It’s tax time! If you are a new or experienced home party consultant you may have some questions about taxes. In this four part series of articles (click here for Tip #2, Tip #3 and Tip #4) my husband, Pete Lachance, CPA, will provide some tips and tricks to help reduce your taxes and make your life easier when filing your home party business taxes.
No I don’t mean you should leave your husband. What I really mean is you should open a separate bank and credit card account and make sure all your business activity is conducted through these accounts. This is my number one suggestion for any new business because it will reduce your taxes and make your life easier come tax time. Here are some of the benefits you will reap with separate accounts:
Reduce Your Taxes!
If you currently commingle your personal and business activity I guarantee you are not claiming all your business expenses on your tax return. Why? Because when you reviewed your personal credit card statements you forgot that trip to Wal-Mart back in July was to buy supplies for your home party plan business. But, if you setup a separate bank and credit card account and pay for all your business expenses from those accounts then you’ll never miss another deduction again.
Not only will having separate business accounts reduce your taxes but you will also save time gathering the information to prepare your taxes. No longer will you have to scour all the transactions in your personal statements. With separate accounts you can quickly summarize all the activity in your business because only your business activity is in the accounts.
Discover How Much Money You Are Making!
Do you know how much money you are making from your home party business? How do you really know how much you are making if you commingle your business activity in your personal accounts? With separate accounts you can easily find out, just look at your current balance in your separate business bank account! Doesn’t get much easier than that.