3 Tips For Keeping Proper Tax Records For Your Home Business – And Keeping The IRS Happy!

Posted by on Sep 4, 2008 in Blog | 0 comments The last thing most people think about when starting a business 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 receipt! Not only will this make record keeping a lot simpler, but if you are ever audited (having your tax return reviewed in detail by the IRS), you can prove your expenses, and save yourself money. 2. Write down all your expenses and income as they happen. As your business grows, you’ll have more and more activities to keep you busy. The last thing you’ll want to do each April 15 is to organize your records for the year. So, it’s a good idea to write down all your financial activities as they happen. You’ll find preparing your taxes will take much less time if you are organized. 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 value 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 money. 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...
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A CPA For Taxes-Does It Make A Difference?

Posted by on Aug 5, 2008 in Blog | 0 comments If you’re not sure whether you have a simple tax return you can do yourself or you wonder about missing significant tax advantages or are concerned that you might be making mistakes, use the checklist below from the American Institute of Certified Public Accountants to help you decide whether you should hire a certified public accountant to help you prepare your tax return. You may want to consult with a CPA if you: • Bought or sold a home. You’ll want to take all allowable deductions and make certain you qualify for the personal residence exclusion. • Got married, divorced or your spouse died. Only a competent tax professional can guide you through the complex tax rules that pertain to assets passing through estates. › Had a baby or adopted a child. A CPA can explain in plain English the sometimes dumbfounding array of investment options for saving for a child’s college education, as well as details about the child credit, child care credit and earned income credit. • Have a retirement plan, such as an IRA, 401(k), Keogh plan, a pension or an annuity. • Recently bought or started a business, own a business or work from home. A CPA can advise you on whether you should operate as a corporation, partnership or sole proprietorship. • Acquired rental property or have rental income. A CPA understands the complex tax rules that apply. • Have needs for estate planning and need to understand all the ramifications of property taxes. Like your doctor, your tax preparer knows a lot about your personal situation, so continuity of service is also an important factor. That’s why, for many individuals, choosing a CPA is the right choice. CPAs are college-educated, licensed professionals certified by the states in which they practice. They have passed a rigorous licensing exam and are required to adhere to strict ethics standards, as well as to stay current with evolving tax laws and regulations. They are not part-timers who took a crash course in a few basic tax rules, operating out of a storefront. Finally, if a dispute arises about your tax return, only CPAs, attorneys or enrolled agents are authorized to represent you before the...
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