3 DOs for Documenting Entertainment Expenses

Happy New Year! 

If you’re like me, you’ve likely identified some ways to improve your business in 2015. If better recordkeeping is on your list of resolutions, I’ve put together a few tips to help you keep things in order.

Entertainment Expenses: Recordkeeping DOs

  1. Keep Receipts - Keep receipts for client/employee lunches, dinners, etc. Entertainment expenses are tax deductible if you have the proper documentation. 
  2. Take Note - Write a note on the receipt that documents what the purchase was for or who you entertained and why. 
  3. Make a Copy – Make a copy or take a photo of your receipts. Receipts fade over time, but you can protect your deductions by scanning or copying your receipts. 

Remember that bank/credit card statements aren’t enough. Your credit card statement or canceled check proves that you paid the money. Your receipts show what you bought.

Need help getting organized for 2015. Let’s hit the books together! Email David@DEKEbookkeeping.com to learn more. 

Purchasing Equipment

We are ¾ of the way through the fiscal year, and you likely already know where your business will fall on the profit/loss spectrum. Armed with that information, now is the time to explore the variety of ways to increase profits or decrease tax liability (depending upon your business and personal goals). 

In an effort to decrease their tax liability, many business owners opt to purchase new equipment, furniture and/or vehicles for deduction purposes. The concept is relatively simple, but there is certainly more than one way to approach deductions (i.e. deduct the total cost, deduct portions of the purchase over time, etc.)  

Deducting portions of a fixed asset purchase over time (depreciation) may be an appropriate method. Alternatively, many business owners take advantage of the accelerated depreciation opportunity provided by the IRS. Accelerated depreciation allows for greater deductions to be taken in the earlier years of an asset’s life (to include fully depreciating the cost of a fixed asset in the year the item is purchased). This results in an immediate reduction in business profits and ultimately tax liability. 

So what makes sense for your business? Contact David Knab to learn more about simple ways to reduce your tax liability. 


Setting the Records Straight

Diligent bookkeeping can be overwhelming, largely because business owners don’t think much about it until tax season. The truth is that there is no better time than now to set your bookkeeping records straight. 

Every small business owner wants to minimize his or her tax liability, but it is impossible to do so without the proper documentation. Are your bookkeeping records in order? Not sure?  It may be helpful to consider some of the following:

  • Tracking Expenses 
  • Expense Payment/Prepayment
  • Tracking Income
  • Determining Profit
  • Deferring Income

Over the next few months I will be expanding upon the items listed above, so stay tuned for details!  

Want to learn more about the benefits of proper business bookkeeping? Contact me for more information.