Keep These Receipts For Your Bookkeeper When You Run A Home-Based Business
When you run your own home-based business, it's vitally important to find a reputable bookkeeper who can help you with your finances. While a bookkeeper can certainly be an asset throughout the year, this professional becomes even more valuable around tax time. It can be challenging for the average entrepreneur to file his or her own income tax and end up paying as little in tax as possible. With proper bookkeping, you'll be able to write off a wide range of expenses that can help to lower your net income. Throughout the year, you should endeavor to meticulously keep receipts for anything that goes toward the running of your business. Here are some suggestions.
If your business dealings include inviting clients into your home to meet or consult with them, keep track of any expenses that you incur through this process. For example, if you're a wedding photographer, you might have prospective customers visit to look at your portfolio and talk about your services. If you buy a set of chairs that customers can sit on in your home office, keep these receipts. If you buy a wall-mounted TV on which to display your digital portfolio, keep this receipt, too. Likewise, save the receipts from any refreshments that you buy to serve at these meetings.
Entrepreneurs who travel for work should be mindful of keeping their receipts, as their bookkeeper can customarily use this paperwork to the entrepreneur's advantage at tax time. When you travel, expenses such as the gas for your vehicle, your hotel bill, and even your food should all be documented by your bookkeeper as write-offs. Even smaller expenses that might initially seem insignificant, such as a morning coffee from a rest stop or a small fare for driving on a toll highway, can all add up.
A key advantage of working at home is that you can compile several utilities receipts and give them to your bookkeeper prior to tax time. The bookkeeper will make a variety of calculations that will allow him or her to write off a percentage of these receipts for you. For example, the bookkeeper and you can figure out what percentage of your home's area is filled by your home office, and then write off that percentage of your household electric bill. The premise for this write-off is that you're using this percentage of the utilities to operate your home-based business.