Avoid The Tax Man :Get Organized
Since most people that are audited because of missing records, not because of dishonesty, the key to avoiding the tax man is to have organized, efficient systems to keep your business income in check.
Here’s a solution for you. Separate all of your documentation by categories. You may want to consider categories for advertising, travel, auto expenses, utilities, rent or mortgage payments, professional fees, etc. Keep all receipts and canceled checks in the appropriate folder.
The burden of proof is on you. What’s more, small businesses are more likely to be audited three times as much as individuals. Their target is often reported business expenses such as your travel expenses and your entertainment expenses. This should not be a problem for you if you have all of your expenses documented in an organized manner.
Stay organized year round and you will see the process is very straightforward and even simple.
This entry was posted on Saturday, December 29th, 2007 at 9:22 pm and is filed under Deductions, tax tips. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.