O.K. so I know – I usually share a recipe on Wednesdays but today, instead, I’m going to share some tax advice! Like many of you, bookkeeping and taxes are two of my LEAST favorite things in the world but a necessity with a homebased business.
Recipes are much more fun I know, but yesterday I participated in a conference call sponsored by the Barefoot Executive featuring Deduction Diva, Vicki Collins. Vicki is a CPA that specializes in working with homebased business, especially direct sales. Be sure and check out her website.
On the call Vicki shared her Tax To Do List for 2008. She had a lot of good ideas and tips. Here’s her list –
1. If you have inventory and didn’t do a count on December 31st – do it now!
2. Get an official odometer reading. If you are ever audited, IRS may ask to see proof of your odometer reading at the beginning and end of the year. If you haven’t had any repair work or oil changes in the past month, you will need to find a way to get a reading. If you don’t need any work done, you can always go to an oil change/repair workshop and request an estimate. They should put the odometer reading on the estimate.
3. Finish up 2007 filing and bookkeeping.
4. Review and complete your 2007 mileage log. It will never be easier to finish than right now. If you haven’t started your 2007 log, it’s o.k. – you can still do it now. Just look at your planner and receipts and use those to calculate your miles. 2007’s mileage rate is 48.5 cents per mile.
5. Set up your 2008 files. Think about your categories of expenses. By getting your files together now, it will be much easier to file your receipts throughout the year.
6. If you don’t have a separate checking account and credit card for your business, go ahead and establish them now. It’s always easier to do your record-keeping when you don’t have to go through and separate out personal and business expenses.
7. Make or review your business plan. This is great documentation of your intent to make a profit. It also helps you stay on track during the year.
8. Make appointments with yourself either weekly or monthly to do your bookkeeping. It is so much easier to do your paperwork and bookkeeping regularly. You’ll also be less likely to forget to include income and expenses.
9. If you pay estimated tax, your final estimate for 2007 is due January 15th (yesterday!)
10. Vow to learn as much as you can to help yourself keep more money in your pocket through legal tax deductions and strategies.
Note from Leigh Anne: I learned the hard way the importance of keeping on top of your bookkeeping. After a couple of years of neglecting it and having to spend hours and hours going through receipts, paperwork, tearing my hair out, etc. to get it ready for taxes I now schedule 30 minutes the first of each month to take care of things – it is so much easier!!
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