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Tips To Organize Your Tax Records

Posted by Dairel Denton Posted on Dec 11 2017

 

It’s that time of year again – time to start preparing for your taxes.  Today, we wanted to share some easy tips to help you organize your tax records.  By having organized receipts and records, you can cut down on the stress and time it takes to prepare your return. 

Here’s what you need:

STEP ONE: Have a designated space for your tax records.  By having a specific area in your office you’re your tax receipts and records, then you can avoid the last minute scramble. 

STEP TWO: Organize your files.  Determine what categories will work best for you, but here are some to go off of:

Bank Statements

Taxes Paid

Income

Invoices

Contractors

Advertising

Auto

Depreciation

Donations

Medical

Travel

Utilities

STEP THREE: Gather physical documentation of the above categories and any other categories that fit your business.  Make sure to sort them correctly and on time.  Don’t put off organizing until the end of the year.  Do it as you receive your receipts and invoices. 

STEP FOUR: Keep your previous tax returns for seven years.  You can claim a loss for certain investments for up to 7 years.  Please note, if the IRS suspects fraud there is no limit to how far back they can audit you.

STEP FIVE: Safeguard your information.  If you keep paper records, then you need to place them in a safe, locked and fireproof cabinet.

STEP SIX: Work with an accountant throughout the year to help you maintain your business’ financials.  

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