Tax Guides

The following pages are a short version of the minimum information you need to know before you have your taxes done. I am not going to tell you how to do them yourself; if you have a business, you should be having them prepared professionally. But a little preparation on your part will save you some time and money.

I strongly recommend that new landlords or business owners take a class in basic bookkeeping. If you've already had that, the rest is easy. But, if your business is small, with no employees, you can take some shortcuts. Just make sure you keep good records of money spent and received. Remember, you can't take the tax deduction if you don't have the receipt.

You will probably want to invest in some basic software. For a very small business, a basic checkbook-balancing program (like Quicken, or Money) will probably be fine. Most of these programs will let you categorize your expenses at the same time, which is what we need here.

At the very least, you can sort your receipts by category (i.e., postage, office supplies, rent), and put each category in a separate labeled envelope. Put the totals on the outside of the envelope.

In between, there are lots of books and "bookkeeping systems" you can buy at any office supply store. The important thing here is that, whatever system you use, you use it consistently. And a too-elaborate system probably won't get used after the first week.

The first concept you need to understand at this point is that not all the money you spend is going to be a write-off. If you buy a building, or a piece of equipment that will last several years, you will not be able to claim the entire expense this year. It will have to be depreciated over several years. In order for this to be done correctly, you'll need to provide a description of the item and the date and cost of the item. So, whatever system you use, these items will have to be listed separately.

Certain other expenses must also be treated separately. Mileage expenses should be kept in a diary with odometer readings, date and business purpose for each trip. Office-in-home also requires additional information.

Please call me and set up an appointment to discuss your particular situation.