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Keeping accurate business records is essential if you want to save tax money and have adequate records in case of, heaven forbid, an audit.
5 minutes a day…that’s all it takes to save hundreds, perhaps thousands, of tax dollars and put money in YOUR pocket!
The amount of time it takes to record your expenses if done on a consistent basis is less than 5 minutes a day and is not hard.
Following good habits like those that follow will reward you in more deductions on your income tax and thus more money in your pocket!
Even small transactions should be recorded everyday. If you post to your Accounting Software daily you will find that it takes less than 5 minutes a day.
One way to make sure you have all the receipts “posted” is to use the following method:
Make a folder on your desktop labeled “Daily Receipts” For anything you purchase online, save a copy of that in your “Daily Receipts” file.
Cash receipts should be put in a folder on your desk.
Every day (morning or night) post the receipt in the 2 files. Doing this daily takes only a couple of minutes.
File your online receipts that you have posted in your “Tax Backup Files”
To keep up with your receipts it’s easier to file them by month in your “Tax Backup File”
Putting a backup on a DVD or CD monthly is a good habit to get into. Keep these backups with your year-end tax records.
For your “hard copy” receipts keep monthly envelops to file “posted” receipts in.
Unless you have a problem with a bill you will probably never have to look at these receipts again.
Collecting receipts for everything that you do is a good habit to get into!
By not posting a lot of small receipts you are losing tax dollars. If you go get copies, do you get a receipt even if it’s only 50 cents? If you do not and it is not posted in your accounting software then most definitely you are over paying your taxes. Small amounts add up over the course of the year.
It’s guaranteed regular and consistent record keeping will pay big time at tax time!
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