4 Ways to Make Sure You Don't Miss Any Tax Deductions
Do you know what the difference between a business and personal receipt is? If not, then this article will be of great help to you. Business-related expenses are tax deductible, so it's important that you keep your receipts for 12 months after the year in which they were incurred. This way, if any questions come up about deductions on your taxes at the end of the year, you'll have all the evidence necessary to prove your case. For example, say an audit comes back saying that $500 was deducted but never shown as an expense on your records--you can show them where it says "business related" and provide a copy of your receipt! In addition to keeping all receipts for a full year from when they were incurred, there are a few ways you can make sure that you don't miss any deductions:
Keep 'em Seperated
Keep receipts in a separate place from your other clutter (such as on top of the fridge, by the computer, etc.) and in an envelope labeled "taxes" or something similar. This way, you'll make sure that your business receipts are never lost in the shuffle!
Keep All Copies
When you receive a receipt for an expense, whether it's an email or actual paper copy, do not throw it away. Otherwise you will have no record of what happened to that money. Keeping all receipts can help avoid unpleasant surprises at the end of the year when you are forced to pay more taxes then expected.
Use Software
If possible, try keeping track of expenses throughout the year on computer software programs designed specifically for keeping track of business expenses (for example Quickbooks, or Workbench Accounting). This allows you to keep records while making things easier on yourself later on if an audit comes up.
Get Into a Routine
Make it a habit to go through all of your expenses throughout the year, entering them into an Excel spreadsheet or even just writing them down onto notecards. This will help you keep track of everything and know if anything is missing come tax time!
Plan for the Future
Write out your anticipated business expenditures for the next year each month so that when tax time comes around again, all you have to do is check to see if they were correct or need adjustments made. Having everything in an Excel spreadsheet will make this process easy and painless.
When it comes to saving money, there are a lot of ways to go about doing so. But have you ever considered deducting your business expenses from next year's taxable income? It may be a good idea for you to get organized today if these deductions will save you hundreds or even thousands at tax time next year!