Storing Receipts and Backup Documents for Tax Deductions

One of the biggest benefits to hiring a small business bookkeeper is that you can maximize your tax write-offs more effectively. A bookkeeper will assist with financial tracking and organization every month, making it easy for you to itemize deductions when it comes time to do your taxes every year.

Many business owners know that they should be saving receipts, but they aren’t always consistent with holding onto the documentation that is needed. If you are claiming deductions, then you need to have the documents to back up the deductions, so it is important that you put a system in place to hold onto those receipts.

Why Receipts and Documentation are Needed

Even if your bookkeeper is helping with the digital tracking of your expenses, you need to have the paperwork to show the details of each transaction if the IRS conducted an audit. If the IRS decides to audit your company and they find deductions without back up documentation, then it is possible that they might deny the deductions which means that you will assess additional taxes.

Maximizing Your Write-Offs

Whether you have a home-based business or an office location, you might be surprised to learn about purchases that can qualify as tax deductions. In fact, some of your regular bills and everyday purchases should be considered, and your bookkeeper can help you to sort through the transactions.

For example, consider utility bills, automobile expenses, or space in your home that is used for business purposes. Every receipt needs to be saved if it is related to your business, and you can keep these receipts filed in case they are needed for the future.

A Bookkeeper and a Good System are the Best Approach

Hiring a small business bookkeeper will smooth out the process of tracking your expenses, and your bookkeeper can also assist with the organization that you need to put in place. With a little bit of conscious effort each day, it isn’t hard to keep track of your receipts.

If you incur a business related expense, take a moment to write on the receipt the purpose for the purchase. Then, have a file or box where the receipt can be stored when you get back to your office. These tasks are simple and easy to forget, but they are important if you want to validate your tax deductions.

Are you interested in improving your financial system and tracking your tax deductions? Contact us at Easier Bookkeeping and we will help you see the benefits of outsourced bookkeeping: (888) 620-0770

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