Stay Organized:
-The key is to stay organized throughout the year and perform the proper steps to ensure that you have your information in the correct order to make tax time a breeze.
-Once a week, go through your receipts and document them in your accounting software, spreadsheet, or accounting book.
Avoid Owing a Huge Amount:
-The goal at tax time should be to have as close to $0 in tax liability as possible. The only way to avoid owing an excessive amount on your tax return is with proper tax planning throughout the year.
-The IRS sees your tax liability as their money and wants it paid to them throughout the year and not in one lump sum the following year.
Record Keeping:
-Proper record keeping and documentation of business expenses is absolutely imperative to maximize your deductions and to protect yourself in audit situations.
-For all business-related purchases keep sales receipts and make sure to store them in a safe, dry place.
-Fifty percent of meal and entertainment expenses can be used as a deduction. (Required documentation includes: The date, time, place, purpose of the meeting, whom you entertained, and what relationship you have with that person.)
Track Expenses On Property Owned:
-Eligible deductions include mortgage interest, property taxes, insurance, depreciation, maintenance, and repairs.
-By preparing the correct way and staying organized you will save yourself a lot of stress at tax time, protect yourself in audit situations, and improve your bottom line.
Posted 18th February 2009 by Sally Forster Jones