professional
Asking for help from a professional is one the best steps you could do to minimize your tax expenses. Allow their knowledge and experience to work for you and not against you. Ask relatives and friends for tips and recommendations regarding the right tax professional to consult with. You could write it off as tax deductible anyway.
Know what tax deductible expenses are
Tax deductibles are expenses that allow your business to earn from that expense. A good example is gas. When gas is used to meet a client to sell encyclopedias, this is a tax deductible expense. However if gas is used for a family picnic instead for business purposes, this expense is a nondeductible tax. So what are examples of tax deductible expenses?
Education expenses
Audio and video tapes related for business professional development are educational expenses and are tax deductible. Attending seminars and purchase of business related materials like books and magazines are also included in this category.
Charitable contributions
If you got old office furniture and you decided to give it away to a non profit organization or maybe a church can be considered a tax benefit and also an act of goodwill.
Advertising expenses
Expenses from business cards, brochures and flyers including newspaper ads are all advertising expenses and are considered tax deducts. The important thing to remember as we breeze along samples of other tax deducts aside from these is that these expenditures should be used in business trade and not for personal use. A home telephone for example can’t be justified as a business expense since it’s under the use and name of the entire house and not for your business.
Business supplies
Stuff like office supplies like white paper, paperclips, pencils, ink as well as rent and electricity can all be deducted from your business’s total income and are considered tax deducts.
Entertaining expense
50% of all expenses made for clients are deductible. It used to be 100% but hey laws change. A ball game, dinner in an expensive restaurant and a concert are just a few possible tax deduct expenditures.
Auto expense and travel expense
For auto expense, make sure you keep a recorded log of how much gas you used and the mileage traveled of the auto for business reasons. You can also include car repair and depreciation. On the other hand, cost of air fare is a travel expense along with other expenses related to it like lodging, shipping, and telephone calls.
by Marius Preda
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