Here’s one way to ensure you take every tax deduction you are entitled to as a small business owner. This illustration will bring the lesson home. Take a five or ten dollar bill out of your wallet. Now pitch it in the trashcan. No one does that, right? Actually, many small business owners essentially throw cash in the trash every time they lose track of a tax-deductible expense.
Here’s a typical scenario. Abe the businessman just lost out on a $10 tax deduction when he stuffed the turnpike tollbooth receipt into his pocket. When the dry cleaner found it, he threw it away.
Here’s another illustration. Oops! The printer’s out of paper, and off you run to the office supply store to grab a case. You’re on a tight deadline to get that 200-page report to your foot-tapping client. As it turns out, you were in such a hurry to get out the door you can’t seem to remember what happened to the receipt. Oh well, it’s off to the next appointment.
What difference does such forgetfulness make in the long run? Isn’t it just pocket change, after all? Surely time is more important than money when you have a million tasks to do, isn’t it?
Maybe a look at these 54 ways to save from America Saves.org will change your mind. See if you don’t agree that tracking deductions is a great way to beef up your bank account, particularly when you take compounding interest into account on the money that you save.
If that’s not reason enough to systemize your tax deduction tracking, look at it another way. Uncle Sam burns through trillions in wasteful spending every year. Why not send some of those tax dollars back in your direction? That should spur you to reconsider the value of accurately tracking expenses. Make every dollar count.