KEEPING GOOD RECORDS - DON'T GET BLINDSIDED

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4:55 PM


The most tedious but necessary part about running a creative business is keeping good records, and being organized. April 15th is the dreaded tax filing deadline in the U.S. (that's tomorrow... Arggg).  So since this big deadline is upon us, I decided that I'd go over some excellent resources, and tips that may be useful.  No worries, I'll try to keep this short, and sweet.

Not sure I've mentioned this before, but I do have a a few; okay, more than a few years of experience with Bookkeeping,  I've learned a lot, but I admit there's much I do not know especially when it comes to keeping up with the ever changing tax codes, and rules (hmmm, starting to sound like I'm talking about social media sites).





Firstly, I highly recommend a Certified Accountant to do tax forms, and to gather good sound tax and record keeping advice.  Yes they can be costly, but in the end, they can save not only money but potential headaches.  But for those, running a small home business (with  no employees), doing your own record keeping and taxes can be easy and uncomplicated.  If this is the route you prefer, then here's a short list of resources and tips from me to you that may be helpful:

**  This list primarily applies to U.S. taxpayers, residing in the U.S.

***  I always recommend getting Professional advice from a Professional Attorney and / or a reputable Certified Accountant.  This info is solely gathered from my personal experience, background, and opinions, and in no way replaces advice from Professionals in the Accounting and Legal industry. 

01  //  Record Keeping - Quick-books Software
  • Pro's  -  customizable, extremely thorough tracking income and expenses, reasonably priced off-line software, alternative online version available, up to date accounting features, inventory tracking, profit & loss details, labor tracking, customer contact details, intuitive, user friendly, many Certified Accountants recommend and use this software, provides Accountant tallied forms, great support, you can quickly pull up numbers, graphs or forms with a few clicks
  • Con's  -  learning to use Quick-books can be a bit tricky until you get use to it.  Ultimately, I feel it is a user friendly software, even for non-accountants or non-experienced bookkeepers. 

02  //  Filling Out Tax Forms  - Turbo Tax Software

  • Pro's  -  up to date with current tax codes, thorough for non complicated filers, presents questions the software uses to fill out your tax forms for you, online and offline versions, can save and work on it later, can transfer your prior year tax info to current year (if you used Turbo Tax the year prior), very inexpensive, covers Federal and State Tax Forms for Personal and/or Small Businesses
  • Con's  -  not as good as having your own qualified Certified Accountant doing the State and Federal Tax forms for you

03  //  Mailing Federal & State Forms  -  Always send "Certified" U.S. Mail
  • Pro's  -  When filing taxes by U.S. Mail, "Certified" mail is one of the few acceptable forms of "proof" of the date you sent it, low cost - I have met people who had to pay fines in the thousands, just because they could not prove the date they sent their Tax Forms (don't get blindsided on this one) 
  • Con's  -  there are none 
**  Important: I DO NOT recommend sending taxes with a "Return Receipt", especially "Return Receipt with a Signature" - this can actually delay your Returns from arriving to their destination on time

04  //  April 15th Tax Deadline  -  Don't wait until the last minute to file on April 15th, like many millions of other Americans do.  Either file any day prior to the 15th (even the day before) or file an extension if you're just not ready to file the final return yet.  But remember, if you think you owe you have to include a payment.



05  //  Paying With a Check - Remember to include SS#, Form #, and Tax Year it applies to, make a copy of your check, and send "Certified Mail" 

06  //  E-file or Paper File?  - If you are getting a refund, this way is much, much quicker for sure; however, be aware that if some day the State or Federal Government decides that you owe a penalty or interest for something, they can collect the money first via electronic transfer if you've given them access to your account. Then later you would have to show them proof they were wrong, using your good record keeping and to get your money back. 

07  //  Burden of Proof is on the Taxpayer  -  Unless you can prove otherwise, "you are guilty until you prove your innocence".  In other words, "they are right unless you can prove them wrong". This is why it is so very important to keep good records and an organized paper trail. 

08  //  Throwing away Tax Records After 7 Years  -  Don't do it!  Keep and save them forever.  Technically, anything brought up in the last 7 years, could potentially result in having to go back another few years, and remember,  the burden of proof is always on the Taxpayer.  Just saying...

Okay, enough said on this subject. Good luck, remember to breathe, and I hope this was helpful!

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