Entrepreneur Magazine had some great tips on managing receipts for tax preparation I thought everyone should know.
These are easy to follow and will save your sanity around tax time.
To the IRS, a receipt is proof and provides you audit protection. Managing them is important.
First, keep a detailed schedule of where you traveled, what you did and whom you met for lunch or dinner.
I keep my appointments in my Google Calendar. There are tons of other apps that make this step very easy.
If you need to recall, it’s right there. Voila.
Second, always pay by credit or debit card, not cash.
Cash is very difficult to track and to reconcile. Besides, let the credit card companies do the hard work of providing you a consolidated monthly statement.
At Best Small Biz Help.com, we’ve integrated our monthly credit card downloads with our QuickBooks online program. That makes allocating expenses very easy.
Ask your bookkeeper the easiest way to reconcile monthly credit card statements.
Third, always ask for a receipt, even if you may not need it.
Keep an envelope in your bag to collect all the receipts that are floating around in your life.
Before the day is over, write what the purchase was for. Or write on the restaurant receipt whom you had lunch with.
Fourth, travel and entertainment expenses are especially important to keep in order.
Business and personal expenses are not the same.
Make sure you note what you talked about over that lunch, coffee, or dinner.
That helps prove that expense was business related.
Fifth, scan your paper receipts once the year is over.
The IRS can go back up to six years in an audit, so keep an electronic file of your receipts in case you ever have to prove an expense.
www.crashplan.com has a great program in the cloud to store your electronic files of all kinds.