5 Tax Tips for Home businesses

Tax Knowledge is Tax Power!

April 15. For some home business owners, just the mention of that dreaded date is enough to give them an ulcer!. Navigating the world of local, state, and federal tax regulations seems impossible. Yet, you don't HAVE to get lost! With just a little research and added knowledge, you'll be able to successfully make your way through the labyrinth and arive succesfully on the other side. Here are five tips to help you get started in the right direction:

Tax Tip One: Learn the three "R"s

Records, records, and, you guessed it, records! Though it can take some organizational know-how and a lot of file folders, you'll find that this is one of the single most important steps in avoiding the "A" word - an audit. Cover your tracks by keeping a copy of everything that pertains to the finances of your business. If that nondescript piece of paper holds information about any of your business transactions, then you probably want it! Other examples of things you should keep include check stubs, receipts, licenses, mileage records, etc. But there's more to you record keeping than dumpingall this collected financial information into a couple file folders and letting dust gather until tax day looms. Be organized! Classify all those bits of information by type, using headings such "Business Receipts", "Income Received", "Mileage Records", and so forth. When the time comes to find a particular receipt or invoice, you'll thank your lucky stars that you have everything in such spick and span order. Trust me!

Tax Tip Two: Ask the IRS