1. Save Your Receipts! On the top of the receipt write the deduction category of the receipt that matches with your chart of accounts. (Not sure what you should have listed? Check out our budgeting video for help! Or you can look here for a list courtesy of Quickbooks,) If this was a dinner or drink to talk with someone that meets the business expense threshold, be sure to write who you met with on the receipt as well as what you talked about.
For instance, if I'm spending $10 on lunch while getting a case consultation, I'm going to write "Dr. Helpful" on the top and the client's initials "case consultation: E.S." so if I get audited, I know exactly why I was there. Technically, most receipts under $75 don't need to be kept, but it's a great habit to save them all, especially since it's so easy these days. Want more detailed help? Here's what the tax-man says.
There are so many easy ways to do this now-a-days! Here are a couple options.
- Take a picture of them with your cell phone and shred them!
- Download Google Drive to your phone and scan your receipt directly to the correct saved folder! Check out the video on how to do this right below!
- Use the Quickbooks App to attach your receipt if you use Quickbooks online.
- Use the AMEX ReceiptMatch feature to match the receipt to your AMEX for business card!
- Or, go old school and save the paper copies.
- You cannot track your mileage to and from work. Doesn't count. Sorry.
- You CAN track your mileage from one work location to another. For example:
- One client's house to another.
- Work office to a work-related meeting
- Work office to a supervision meeting elsewhere
- Business related errands
- Trips to meet with business vendors
- Travel - driving to the airport, driving to a conference, etc.
I'm currently using MileIQ and I love it because it tracks EVERY drive. That means I don't have to remember to turn it on! Which... I always forgot to do even after buying a decent app... but, MileIQ saves the ride, and then you just swipe right if it's a business expense. MileIQ is free to try, but costs a subscription fee to use regularly. Want a discount? Here's the link to my code to get one. (I'm not an affiliate, just a fan.)
Got a favorite? I'd love to hear!
Bonus points: Got two seconds? Open up your business journal or calendar and jot down when you are going to touch base each month with clients who have month still due.