2013 Accounting Tip #2

There are many ways to get organized for taxes. Each person needs to find the way that works for them to ensure that they will stay consistent and current. We will provide you some tips at getting started, you may even find a tip that you like better than your current way of doing things.

Those new shoes aren’t a business expense, but your business credit card was handy so you used it. Sure, you can pay back your business for a personal expenditure, or the other way around.  However, when you do this, things get complicated fast, and you don’t need that headache. By keeping separate bank and credit card accounts for business and personal, you’ll save yourself hours of work and make it easy to keep track of deductible expenses in one place. It also makes it clear when you are reviewing your Profit & Loss Reports pertaining to Income and Expenses for the year. If you are mixing business and personal expenses, you are never going to have a true picture of what your business is doing and the bottom line.  We recommend handling business and personal finances as independently as possible, besides the fact that the IRS states it is required otherwise they consider those transactions as a co-mingling of funds.

Do yourself a favor and start the year out with a clean slate even if you did things differently last year.

Tags: Accounting, information, Processes, Revenue, Tax Time