The most important steps in maintaining a tax strategy is proper documentation.
Proper documentation increases the accuracy of the information you provide to your tax advisor. This helps your tax advisor do more for you because they have good information.
Proper documentation also provides the support the government requires in the event you are audited. This means protecting your tax savings and avoiding penalties and interest.
Best of all, when you keep proper documentation, you do a better job of identifying all of your deductions so it's a great way to reduce your taxes.
How does your documentation rank?
Here is my Top 10 list of items to document in your tax strategy.
- Annual meeting minutes for your business to support activity reported on your business tax return(s)
- Accurate bookkeeping that is up-to-date
- Receipts for expenses, particularly travel, meals and entertainment
- Loan documents between you and your entities for any loans between you and your entities
- Agreements to buy or sale assets (such as real estate, equipment, vehicles, etc.)
- Agreements between you and your entities (or businesses) for services performed by or for your entity
- Agreements between your entities (or businesses) for services performed by one of your businesses for another one of your businesses
- Summary of business activities performed in your home office and the percentage of your home used for home your office
- Mileage logs to support the business use of your vehicle
- Activity logs to support "real estate professional" status
Of course, not all of the above items may apply to you, but for those that do, you definitely want to have that documentation in place.
And, of course, the above list is not all inclusive, but if you've got this documentation in place, your documentation is well on its way.
Kenneth Hoffman of K.R. Hoffman & Co., LLC is a highly sought after tax and business counselor. Counseling Entrepreneurs, Professionals and Select Individuals who are struggling with ever changing tax laws and who are paying too much in taxes. All the while he is protecting his clients from the IRS and other taxing authorities using proactive tax planning strategies, ensuring compliance with minimal tax liability.
Discover how I can help you overcome your tax and business challenges. To start the conversation or to become a client, call Kenneth Hoffman at (954) 591-8290 Monday - Friday between 8:30 a.m. to 1:00 p.m. for a no cost consultation, or drop me a note.
I truly value your business and I appreciate your referrals. Refer your family, friends, acquaintances, and business colleagues to KR Hoffman & Co., LLC.
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