IRS is like a silent business partner.
They usually accept your annual tax return as a legal record of how much you owe them!However, like any good business partner, they may have a few questions.
And when your silent business partner ask questions, you may find your self needing a reliable and solid defense system.
One such system cost about $12.
00 and can be found at your local office supply store.
If you are just starting a small business and you don't have a clue, or the time, to learn bookkeeping software programs - invest in an accordion file.
Train yourself to put ALL of your receipts, invoices and bills into your accordion file each day.
In the beginning, don't worry about sorting out the receipts; just separate the receipts by months.
One way to make sure you develop the habit of stashing ALL of your business receipts into your accordion files, is to look at each receipt as if it were money.
Because the more business receipts you have, the more money you will save on your taxes.
You can concern yourself with sufficient bookkeeping systems once you get your business up and running.
In the mean time, your trusted accordion file is your best defense against any tax agency, state or federal.
Just be sure that the deductions that you or your tax professional reports on your tax return, equals the receipts you have in your files.
Depreciation and Business Use of the Home and other such deductions can add to your overall total of tax deductions.
Regardless of when you hire a part-time bookkeeper, you will need to keep all your accordion file records for 3 years.
This is because the statute of limitations for tax audits and assessments is three years.
For items that you purchased and continue to own and use for business, keep these records for the life of the item.
Examples:computers, printer, office equipment, office furniture, etc.
Depreciation is the annual deduction that enables you to recover the cost of business equipment or income-producing real estate.
More about depreciation in another article.
For now, just remember to keep ALL your receipts in your accordion file.
Your tax professional will help you sort out what is and is not deductible.
They usually accept your annual tax return as a legal record of how much you owe them!However, like any good business partner, they may have a few questions.
And when your silent business partner ask questions, you may find your self needing a reliable and solid defense system.
One such system cost about $12.
00 and can be found at your local office supply store.
If you are just starting a small business and you don't have a clue, or the time, to learn bookkeeping software programs - invest in an accordion file.
Train yourself to put ALL of your receipts, invoices and bills into your accordion file each day.
In the beginning, don't worry about sorting out the receipts; just separate the receipts by months.
One way to make sure you develop the habit of stashing ALL of your business receipts into your accordion files, is to look at each receipt as if it were money.
Because the more business receipts you have, the more money you will save on your taxes.
You can concern yourself with sufficient bookkeeping systems once you get your business up and running.
In the mean time, your trusted accordion file is your best defense against any tax agency, state or federal.
Just be sure that the deductions that you or your tax professional reports on your tax return, equals the receipts you have in your files.
Depreciation and Business Use of the Home and other such deductions can add to your overall total of tax deductions.
Regardless of when you hire a part-time bookkeeper, you will need to keep all your accordion file records for 3 years.
This is because the statute of limitations for tax audits and assessments is three years.
For items that you purchased and continue to own and use for business, keep these records for the life of the item.
Examples:computers, printer, office equipment, office furniture, etc.
Depreciation is the annual deduction that enables you to recover the cost of business equipment or income-producing real estate.
More about depreciation in another article.
For now, just remember to keep ALL your receipts in your accordion file.
Your tax professional will help you sort out what is and is not deductible.
Source...