We all start a home based business for different reasons. Maybe you wanted a reason to get out of the house, or you needed something to supplement the family income, or maybe you have always wanted to be your own boss and a home based business seems to be a perfect fit! Being in business for yourself has many benefits. But not all of us have a degree in business finance. The moment you signed your independent consultant agreement you became a business owner! YAY! Along with that the IRS now views you as a business. Therefore you are required to follow the laws that go along with owning a business, especially when it comes to managing your business finances.
Recently I was discussing this topic with a few different individuals to see what the buzz is out there. One of the main things I heard was that most consultants and directors are depending on the reports within their Inventory and customer management programs for their tax reporting purposes. Although these reports have great information in them… and SOME of the reports are needed at tax time. These reports are merely a small part of what is required by the IRS.
I say… Use that inventory program to its fullest! The inventory programs out there make running your business and keeping track of inventory levels and customer history a breeze. But BE AWARE… you are required to be keeping proper book for your business in addition to these inventory reports. You need to keep a well kept record of every penny that comes into your business and every penny that goes out. You need to label where the money came from (income source like sales, commission, etc.) and exactly where the money went. All this information must be backed up with receipts in the case of an audit.
This is where Ascend Financials comes in. Here at Ascend we are dedicated to not only bring you the tools you need to keep proper business books… but we are also dedicated to educate you, to empower you to make better financials decisions. Call your inventory programs support department and they will tell you they do NOT have business books built into their system. Ascend Live DOES! With Ascend Live you can track every penny that goes into and out of your business in not just one of your business accounts but ALL of your accounts related to your business including checking, savings, cash accounts, credit card and loan accounts. Ascend will create a register for each of your accounts, show you in real time your spending plan, and create comprehensive and customizable reports to help you sparkle at tax time! The government just granted 5.5 billion dollars to increase the effort of enforcing laws pertaining to home based businesses (especially those with losses). This means there is more funding to crack down on those who are not treating their business like a business. Ignorance is no excuse for not following the laws. You do NOT want your business reclassified as a Hobby with the new IRS initiatives!
USE your Ascend Live portfolio(s)! Take us up on our free education! Keep proper business books and you will be able to keep your peace of mind and your deductions in the event of an audit. Remember… this is a powerful tool, but it only works if you enter the information! Let us help you get on the path to financial freedom and peace of mind when it comes to your business books! I can’t wait to see you in one of our next webinars. I just KNOW you are craving more information! Click here to see the current webinar schedule.