There are so many deductions you can take off your taxes, but this becomes a tedious task when you have receipts lying all over your home or no proof at all that you made a purchase that is tax deductible. The following tips are meant to make tax deductions easier.
Tips to Make Tax Deductions Easier #1: Keep ALL Receipts
Of course you can deduct the office supplies you bought for your business, but you must have proof that you bought them. Tax deductions require proof of purchase. To make tax deductions easier, keep up with all the receipts for items you purchased for your business and other items that can be deducted.
Tips to Make Tax Deductions Easier #2: Write the Date and Check Number on the Bill Statement
When you write a check for a bill that can be deducted from your taxes, but sure to write down the check number and date on your copy of the bill. This really will make your tax deductions easier because it makes it easier to find that information on your bank statement.
Tips to Make Tax Deductions Easier #3: Highlight Bank Statements
When you get your bank statement, highlight any information that can be deducted from your taxes. For example, highlight any checks that were used to pay for tax deductible items. This is just one more step that will make your tax deductions easier.
Tips to Make Tax Deductions Easier #4: Use Duplicate Checks
When it comes to tax deductions it’s better to have too much information than not enough. Having duplicate checks is just one more way to ensure that you get your tax deduction. Sometimes, your bank statement will have copies of your checks on your statement, but not always, so you may want to invest in some duplicate checks.
Tips to Make Tax Deductions Easier #5: Keep Business Purchases Separate from Personal
When you go to the store and buy pens, notepads, chicken, sausage, staples, file folders, etc it makes it really difficult to keep up with the amount that can be used for a tax deduction. To make things easier, ring personal and business items up separately. This will ensure that you get the entire tax deduction you have coming to you.
Tips to Make Tax Deductions Easier #6: Highlight Receipts
If for some reason you forget tip #5, highlight your receipts. Highlight the items that can be deducted and then add them up and write the total at the bottom of the receipt. Remember to put this receipt in the proper file folder.
Tips to Make Tax Deductions Easier #7: Staple Each Month Together
Once you have your bills, statements, and duplicate checks pulled together from the previous month, staple it together. Your accountant will love you for this because it will make it easier for them to go through each month and add up your deductions.
Tips to Make Tax Deductions Easier #8: Use File Folders
I highly suggest using file folders for various receipts. Have a file folder for office supplies, office furniture, charitable donations, etc. Attach a piece of paper to the front of the folder with a total for each month. At the end of the year simply add up these totals.
Tips to Make Tax Deductions Easier #9: Use Business Items for Business Use Only
If you want to deduct a computer you just bought for your business you must use that computer for your business only. The same goes for office furniture and supplies. If you use these items for personal use, you will not be able to use them as a tax deduction.
Tips to Make Tax Deductions Easier #10: Keep Up with Anything You Think You Can Deduct
If you are unsure whether or not you can deduct an item, keep the receipt anyway. It’s better to have the receipt and find out you can’t use it, rather than not having the receipt and being told you could have deducted that $500 purchase.