Friday, October 14, 2011

Keep Accurate and Detailed Records for Your Home Based Business

Keeping records accurate and detailed are important for a home based business to be successful. When you own your own company many responsibilities that you may not have had before are now yours as a home based business owner. Many of these responsibilities are critical to even a small business. Keeping the right records for your business includes keeping track of the following paper as a new business owner;

Keep all of the receipts for purchases that you make for your home based business. These purchases include office supplies and equipment from paper clips to PCs. As a small business owner you need to keep copies of all of the bills related to running your business day in and day out. These include bills paid for internet and cell phone service, membership fees and other costs related to keeping your home based business running.

Rent, mortgage interest and utilities
These are the bread and butter that many small business owners running their first business from home overlook. Home based business expenses related to your rent or mortgage interest and utilities may be deductions for tax purposes.
Save cancelled checks and paperwork related to paying for these fees and find out from your CPA or tax professional how much of any of these can be deducted for tax purposes.

Advertising expenses
Easily overlooked as one of the most tax deductible receipts for your business is the advertising monies you spend. Visit with your tax professional before you do your taxes or put the monies out there to find out if you can deduct the advertising costs for your home based business.

Professional fees related to your business
Some professional fees related to your business can be deducted for tax purposes. If you hired a professional to perform business related professional work such as a website designer you may be able to write these services off as business related expenses or small business tax deductions.

Expenses related to attorney fees, accountants or consultants for any home based business entrepreneurs are all related professional fees for your small business or home based business.

Employee records
If you have employees that work for your company any paperwork related to them should be kept. Records related to their work schedules, hours, evaluations and all else should be retained. Many times this information is needed to calculate salaries, home based business taxes and w-9s that are sent to them at the end of the year.

OSHA records
OSHA records are for those employers that have more than 10 employees for their home based business. OSHA will advise each employer individually what records they would like you to keep relative to your employees. These usually include any accident reports, time elapsed without an accident and other types of records related to your home based business employees health, welfare and safety.

These are the most time consuming records for owners of home based businesses. Copies of any and all transactions that have been processed should be kept. Many employers need these records specifically to prove your income and may be requested at any time by the IRS or other similar agency.

Starting a home based business may seem like a daunting task, but for many that have tried and found success it is definitely worth the effort. Remember that if you are dealing with your taxes and deduct anything you need to be able to prove the deduction which means that keeping accurate and detailed records is imperative for any small business or home based business owner.

Start your business with the habit of keeping meticulous detailed records and the habit will become easier and routine. It’s better to keep more than you need than not enough for even the best home based business owner.

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