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6 Records needed for Business Income Tax sanity

6 Records needed for Business Income Tax sanity

Are Your  US  Business Tax Records

Up to date?

Many Home Based Business enthusiasts forget

the importance of accurate Business Tax Records

 

The following 6 Steps to setting up Business Tax Records should be followed by all entrepreneurs, especially the Home based Business person

 

Is the accumulation and separation of your Business Income Tax Records a pleasant experience?

If not, here is a list of 6 important “boxes” to keep your records and a FREE reference on HOW TO be eligible for more deductions than most consider, and highly recommended, affordable, record keeping software, designed for the Home Based Business person.

Following are the 6 Business Tax Records everyone should keep current, followed by a few that would be needed if you took full advantage of all of the possibles avenues of Business Income Tax Deductions:

  1. Gross receipts. These reflect your business’ income, on which its taxes are based. Save documents that show the amounts and the sources of the income. Those run the gamut from cash register tapes to receipt books. Also with some NEW 2010 Tax Law changes remember to keep accurate record of your GROSS income from Paypal and other payment processors. It will be incumbent to keep track of ALL sources of Income. Paypal wil be reporting to IRS all transactions exceeding 2,000 per year and/or $20,000
  2. Purchases. These are the things you buy and resell to customers. They include raw materials or components that are included in finished products. Such purchases may be considered part of the cost of goods sold, and be eligible for a tax deduction. Also remember to audit your Paypal and other processor accounts.
  3. Expenses. Expenses are the costs of running a business, from salaries to rent to travel, and most are tax deductible. In addition to records such as canceled checks and account statements, use petty cash slips or a petty cash log to record your small purchases. The software mentioned below is extremely helpful here.
  4. Employment records. It’s important to keep complete records of the wages, benefits and tips paid to your employees, including amounts and dates. Keep the names, addresses and Social Security numbers of your employees, and their dates of employment. Have employee copies of W-2 Forms been returned to you as undeliverable? Keep em. And keep copies of employees’ income tax withholding allowance certificates (Forms W-4, W-4P, W-4S, and W-4V). Many in home based businesses do not have employees but may utilize outsourcing which will require 1099 Misc. forms up to date.
  5. Business assets. Business assets such as computers and copy machines gradually wear out, and businesses can write off their costs over time. Be sure to keep records of the cost of the asset and the sales tax, as well as costs for delivery, setup, training and accessories. When assets are sold, record and keep a description of the item, the price and date of sale, and any expenses pertaining to the sale—such as brokerage fees or advertising costs. Too many also forget to keep track of their Business Assets and effectively use the depreciation schedules.
  6. Travel. Much of the cost of business travel is tax deductible, so keep records each time you make a payment—large or small—that involves a trip. Receipts for transportation, meals and lodging are a must. You should also keep a journal listing travel dates and destinations, the reasons for the travel .and a list of expenditure.

Automobile expenses (mileage or actual) need to be recorded. The Us Internal revenue Service accepts record for 90 continuous days or a complete week each month. Be sure to write down leaving your home office , reason for trip and return mileage

Grab this simple form and duplicate:

PDF File2011 Mileage Form

Here comes the big advertisement:
I have been using this simple software for the past 5 years along with the advice gained from the FREE PDF listed below. This procedure has saved many hours and 10’s of thousands in Tax Dollars. Even if you have completed your 2011 Tax forms, you may want to read and see if it would be advantageous to re-file. Regardless I encourage everyone in the US who is involved in small business to get the Software and start today recording your activity.

 

Warning: If you do chose to purchase my Income will increase slightly. Yes, this is an affiliate product!

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PDF File

Also Download your Tax Saving FREE  PDF here


 


8 Responses to “6 Records needed for Business Income Tax sanity”

  1. Chuck Bartok says:

    Thank you for the comment. Look forward to hearing form you again. What area of consultation doe you focus

  2. Konsultan Pajak says:

    I always update on this blog and give updates selelu knowledge very helpful. thank you, I hope you reply to this comment.

  3. Chuck says:

    Where are located Brij?
    If in the USA, are you recorded the items to be eligible?

  4. Brij Taneja says:

    I am glad to read this blog because I will be educated about my tax.

  5. Chuck says:

    Thanks Billy for the endorsement. This Tax Helper software can literally save any Home based business person hours of frustration at year end and quarterly.
    And all one has to do is allocate an hour or less per week in most instances

  6. Billy Emmons says:

    Chuck, very good advice on having good record keeping. I am glad that you are recommending MLM Tax Helper. I have been using for several years and it is a great systematic record keeping system that I highly recommend.

    Thanks
    Billy Emmons

  7. Chuck says:

    Thank you for your comment, Sandra. In my five decades of consulting one area that has been a downfall for most entrepreneurs is Cash Flow and tax management.

    I would recommend all business person to look at your concise report found in the Product section of your website.

    Create Business Success

  8. This is good advice. In addition to keeping the paper (or scanned) backup receipts, I would only add that keeping your ethics in on what you claim as deductions is going to be more important than ever. The government is hungry for cash, and the IRS are their hunting dogs. For the 16+ years that I did accounting and tax preparation, I kept my clients out of the gun sights of the IRS using those two things: keep the paper trail and keep your ethics in. I am happy to say not one of my clients was ever audited.

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