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Best Ways to Keep Track of Your Tax Expenses

Best Ways to Keep Track of Your Tax Expenses

By on Jan 28, 2016 in Tax Tips | 0 comments

Best Ways to Keep Track of Your Tax Expenses

When operating a small business, there are many responsibilities to manage. In a perfect world, the business owner is the “Jack of all Trades” mastering them all, but honestly, that’s not the way it usually goes. For an entrepreneur, managing multiple tasks is expected, but should one spread him or herself out too thin—and this is usually the case, it is inevitable that some tasks will get neglected, and the first one is typically the bookkeeping.

The Joys of Bookkeeping 

Bookkeeping tasks are generally the first responsibility to fall by the wayside because there’s really no actual deadline to get it done—that is, until the end of the year when your accountant reminds you to prepare your tax forms for filing. So after the holidays, this is usually the time to scramble for receipts and invoices that have been issued for the past 12 months.

It can be said that most of the stress comes from gathering and searching for misplaced documents. This can all be avoided if a designated amount of time is set aside to commit to bookkeeping. It is not necessary to have a degree in accounting to keep organized paperwork. It does not have to be a complicated process either. It is all a matter of keeping track of the amount of money that comes into a business and what goes out. This simple concept not only applies to business bookkeeping, but personal finances too. 

Is Electronic Bookkeeping Easier? 

Filing taxes does not have to be a stressful task if it is managed properly. With the assistance of electronic banking, tracking finances can be easier to manage. However, if this is neglected long enough, it can certainly become a tedious, yet necessary task that can take hours or perhaps even weeks to complete.

Because of the convenience and ease of electronically transferring funds for payments, spending can sometimes get out of control. Meaning most businesses make it easy to buy with just one click. As a result, tracking expenses can easily be shifted aside as a task that can be taken care of later. So even though there’s the paperless option, the concept of tracking expenses can still fall into the procrastination category. 

3 Ways to Track Tax Expenses 

There are ways to track your tax expenses without shutting yourself away from the world for a week during tax time trying to account for every expense. Here is a list:

  1. Keep a folder of all of your receipts. This is the very least that can be done. Keep a tangible and electronic folder. When making online purchases, a receipt is usually sent to an email of your choice. Create a folder in your email account labeled “[Year] Tax Receipts” and file all of your electronic receipts there. For tangible purchases, simply store your receipts in a folder labeled “[Year] Tax Receipts.”
  1. If you want to get a little fancy, create a spreadsheet where you can enter all of your expenses. For example, create headlines like this: 
Date Vendor Item Amount
1-1-2016 Shop Mart Printer $500.00

You can create your table any way you like, but this gives you an idea of how to keep better books.

Speaking of keeping better books, there are more sophisticated versions of bookkeeping programs. Quick Books and Quicken are the most popular, but there are other software programs to consider depending on the amount of expenses you have and what you can afford. 

  1. Another way track tax expenses is to hire a tax relief consultant. These professionals have the knowledge and experience to keep accurate tax records that will help you avoid any issues with the Internal Revenue Service (IRS). 

Success Tax Relief is located in La Porte, Texas, just 30-45 minute drive from Houston. We have over 30 years of tax relief experience specializing in tax preparation and other services. If you are interested in better accounting for your tax expenses, call us today at 1-877-825-1179 or schedule an appointment with us online right now!

 

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