While taxes may not be due until April 15th, most of us would like to file as soon as possible. But if you own a business and plan to deduct expenses, you really shouldn’t file until you have all of your business receipts organized. This ensures that everything you claim is accurate and that should the IRS come calling, you will be able to back up all claims. To help you get started, check out our 4 tips for organizing your business receipts.

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4 Tips for Organizing Your Business Receipts

1. If You Want to Deduct it, Keep the Receipt

If you do not have a receipt as proof, then you can end up in big trouble. Many people believe that simply having credit card statements is sufficient, but this isn’t true. Credit card statements will show the amount spent in a particular place, but they won’t show what it was spent on, which is what the IRS will want to see.

2. Make Notes Directly on the Receipt

You should do this with every receipt, but especially with those where you purchased things where purpose might become fuzzy overtime. If purchasing a laptop, the purpose is obvious. But what about the burger and fries you bought while taking a client out to their favorite burger joint? Write it on the receipt now, while you hopefully still remember.

3. Separate by Year and Expense Type

While you are working on 2016 taxes now, if you didn’t organize in the past, now is the time. Sort everything first by year, and then by expense type. This way you can easily find the receipts you need and can also get a clear picture of where your money is going.

4. Get a Binder and Plastic Sleeves

If you have multiple years to log, go for a big binder. Use the plastic sleeves, or page protectors, to keep everything organized and visible. This ensures that you will not be digging through shoeboxes if you need to verify an expense.

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January 16, 2017

4 Tips for Organizing Your Business Receipts

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