Whether you’re a freelancer, the owner of a small business, or part of a traditional corporation, managing expenses is one of the most important parts of running your business. The IRS requires that businesses track their expenses and keep receipts for any money spent on behalf of their company.
Track Expenses Where You Can
Use the Right Tax Form
- Use the right tax form.
- The form depends on your business structure (sole proprietorship, partnership, corporation).
- Check with your accountant to find out which form you should use.
Be Specific About Business Use of Personal Assets
If you use a personal asset for business purposes, it’s important to be specific about the use of that asset. Personal assets include cars, homes and property. If you want to deduct the cost of using these assets for your business (e.g., if you drive between two offices or take clients out to lunch), then it’s crucial that you keep track of all receipts related to those expenses.
For example: if your company provides employees with cell phones and pays the bill each month, but those employees also use those phones for personal calls or texts–and don’t reimburse their employer–then those costs cannot be deducted from taxes as business expenses because tax laws dictate that only certain types of payments made by employers qualify as deductible work-related travel expenses, such as airfare tickets bought through airlines or railroads; lodging at hotels; taxi fares between airports/train stations and hotel rooms; parking fees … More >>>