There is nothing worse than preparing income taxes and finding that there were many deductions we didn’t keep track of. Not keeping track of deductions can be very costly come tax time. It is very important to keep good records all year round.
For every dollar you don’t deduct, you could be paying up to 35% back to the government. If the dollar has been spent, taxes shouldn’t have to be paid on it. Think of the productivity of your business if you could put 35% of your income back into your business rather than in the hands of politicians. What kind of advertising campaign could you start with 35% extra cash flow every month? With a little organization and planning this can be possible.
Most business owners remember to take the big obvious deductions such as cost of goods sold, materials, tools, supplies, and employee expenses. But often times it is the small seemingly insignificant deductions that can make or break a company.
Note: Items such as paper clips, bank charges, credit card charges and home office expense seem small and unimportant at the time, but multiply those little things over a year or two and then multiply it times 35% and it can add up to quite a bit of money.
Along with keeping track of expenses it is important to evaluate your income and expenses on at least a quarterly basis. This allows you to determine if too much is being spent any one place. It allows you to determine if all the deductions that can be are being claimed. It allows you to determine how to better increase sales and decrease costs.
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March 10th, 2014
There is nothing worse than preparing income taxes ...