Okay, it is that time of year again. You know, the infamous and oftimes procrastinated Tax Time. This essay, so to speak, will discuss and remind you about itemizations.
I first became acquainted with the term “itemization” when having to prepare and calculate business executives’ reimbursements as an Executive Assistant. Although this procedure was ongoing many, many years ago, what I learned in taking care of them I have since applied to myself.
Once becoming a sole-proprietor, I organized all useful receipts into a labeled accordian file. Such a file has approximately twelve pockets. If the already-labeled pocket is useless to me, I cross it off with a black marker/pen and print how I will use it. For instance, “Rent” has been replaced with the word “Postage” because I do not rent. Your receipts pertain to your operations, your life, and are all the proof you have if the Internal Revenue Service finds a need to ask you any questions = auditing (scary). Such a file may be purchased at any office supply store (e.g., Office Depot, Office Max, Sam’s Clubs, Costco’s, college book stores, even some grocery stores). No, they are not musical.
I do not mind sharing that I am highly organized, considered OCD (http://voices.yahoo.com/what-ocd-6874648.html).
At this juncture, I must tell you that I am not a licensed professioanl accountant by trade. I am a sole-proprietor that operates her businesses in her home. Because many of my customers require me to visit their places of residence and/or work, my (1.) automobile’s gasoline usage is one write-off. My vehicle(s) are write-offs and they have the business painted on them. When customers visit me in my home office, I am allowed to itemize (write-off) a third of my home: (2.) one third of my mortgage, one third of my car insurance, one third of my toilet paper because they use my restroom, one third of my utility bills (gas, water, electricity, heat, air conditioning), one third of my house phone and cellular phones becasue that is how people contact me. My advertisments (3.) are write-offs (e.g., business cards, marketing tools such as give-away-pens to possible customers; posters; flyers, etc. (4.) More write-offs would include the price to attend seminars and conferences pertaining to my professions. (5.) Educatonal expenses of all kinds, down to the smallest purchase of pencils and erasers – anything of use to operate your business – books needed to update your business or something in your business. (6.) Postage is a good one. (7.) Capital Equipment, although it carries a ‘deprication value,’ is still useful (e. g., computer, printer, scanner, all the software you use, etc.). (8.) Business Expenses can be a paramount of things such as paper, pens, a flash drive or two, and the stick-in-the-computer-thingy. This list can be endless! (8.) An Entertainment Expenses also has a separate pocket in the accordian file. Receipts from client breakfast, lunches, dinners, in-betwee-coffee-business-chats are saved and used. The key word is business.
KEEP AND ORGANIZE YOUR RECEIPTS!
When making a purchase that will benefit a charitable organization, (6.) that is a write-off. For instance, because the proceeds from the sales of my book called “My Diabetic Soul” will go to the Barton Center for Diabetes Education, that is another write-off for you. Any and all reading materials (book) to progress your operable knowledge in any field is a write-off!
Other receipts to keep in your ever-so-accommodating-accordian-file would pertain to (7.) medical expenses, and (8.) entertainment expenses (e.g., lunches and dinners for present or soon-to-be customers; food purchased for promotional endeavors; the change you hand out to a wanderer, etc.).
To conclude, I am sure you are fully enlightened and capable of organizing your receipts. No, it is not always a pretty sight. Keep in mind that as a United States citizen, you are assisting our government in providing services to the ‘general public.’ If done properly, and with the assistance of a (9.) paid-for-accountant (also a write-off), your State Refund Check will arrive in four weeks; your Federal Government Refund Check will arive in six weeks.
Good Luck! Persevere! And Get ‘R Done!
A. K. Buckroth