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Do you actually take pictures of receipts, or are you relying on the bank or credit card statement for your expense documentation in case of audit?
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If the answer is the statement, then you are at risk for getting many of your expense thrown out in an audit!
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This is a question that comes up all the time with my clients: “Is the bank statement enough for keeping records of my expenses?”
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Unfortunately, the answer is no. When in doubt, always take a picture of the receipt.
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Here is an example of why the actual receipt is important: Let’s say you go to the gas station and fill up your tank; you might think, “of course that’s deductible as fuel expense, it shows a GAS STATION on the statement.”
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But they also sell cases of beer at most gas station marts. An aggressive auditor could say that your “fill up” was actually you purchasing several cases of beer and throw it out.
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With everyone having smartphones these days, it’s too easy to take a picture of the receipt—and as a result, auditors are increasingly demanding on taxpayers to have good receipt records.
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Do yourself a favor and take the picture of each receipt when you make the purchase. The bank statement alone is NOT enough.
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Tag a business owner friend who really needs to see this, and comment below to let me know that you will be upping your receipt-tracking game!
There’s nothing like being on vaca and still having to file taxes! Pretty Hanoi’ed that they took me a whole 2 hrs and on top of it I aint even getting a refund! #taxseason
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This tip isn’t as sexy as deductible vet bills or tax-free vacations, but it’s just as important.
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If you’re like most business owners, you think sending out 1099s is a major pain. Besides figuring who you’re supposed to send what, one of the biggest challenges is chasing down all those W-9s in a frenzy in January.
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I’m here to tell you there is a better way.
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Get the W-9 before you pay them their first dollar.
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Once you have paid them their money, they are MUCH less motivated to fill out and hand you that W-9—after all, can you blame them? This is just one more form that is reporting to the IRS how much money they made.
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But if you withhold funds from them and make it company policy to not pay someone until you have a W-9 on hand (for individuals…corporations don’t need to be sent 1099s), the year-end process will be so much simpler.
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If I’m fully honest with you, I’m speaking from personal experience both for ourselves at @measuredresults, and especially in trying to help our clients chase down information. Those vendors just magically disappear when it comes to W-9 time.
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So do yourself a favor and don’t pay a vendor until they have filled out and returned their W-9 to you. Then file it away in a W-9 folder that you send to your accountant in January.
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Tag a business owner!
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Follow @TylerMcBroom for daily tax and business tips
Paying taxes. [*Insert collective groan*] No one wants to talk about it but everyone has to do it. In fact, believers throughout the ages have shared the pain of having to pay taxes, and the Bible has much to say on the subject. Jesus unsettled people in His day by hanging out with tax collectors, and shocked them with His response to “give back to Caesar what is Caesar’s, and to God what is God’s.”
But how do we apply that wisdom today? @Bronwyn_Lea shares today on PROPEL SOPHIA. ( IN PROFILE)
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