Posts Tagged ‘Accounting’

It’s Show Time!!!

September 28, 2013

October 15If you filed an extension on April 15 to put off the filing of your 2012 Form 1040, just a little reminder.  The clock is ticking down to get your records together and prepare your tax return.  If you use a tax professional, do them a favor – don’t put it off until October 14.

But getting your tax records to your tax professional sooner rather than later is a great advantage for you.  This gives some time to actually go over the return and see if there is anything that can be done to reduce your tax bill or increase your refund.  The longer you put it off, the less time there is for strategy.

Actually you should be planning NOW for your 2013 tax return.  MyTaxBuddy.com has a subscriber that used our service to input all her 2012 tax records at one time.  She told us that it felt so good to have 2012 done that she decided to input all her 2013 records and is now staying current.  And she is enjoying the peace of mind in NOT having to think about being stressed out next year. We love happy subscribers.

If you dread the time when you have to battle your avalanche of receipts , do yourself a favor and start getting your tax records together now.  You can let go of the year-long dread that you carry around and, once you file your return, have the comfort of knowing that, when the IRS does call, your records are ready.    Wouldn’t that be a welcome change?

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An Expense By Any Other Name

September 11, 2013

RoseA tax deduction is a tax deduction is a tax deduction.

People ask me all the time “What should I call this expense or that?” If you can show that there is a business purpose, it doesn’t matter to the IRS what you call it.  What is important is what it means to you in managing your business.

If you purchase an inkjet cartridge to print off brochures, you could call it computer supplies, advertising, office supplies, printing or anything else that has a meaning for you.

I once had a client bring in her list of expenses and saw a category called ESP.  When I asked her what that was, she told me Error Some Place.  Since it took place in her business account, we took the deduction (of course we called it something else).  And at the same time don’t use a label that will call attention to the deduction either.

The important thing is to keep your records and receipts so that when the IRS asks, you can easily support your deductions.

Good Records – Timeless Advice

September 3, 2013

Luca Pacioli Luca Pacioli*, the father of modern accounting,  wrote:

“If you are not a good bookkeeper in your business, you will go on groping like a blind man and may meet great losses.”

Not only that, but you are dead meat in front of an IRS Auditor.

You don’t need to be an accountant, bookkeeper or tax expert to have good documentation.  The best records system for you is the one you will actually use.

If you have been telling yourself, “One day I will start keeping better records” and then you put it off (yet again), we invite you to visit http://www.MyTaxBuddy.com for a simple and yet flexible system.

Good tax records can support your tax deductions which could gift you with hundreds or thousands in tax savings.

Make today the day you stop your worry and begin gaining deductions.

Listen to Father Luca.

*Luca Pacioli – a 15th century monk, Father of modern accounting and Leonardo DaVinci’s mathematics teacher.  The above quote is from In The Rules of Double-Entry Bookkeeping ( Particularis de Computis et scripturis).

An Ounce of Prevention

August 3, 2013

Ounce of Prevention

I was at an IRS Appeals hearing the other day and the Appeals Officer made an interesting comment to me.   He said “You know, we disallow more deductions because the person could not provide substantiation for the deduction than we do because they could not establish a business purpose.”

That got me to thinking that most people spend more time and energy wondering what they can deduct instead of documenting what expenses they do have.

We understand that you may not know all the things you can deduct.  The tax law is complicated and it changes every day.  Even a “Tax Expert” learns new things as the law changes or is reinterpreted.

So if you are unsure as to whether or not you can deduct something, go ahead and keep the receipt and record it.  If you later find out that you could have deducted that expense, then you may not be able to because you don’t have the records.

On the other hand, if you find out later that you cannot deduct that expense, there is not harm done.   Just remove the receipt or reclassify the expense as a personal expense.

As Ben Franklin once said  “An ounce of prevention is worth a pound of cure.”

 

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