Make the most of the season by following these simple guidelines
The new tax season is a great reason to make and keep good records. Whether you own a business or an independent contractor. Keeping good records is the most important aspect of filing accurate tax returns. Also, good record keeping can only benefit you in gaining a larger tax refund or minimizing your tax debt. Below are some tips for making and keeping records.
What exactly is a tax deduction?
A tax deduction (or “tax write-off”) is an expense that you can deduct from your taxable income. You take the amount of the expense and subtract that from your taxable income. Essentially, tax write-offs allow you to pay a smaller tax bill. But the expense has to fit the IRS criteria of a tax deduction.
Make a list
Create a list of expenses you spend money on to support your business or gig. Some examples of what you can deduct are below.
- Car expenses and mileage.
- Office expenses, including rent, utilities, etc.
- Office supplies, including computers, software, etc.
- Health insurance premiums.
- Business phone bills.
- Continuing education courses.
- Parking for business-related trips.
Usually, any out-of-pocket expenses for your business is tax deductible.
Check the list regularly
Don’t forget to check in and see how you’re doing with your list. Each time you review the list, think about the last outlay of cash for your business. If it is not on your list, add it.
Reward yourself
When you succeed in achieving a goal, be it a big one or a small one, make sure to pat yourself on the back.
Think positively
Positive thinking is a major factor in success. So instead of mulling over business that didn’t go quite right, remind yourself of the business that did.
