Many people in business have to do a considerable amount of travel and often the tax authorities will question travel expenses. This appears to be a common area for entrepreneurs and professionals to "cook the books", so the IRS often looks at it very closely. Fortunately, we seem to be well prepared.
It also appears that often small business owners do not maintain adequate records and details. If this is true, that is astonishing, because keeping good financial records is essential. For review,
here are a few items to double-check to be sure you're doing it right:
1. Have a separate bank account, credit card and accounting system for your business and NEVER mix personal expenses with your business. Never buy a business computer and a vacation trip with the same credit card. Never deposit a business payment to your personal checking account. These steps cost very little and could save you heartache and money down the road.
2. Keep every business receipt. You may not always list it in the right account, and your Accountant or the tax folks might quibble about whether it's a business expense, but with a receipt
you have hope. Without it, you got nothing!
3. Never, ever, cheat or cut corners. It just isn't worth it. Over the years there have been unbelievable stories of professional and business owners who should clearly know better, thinking they could either hide income or use a business expense for personal gain. Statistically, you might get away with it, but at what cost?
4. Hire and use a great Accountant! It may cost you a lot to retain the services of quality legal and accounting advice. However, in the long run you give yourself the best chance for making things easy. By following expert advice and doing it right, you will minimize the stress. What a bargain!
It's very easy to go into business, and running a business is easy if you have great systems to track your finances automatically, effortlessly, and accurately. Those systems don't "cost", they
truly pay off in wonderful ways. Follow the basics. There will likely come a day when you'll be delighted you did!
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