Drew Miles on Six-Column Tax Strategy for tracking Business Tax Deductions
Filed Under: Tax Deductions
Filed Under: Tax Deductions
Drew Miles and Pathfinder Business Strategies advises its clients to utilize a tax strategy diary as an easy and safe method of audit proofing their tax records and avoid what some would say are tax scams. It is a simple form applied to business tax deductions using the five questions of “who, what, where, when and how much”. Pathfinder Business Strategies teaches clients to use this application for each business expense so that their tax diary becomes more extensive as the year progresses.
The first action is to create a tax diary in column form. You can create this file in either a word document or a spreadsheet. A large paper pad can be used if you do not have a computer. Create six columns and label the first five “who” “what” “when” “where” and “how much”. Each row will contain the date of business tax expenses.
The second action is to open both your business and personal checkbook registers and records of cash receipts and begin reviewing expenses from January 1 on. Determine which expenses should have been registered as business expenses, enter the information into the tax diary by date, and answer the five questions.
For example, if you met with a client at a restaurant and inadvertently paid for it with a personal check or credit card, place it in your tax diary and use the five questions to qualify it as a business tax deduction.
The third action would be to add a sixth column to the tax diary strategy and label it “missed deductions”. If that expense was paid for from your personal funds and not reimbursed by the business, then place the amount of that expense in the sixth column.
Go through every business expense, line by line, from that year and enter the information into your tax diary. If a business expense was paid from your personal fund and not reimbursed by the business, then place the amount of that expense in the sixth column.
This may take a while to create an up-to-date business expense history but once you are finished, tally up the numbers in the sixth column. The result will be new identified business tax deductions you may have missed and will prove financially worthwhile to your business. To avoid a potential tax scam, make sure the deductions you are indicating in your diary are legitimate business expenses.
Drew Miles is an attorney, author, teacher, and international speaker. He concentrates solely on his commitment to serve his clients and expand Pathfinder Business Strategies’ scope of programs. Visit http://www.pfbs.com for more information.
His highly acclaimed book, Zero to Success, chronicles the steps every new business owner must take to ensure success. He has been featured in Forbes, the Dallas Morning News, American Banker and Yahoo Finance. To date, he has helped 4000 business owners save over $50 Million dollars in taxes. That’s why he’s known throughout the United States and Canada as The Tax Saving Attorney™.
