*Canceled, imaged or substitute checks or any other proof of payment for supplies, packaging and postage, office supplies and self help books and/or magazine subscriptions pertaining to your business.

*Bills/Utilities for phone, light, internet service, Etsy and PayPal fees.

*Mileage logs going and coming from your local bead shop and post office.

Here are a few reminders, if you must go to a retail store and you have been charged tax, save that receipt, because you can claim that on your return. Also, keep a record of the cost to you of any jewelry you have sold (but have not been paid for), donated, or given as gifts. These can be written off on your taxes. Last but not least, calculate the total amount of the cost to you on your unsold pieces as ending inventory and save that same amount as your beginning inventory for the next tax year.

Check with your accountant if you are not sure what you can write off or exactly what amount(s) to calculate in the inventory.

Good record keeping throughout the year saves you time and effort at tax time when organizing and completing your return. Not to mention it will be easier for your accountant and you to complete your return quickly and accurately.

For more information on what kinds of records to keep, see IRS Publication 552, Record keeping for Individual, which is available on IRS.gov.

Tax Time Tips
Written By: Elizabeth of BBBcreations.etsy.com

Every good business uses some type of expense trackign mechanism. If you’re a small business owner who doesn’t yet have a way to sufficiently track expenses, it’s imperative that you get one. A business credit card makes it easier for you to make purchases and track expenses and to keep those expense items organized. It also lends credibility to your business even if you’re just a one-man operation. Consider going to lunch with a client and using cash to pay the bill. You look a lot more professional if you take out a credit card (with your company name on it) to cover the cost.

Assuming that you understand the importance of business credit cards and already have one, you should learn to start using it wisely. Wise use of your card means using it for every single purchase that you make for the business and only for those purchases made for the business. In other words, you don’t ever pay cash for business expenses and you don’t ever put personal purchases on your business credit card. This is a very easy way to keep all of your purchase information in one place. It also keeps your personal expenses separate so that you don’t have to think about them when it comes time to tax time.

The main reason that people hate tax time is because it’s so time-consuming and frustrating. If all of your business expenses are made on your business card, you’re not going to have this problem. You can get a copy of your annual statement and easily see what money was spent. This can be compared with information from your bank account to see how your expenses compare with your income. Having this information on just a few documents makes doing your taxes a fairly straightforward process. It’s just a matter of plugging in the numbers and seeing what happens.

It is possible to actually use your credit car to pay your taxes if it turns out that you owe money to the government this year. The benefit of this is that it’s done easily and it keeps yet another business expense organized on the card. The drawback is that there may be a fee associated with using your card to pay your taxes. Weigh the fee against the benefits and decide whether you want to use your card or your bank account to pay what you owe.

Robert Alan is an editor for www.CreditCardAssist.com and frequently contributing writer on various credit card-related topics.

For example, if your place of doing business takes up 5% of your house, you can deduct 5% of your heating expenses for the days you work. (In other words, if you don’t work weekends, you can’t deduct for weekends.)

You can deduct items such as mortgage interest (though not your mortgage itself), electricity, telephone, insurance, and expenses for maintenance and repair. In general, you can deduct the portion of expenses that directly relates to your business.

You can deduct costs for your internet service provider in proportion to the amount you use it for your business, too. If it’s used completely for business you can deduct it all, but be certain before you do this that you are not using it for other reasons.

Having a CPA do your taxes for you has major benefits. They have computer software made up by tax pros and former IRS workers that you wouldn’t ever be able to use unless you went through lots of accounting training.

Be 100% honest with your CPA about everything. If you are called in for an audit your CPA will tell you to say nothing but your name and your CPA does all the talking. The IRS has to find mistakes not you. If a CPA does your tax you will get deductions you would never know to take and your CPA will also take away deductions you cannot legitimately take.

A CPA will cost you more but will get you much more back. Tax filings done by CPAs are far less likely to be called in for audits because the IRS knows the CPA’s reputation is at stake with every tax form filled out and so the CPA will be very careful that every little detail is done correctly.

Keep a separate notebook for tax deductions and on each page make a heading for all possible deductions like advertising, supplies, repair parts, phone, computer, etc. and write them down and save ALL your receipts in a separate large envelope. Write your deductions in this notebook, everyday, as they happen. Remember, your tax preparation is a daily, year round effort and is an important part of your business.

Write everything in your notebook that could be a deduction and then at the end of the year let your CPA decide what is and is not a deduction. He or she knows and you don’t. It is their job to know. This way you won’t miss out on any deductions you don’t know for sure on and you won’t take any deductions you don’t have coming. Pretty neat huh?

You will get a lot bigger income tax refund this way and have a clear conscience you did all the right things and you will not have any worries about a scary IRS audit. Talk over with your CPA what he thinks about the way you are keeping records and learn from him or her better ways to do it. They will usually have valuable tips for you to help you run your business better. This chit chat at the end of your tax preparation is invaluable to you.

The tax benefits of operating a home based business enable you to deduct things you would otherwise be paying in full. If you are considering a business from home, it’s a good way to lower your costs. This is just one more advantage of working from home.
Source:

http://www.irs.gov/faqs/faq-kw82.html