As a business owner, you understand the importance of filing a separate tax return for your company apart from your personal income taxes. That is why it is important to keep business receipts separate from your personal receipts. Here are tips that can help.
Keep All Receipts
Collect all your business-related receipts and keep them in a secure place. A manilla portfolio, plastic storage bin, or file cabinet drawer will usually suffice. Never assume that any receipt is too trivial to keep. A toll fee of five dollars or less can add up if you make that trip often during the tax year. Parking fees, desk supplies, and office materials should be tracked and added to your file of receipts as possible deductions. Your tax accountant or filing program can clarify anything you’re unsure of.
Use an Organization Strategy
Arrange your receipts in a methodical style. Many business owners use a chronological system that organizes receipts by the day, week, or month depending on how many you have. You might prefer a color-coded system of putting together that distinguishes receipts from clients, vendors, and purchases so that everything is easy to find and include on your tax filing forms.
Set Up A Filing System
A receipt system can be set up as a file in your company’s tax program. You can also set it up separately to select the usable receipts when tax filings are prepared. Keep printed originals of your receipts along with digital receipts or copies of the originals. Without adequate receipt documentation, you may not be able to claim certain deductions. Organize the receipt data on your computer where you can access it readily for corrections and additions. Remember to remove or adjust receipts when you return a product to the place of purchase.
Get Bookkeeping Support
As your business grows, you might want to invest in bookkeeping support to track receipts along with expenditures and other financial data. An online app can be used by anyone in your office who is trained to operate it. You might prefer outsourcing your bookkeeping work to an office that specializes in maintaining and managing business records. You can also hire a bookkeeping employee or part-time assistant to handle the company books. This will help to separate business from personal finances and ensure that receipts and related documents are organized professionally.
Bookkeeping is an essential part of a successful company. Keep track of your receipts, organize the financial transactions, and get the bookkeeping help you need to be ready for tax time.
Anica is a professional content and copywriter who graduated from the University of San Francisco. She loves dogs, the ocean, and anything outdoor-related. You can connect with Anica on Twitter @AnicaOaks.