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Home Businesses And Tax Implications

Aug 17, 2007
Any business owner running their own business, large or small, from a home or from an office must maintain excellent records for multiple reasons. One reason is your customer and support of warranties and service that you may provide. Another is the need to file an income tax statement at the end of every tax year that meets the standards of the tax agency you are dealing with in your country. Many business owners recognize early on that it is more efficient and profitable to hire an expert to complete the filing and ensure that they are following all of the latest legal changes to the tax act as well as ensure that they receive all of their taxable deductions that they are entitled to. Most people cannot keep up with the changes and the best method is to delegate to an expert.

There is still a lot the business owner must do and can do to make their lives easier and reduce the cost of the accounting and tax preparation that is required. Fundamentally it is being organized, however there are a number of steps that make this job so much easier. For example, every transaction should be covered by some sort of record, either a paper, or an electronic record. It is surprising how many people do not do this. At a minimum the record should show the date, the description of the item, the quantity, the price, any taxes paid and the customer or seller depending on whether you are selling something or buying something. Documentation is key when it comes to the tax agencies.

Next, depending on volume, set aside time on a daily or weekly basis to put your receipts in order. Complete statements, summarize accounts and organize all of your receipts to make it easy for your accountant to develop your statements. The less time they spend on doing this will usually mean less cost to you. Consider hiring a lower paid clerk to complete the organization of all receipts, payroll etc for you, which is then turned over to the accountant at the appropriate time.

Finally meet with your accountant on a regular basis, usually after your year end and well before your tax statements are due to finalize any tax strategies that you want to put in place for the past year as well as the coming year. Stay organized and you will have a much smoother relationship with your tax department.
About the Author
Elias Georgi is an experienced and successful sponsor, mentor and coach for many thriving, tested and proven home businesses. Elias offers proven Internet opportunities and strategies. Visit his Website: work at home business opportunities, he also runs the article directory.
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