Yeah, Im 14 and talkn in the buissness section. 😉
what is the point of keeping track of all the recipts from a job through out the year (or longer)?
I guess I’m tryin to ask why YOU need a copy of the recipt
“I’d rather be a hammer than a nail”
Edited 1/16/2008 11:00 pm ET by andyfew322
Receipts are just for the IRS or to prove you paid for something. the main thing is to keep track of what you paid for stuff with canceled checks or credit card receipts and how much time you spent doing stuff and running the overhead of the company so you can track which types of jobs make more money per hour invested and do more of the ones that bring in more money per hour of effort (including overhead)
"Better to go fishing and not get paid than to go to work and not get paid"
"You cannot work hard enough to make up for a sloppy estimate."
There are numerous reasons to save all those receipts.
When you pay cash, you have a record that it's paid. When your supplier sends you a bill, you can prove you have paid it.
When you do a job you need a record of what you used in order to come up with a final bill. If you don't have all the receipts and are relying on your memory you will miss things. Believe me, you will think of them later, but too late to tell your customer "Oh by the way, you owe me another $125 for the whatchacallit I forgot to bill for." Some will pay, some won't.
Sooner or later the Tax Fairy will want a piece of your hide, you need an accurate record of income and costs.
Without being able to prove your expenses the IRS gets to decide how much you made and what you owe. Not good, you won't like this one either.
Lots of reasons, and it's not just one year, at least 7 to cover your butt with the IRS.
A shoebox full of scraps of paper isn't a file system, you need to organize things before they get out of hand.
Good luck, I hate paper, Joe H
PS: If you can't handle the paper, you will not be successful in business. You may survive, but you'll never get much past making wages.
Great question Andy.
I'll explain it in language that you understand. It's money in your pocket.
If you have a legitimate business receipt, it represents 30 cents in your pocket for every dollar on the receipt. Why? Because the government doesn't make you pay income tax on the money you spend on supllies and tools and equipment.
For instance: if my brother buys a computer for $2000, he has to earn about $3000. Then, the government takes out about $1000 from his check and he has enough money left over for the computer. If I buy the computer for my business, I only need to earn $2000. I buy the computer with pretax dollars. My brother buys the computer with after tax dollars.
The receipts insure that my purchases are pretax purchases.
Ok...maybe I can't explain it in language you understand. Just remember this: if you are earning business dollars (you are), then every $100 receipt that you save will earn you $30 in tax refunds.
Bob's next test date: 12/10/07