Make Tax Day Just Another Day and Reap Big Tax Savings!!!!
Smart business owners rely on an accountant or an experienced tax advisor to prepare their tax returns. Why? Because there is no denying that tax laws have become so complicated that you need an expert to help you navigate the Tax Code. But to really save money, it pays to know the basic rules of deductions, record keeping and document retention requirements. Let me remind you that the responsibility for your tax return is on your shoulders.
There are a number of expenses that you might be entitled to deduct. Make sure you take advantage of all that apply to your business. Common deductions include salaries, taxes, licenses, interest on business debt, advertising, rent, utilities, business cards & stationery, and professional fees for legal, accounting and other services. Also deductible are Internet access and e-mail service, postage and bank fees. More complicated deductions include business travel, entertainment, meals, capital assets, depreciation, health insurance, auto expenses and retirement plans. Ask your accountant at the start of your business year which deductions apply to your business and evaluate every December when you are reviewing your numbers for tax planning and savings. Remember, January is too late!!!!
It literally pays to keep good records. The IRS requires that your books show your gross income as well as deductions and credits, so it is imperative that you maintain a detailed and organized record of your business transactions with the required supporting documentation.
Follow these basic record-keeping tips: Deposit all business income in a separate account Avoid writing "cash" checks Carefully record all transactions you make with you business
Now that you have your business records organized, how long do you need to keep these tax records? Six years is the rule for general tax records. Records related to capital expenditures should be kept for six years after the expenditure is fully expensed. Additionally, Federal Tax Returns should be kept permanently.