The 3 Rules of Taxes Posted by SUp.biz, CEO on October 20, 2008 at 6:00pm

Need tax help? Follow these three simple rules to take the worry out of taxes!

Rule #1: Keep Business and Personal Separate

Make sure to set up a business bank account, have business credit cards, and keep your personal transactions separate. Mixing the two will make taxes more difficult, and potentially invalidate the liability protection of an entity (like an LLC or corporation) that you’ve formed to protect your personal assets.




Rule #2: Keep Good Records

Keep receipts, especially for big items, in a separate file for your business receipts. Once a month, download your statements from your bank account and credit cards and organize them in an excel spreadsheet. Even easier, purchase software to do this automatically. Here are some suggested categories:

Accountant & Attorney Fees
Acquire, Register, Defend TM or Trade Name
Advertising
Business Gifts
Charitable Contributions
Contract Labor (Form 1099-MISC)
Educational Materials
Furniture
Insurance
Licenses & Registration Fees
Materials, Supplies, Books, Prof Instruments, Equipment (used during the year)
Meals & Entertainment
Merchant Account & Banking fees
Office expense (anything other than routine supplies)
Office Supplies & Postage
Other Interest
Parking Fees & Tolls
Professional Accreditations/Dues
Property Tax
Recruiting
Rent or Lease Other Business Property
Rented or Leased Vehicles, Machinery or Equip
Repairs & Maintenance
Research & Experimentation
Restore or Replace Property
Social Security & Medicare Employee Taxes
State & Local Sales Taxes (imposed on you as seller)
Telephone & Business Voicemail & Fax & Cable
Travel: Incidentals (tips, fees to maids, porters, etc.)
Travel: Lodging & Transportation (with overnight travel)
Utilities (gas, electricity, water)

Rule #3: Contact a Small Business Accountant

Get recommendations for an accountant with reasonable prices who specializes in small business. Contact him/her after the tax season rush, but well before the end of the calendar year to establish your relationship and ask for tax tips to make his tax preparation easier (and save on your costs).

Remember, organization and preparation lead to savings, both with what your accountant can expense and capitalize on your tax return, and in what you pay your accountant for his time preparing your taxes!

TurboTax - If you are looking for a software to help you with your taxes and not an actual individual, then this is the one to go with. It is very affordable and allows you to quickly sort your taxes and identify ways to save and get a refund.