Site Navigation6 Bookkeeping Tips For Starting Your Own Business
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Many people think that owning their own business is a simple thing. Nothing can be further from the truth but their are fewer more rewarding experiences though. Record keeping is a very necessary thing to get right at the very beginning. Here are 6 suggestions to help you start right.
1. Keep Receipts For All Transactions Starting On The First Day. If you pay for everything with a check, debit card, or credit card this may not seem necessary. As a tax accountant I can assure you that it is. The IRS will disallow deductions if you do not have receipts to accompany your bank and credit card records.
2. No more cash. Resolve that you will not use cash to make business purchases. Cash is difficult to account for and difficult to document. When you pay for something with cash you can get a receipt but how do you prove that it was you who actually made the purchase?
3. Report All Your Income. Many self employed individuals think that withholding income from the IRS is a smart thing to do. This is illegal and can get you into a lot of hot water down the road. Avoid doing things in business that can cause you problems in the future.
4. I Recommend QuickBooks. There are many accounting software out there to use and a lot of them are not that useful. Most accountants are familiar with quickbooks which will make your year end tax preparation much easier. Consider taking a quickbooks class so that your tax return preparation fees will be lower.
5. Report Employee Earnings Timely. There are several services on the market that will be glad to do your Payroll Reports and process your employee checks. Shop around and get the best deal. This market has become more competitive which means there are some good deals out there for you.
6. When Ever Possible Use A Business Credit Card. There are many enticing offers by credit card companies try to get you to use their particular card. If done correctly this can also become a small income stream when viewing cash rewards and frequent flier miles. One of the biggest benefits though, is the end of year reports you receive with your expenses categorized for your accountant.
These suggestions are just the beginning and you would be wise to seek the help of a qualified tax accountant as soon as you can. Often times you can get an initial consultation to get many of your questions answered. Talk to a few different ones and try to find one you has experience with your particular business.
About the Author:
Zach Allred is a tax preparer with 20 years experience. Click Small Business Taxes and subscribe to his complimentary monthly tax newsletter. Also click on Home Business to read other complimentary articles.
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