4 Secrets to Tracking Tax Write Offs
Updated: Feb 5, 2022
Taxes can be one of the most overwhelming parts of owning a business. Everyone is constantly saying, "It's a right off!" but if you haven't kept track of all those expenses, you'll never end up actually writing if off.
I've been there, the first year in my business I had a lot of expenses, but I didn't keep track of them. Once tax season arrived it was a nightmare trying to decipher which expenses were personal and which were business expenses.
In this blog post I'm sharing 4 secrets to keep track of write offs and how to make the process easier in the future. I'll be covering:
What is a write off and how does it work?
What expenses can I write off?
How do I find my write offs?
How can I track and organize my write offs easily?
If you're sick of being overwhelmed, todays the day we make it simple! Let's dive in!
#1 What is a write off and how does it work?
When I started my business I didn't fully understand how a write off really worked. Once tax season arrived, I realized there were a lot of expenses I had that I wouldn't have had without owning my own business. For example, going out for coffee or lunch with potential clients, online subscriptions, website costs, business cards, shipping supplies, office supplies, the list goes on.
All of these are business expenses. I realized, the more write offs I had kept track of the less money I was paying out in taxes. I spent hours looking over my bank statements and sifting through past emails to see how many other write offs I had. It took hours, ultimately I ended up giving up. I knew there were more, but I didn't have time to spend hours looking for them.
From that point on, I knew I had to come up with a better system to keep track of them throughout the year. That way once taxes we’re due I wasn't spending hours looking through every expense for the last year. Once I came up with this system I felt so much more confident. I met with my financial planner to go over the system with him and make sure I was on the right track.
He was impressed. He told me he hadn't seen anyone keep track this well in years. I was onto something! Once the next tax season came around, I felt so much more prepared and submitted everything in less than an hour or so. What a breeze! Before we talk through how to track write offs. Let's dive into what expenses are actually considered write offs.
#2 What expenses can I write off?
It's always good to keep expenses as low as possible, but for the expenses you can't do away with keeping track of them is going to keep more money in your pocket come tax season! So what expenses can you write off? Here's a list to get you started:
-Business cards, flyers, and newspaper ads
-Internet, television, and radio advertising
-Advertising at a charitable or community event
Car + Truck
-Mileage tracked during business drives