Basic Bookkeeping to keep the IRS Happy

Admin — Thu, 30 Jul 2009 16:06:00 +0000

So you are running your home based business instead of being employed to your usual nine to five job. Now you are reaping the fruits of your hard work and countless sleepless nights of planning and here comes the biggest question of all: how to keep simple bookkeeping and understanding the IRS? You have to remember that all income earned from working at home is still regarded as a taxable income by the IRS. Here are a few tips to help out with your dilemma.

Keep an accurate record of your income and expenses in order to find out whether or not you will have to pay Self employment tax on whatever you make. Keeping a record for your home based business income is very simple. Accounting software is by chance the holy grail of bookkeeping but can be pretty expensive. Prices may vary from brand name and manufacturer and developers. Free accounting software is available, but usually with limited functionality. An upgrade will cost you though. Other software , like Quickbooks, offer great business tracking.

Keep a simple log book or an excel spreadsheet will do. Keep all the receipts and invoices for you to have an ease of tracking your cash flow. However, if you are hiring someone to keep records of your income and expenses from your business, those fees are tax deductible. There are many people who offer home based back office accounting work- virtually. This can be your best decision since hiring someone adept to do the job can save you stress, beneficial to both parties and convenient. You need to be very careful on choosing one though since back office accounting, both virtually and just around town can be a pretty fragile subject. Look around for a good deal.

Keep track of everything. From postage, mileages (business trips) training materials expenses, business related seminars and networking opportunities to your staff (regardless of what kind of contract you are both into (hourly, monthly or per project basis) office supplies like Paper, ink, envelopes as well as office equipment and furniture are also tax-deductible business expenses even for home based businesses .

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Managing Your Money

Admin — Sat, 27 Jun 2009 06:01:56 +0000

It’s hard to earn money. It takes hard to scuffle call time good attendance, good work ethic and passion to work until that most awaited moment to come: payday. You are just everyone else. Like me. We wait for paycheck to come. We all wanted to reward ourselves after a 2-week’s hard work. I guess the biggest dilemma of all time sinks in after payday: Managing Your Money.

Managing money is synonymous to our new year’s resolutions. Every year, we record the things we need to do to have a fresh new start but often times, we disregard doing them. Managing hard earned money is difficult for people who are not used to practicing such. I guess the approach on how to value money is more on individuality. I know a person who manages his hard earned money well, and it’s sad to know that he happens to be a man. I guess one’s mentality on how to value money has to be learned regardless of gender, race and tradition. It can be outlined from childhood. It boils down to one thing: family values about money. If a child sees his parents’ attitude on how to value money with such respect, he will end up the same and the other way around.

But let’s not forget that the childhood upbringing can be tweaked a bit by peers as one grows. If one ends up with thrifty peers, he will eventually absorb the value and make his history. I guess the core answer in managing your money well is simple: DEFINE WHAT YOU NEED and WHAT YOU WANT. The battle of the NEED versus WANT can be difficult but rewarding if one has mastered the art. Example, if you WANT that oh so pretty pair shoes and it will cost you $150 a pair; STOP. You WANT it; you don’t need it for now. Go and check your shoe rack, you might have unused pairs. Then you can spend $150 for groceries. Not bad. It’s all stuff you need.

Treat your credit card with respect too. Others say these cards are enemies and there are some say cards are their best buddies. On a personal note, I love having one. I never got the chance to be over charged by the credit card company. The trick is simple: before purchasing something, ask yourself first “can I afford this?” “Do I need this?” if the answers are both yes, go ahead. If it gave you just one yes, don’t. Remember only things you can afford.

Managing your money is easy and difficult at the same time. Yes it’s a harsh world out there.

Eagle Enterprise Coaching! » Business Management

Basic Bookkeeping to keep the IRS Happy

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Managing Your Money

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