Business New Years Resolution

Most businesses I work with tend to give me their receipt, bank statements and personal expenses all mixed in a bag one week before filing. This stresses me out tremendously as I am only one person. Please use my organizers that will give you an idea of what to save and how to plan during the year.

These worksheets  were created by the Tax Book. They help you to organize your receipts and come up with dollar amounts for each business deduction.

You need to devide you receipts into the following categories

• Business Expenses
• Business only receipts (Schedule C: Profit or Loss from Business-Sole Proprietorship)
• Business miles driven
• Office supplies including ink, paper, software charges
• Advertising and Marketing
• New Equipment purchased
• Invoices and cash receipts from customers to track payments
• Meals and entertainment for customers only
• Payroll and outside labor (provide 1099 to all paying over $600)
• Meetings, memberships and dues as the Chamber
• Travel and education courses related to your business only
• For people who work out of their homes also include the following   
• Office and Home (Form 8829 - Expenses for Business Use of Your Home filled with Scehdule C)
• Utilities and bills
• Repair and maintenance bill on your home
• Internet and celphone
• Itemized deductions are personal in nature (Schedule A: Itemized Deductions - part of Form 1040)
• Realestate taxes
• State taxes paid
• Personal Property Taxes
• Home morgage interest
• Gifts to Charity
• Charitable Discounts on invoices

Adjustments to Gross income (From 1040 US Individual Tax Return page 1)

• Med insurance
• Student loan interest
• IRA
• educator expense for teachers
• Individual retirement account
• alimony paid is applicable   

Tax: (IRS: Form 1040-ES and State Tax: CT-1040ES)
State and Federal taxes are kept separate because you cannot write it off as a business expense. Keep record of your estimated tax payments including date paid, amount, check numbers, or debit account info. Self empoyment tax (medicare & social security) are already calculated and added to your estimated taxes. Your portion is 15.3% of your net profit.

IRS Tax (Form 1040-ES)
State Tax: (CT-1040ES)
Medicare and social security (Form 1040 page 2 line 65)
 
Your business expenses should be totalled at least quarterly so that you know how your business is doing and that you have collected all of you invoices and billed for all of your billable hours.

Reconcile your business checking account at least every month. This includes balancing income in and expenses out to make sure you have not missed anything.  This helps you to identify your business income and expenses to get your net profit for tax estimates. 

You should have a business checking account with your business name on it. Do not mix  and business . Make sure you have a business charge card to use for coffee, travel, gas, new equipment and so forth to keep your personal expenses separate. If you have paid business expenses from personal funds you must make adjusting entries to your business account before the end of the year.

If you require bookkeeping services sort your receipts according to the top categories and provide me with quaterly bank statements. I will then prvide you with a profit and loss statement and or a business balance sheet. Contact me to scheudle an intake interview.