Training for Success with Your Internet Business Nike Air Max 1 Australia , Article 2, General Expenses Business Articles | September 10, 2008
The second in a series of articles that are a must read for all business owners, whether they are operating an on line home based business, or a regular home based business. The tips and suggestions are provided from real life situations as seen and experienced by the author.
Now that you have your own home based business and whether or not you have already received any income, it is absolutely essential that you keep a record of all your expenses. If there's one thing more annoying than record keeping, it's paying unnecessary taxes because you didn't keep a proper record of your expenses.
What are expenses? ?Any money that you spend with the intention of earning income for your home based business may be considered to be an expense for your business. So go back to the date upon which you either set up your home based business or started your business and find all the receipts that show that you spent money for your business. If you cannot find receipts for some of the money you have spent then make a note of what the expense was for, to whom it was paid and the amount. You will find it easier to have a separate piece of paper for each expense.
From now on Nike Air Max Flair Australia , ALWAYS get a receipt when you are spending money on your home based business, even if it is only for a cup of coffee. If you use a credit card and cannot find the credit card receipt, keep a copy of the credit card statement and highlight the entry.
I suggest that you obtain some file folders and label one for each month. Keep your receipts for each month in the correct file folder. Alternately, you may wish to keep a record of your expenses by category. This may simplify completion of your Income Tax Return for your Home Based Business at the? Taxation Year End.
A suggestion of the categories required are as follows:
If you are purchasing product for resale: Invoices for all purchases of products, including shipping costs. This will enable you to establish Cost of Goods Sold. We will cover these calculations in a later issue.
Period End Inventory. (You will need to count the stock that you have in hand at Year End). This means your Taxation Year End. Remember it may be possible that your home based business has a different taxation year end than you have personally.
Value Added Tax Records such as VAT or GST if required.
While this list is not exhaustive, it does cover the main areas of permitted costs. Most Tax authorities will not allow costs to be expensed for individual items purchased in excess of a certain dollar value (say $1000.00), they insist that the items be capitalised and then depreciated over a number of future years. You will need to find out from your tax advisor or the Tax authorities what these limits are and what the depreciation charges are that they will allow. Every country has wide ranging and differing rules in this respect. You will also need to maintain records of such capital costs that you might incur.
We will go into more detail on Capital items in a later issue.
Taxation legislation differs between countries and each country may change their rules at any time. The information provided in these newsletters is accurate at time of publication. You should however seek specific information from your Tax Advisor or Taxation Department as it relates to your own situation each year that you are required to provide Income and Expense Statements.
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21.09.2019 03:33
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