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Bookkeeping Tips
Below are a few tips to remember when performing
bookkeeping. Our bookkeeping services are top-of-the-line
and will maintain all of your financial transactions.
A few good bookkeeping practices are:
- Keep all receipts. Make copies of thermal receipts that fade over time. Remember to enter all cash receipts. File receipts according to expense category. Keep a separate file for each credit card and each asset.
- Make sure all bank accounts and credit card accounts are business only. Do not mix personal expenses with business.
- Meals are generally 50% deductible. Make sure you document who you ate with and what business you discussed. The only time meals are 100% deductible is if you ask an employee to work through a meal occasionally, coffee and water at the workplace, an occasional cocktail party or picnic or a holiday gift of food, not cash.
- Verify you entered all the expenses on your business credit card by reconciling the account monthly.
- Print out a detailed Profit and Loss Statement. Look over the deposits and expenses to verify that they are in the correct category.
- The IRS has strict rules needed to substantiate expenses on the following categories: home office, business gifts, car & truck, travel, meals and entertainment
- Business gifts are limited to $25 per person per year. If you or your spouse both give gifts, you are jointly limited to $25. It does not matter whether you have separate businesses or an independent connection with the recipient. Small gifts of $4 or less are not included in the $25 limit. They can be imprinted items like pens or desk sets. There is no limit if the gift is given to a corporation.
- Federal tax payments are not a deductible expense!
- Remember, tax laws change annually and they can be complex. Always consult your CPA or Enrolled Agent for assistance, strategies and recommendations for your individual situation.
- Do not wait until the end of the year to enter all the income and expenses for your business. If you do a little each month, tax season will not be stressful for you.
- Keep a log book in each vehicle to record business miles. Document date, beginning and ending odometer and the purpose of the trip.
- Receipts are required for all expenses over $75.
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