t’s Your Business, So Track Those Expenses

culled from:http://tweakyourbiz.com
Starting your own business may be the most logical decision you make. While the benefits of regular, full-time employment (a steady paycheck, healthcare and more) are comforting, many professionals like you decide to work for themselves after years of accumulating and honing their particular expertise.

Others may have been laid off from work and have been unsuccessful in finding acceptable full-time employment, but have something valuable to offer in the form of their own business. About one million Americans experience some kind of job change each month, and many of them – millions, says the U.S. Chamber of Commerce – are starting their own businesses.

It's Your Business, So Track Those Expenses

Have Faith in Yourself
The biggest hurdle to starting a business, according to a 2013 UPS study reported by Fox Business, isn’t financial, but mental. Many small business owners say their biggest obstacle was having enough faith in themselves. It must not have been too traumatic, however. More than 70 percent told UPS they would do it over again. Motivation, internal drive and a good external support system also helped them gain confidence.

A Business Plan Helps You Focus and Take Stock
Writing out a business plan is a great way to specify your goals and identify the steps to take. As you write out your plan, you may be pleasantly surprised to realize you already have many of the tools your business needs, particularly if you are selling professional services such as writing, accounting, or consulting. For example, you probably already own a computer and printer. Guess what? You can claim depreciation on it, as the IRS notes.

If you work from home, dedicate a space to your business. The IRS allows home-based businesses to deduct $5 for every square foot used for your business, up to $1,500, or 300 square feet.

It is very easy in most states to incorporate a business or formalize yourself as an LLC (Limited Liability Corporation). Visit your state’s Corporation Commission website for details. Costs related to incorporation and paying for the public announcement in a local paper are key startup costs.

Apply for a Business Credit Card and Establish Business Bank Accounts
It’s wise to apply for business credit cards because you may not be able to delay some startup costs. Any interest you pay on the card is tax-deductible for your business. To keep things simple, use the card for business purchases only. How will you pay the bills? Open business checking and savings accounts at your bank. Bank fees are also deductible, so be sure to keep copies of your statements.

Keep Receipts, and Record Everything
Keep receipts for anything you purchase related to your business. This includes warranties, equipment repair, postage, even uniforms or professional attire. Home repairs that benefit the business (such as HVAC maintenance) can also be partly written off as business expenses.

If you expect to work outside the home or are opening a store, be sure to record your mileage as you drive around looking at real estate. In fact, record mileage any time you drive for business purposes, whether it’s to the bank, to your accountant, or to meet with potential customers. Be sure you also keep receipts from business meals and other forms of entertainment, such as a golf outing with a customer.

If you belong to a golf or social club where you take clients to, you can write off a portion of membership dues proportional to your business-related use of it. Membership dues to professional associations and educational expenses related to your work are also considered business expenses.