Two questions often asked by network marketers: "What kind of business records do I have to keep for the IRS?" And "What kind of registration system should I use in my business?"
disregarding business to disaster. You may think that "I'm interested in, I hate accounting and tax details, and if my business is enough money, it does not matter … I'll just pay somebody to clean up the records later."
Not so fast, my friend. A good record keeping system is key to making tax returns. And if you do not carefully prepare your tax returns, you will not only pay too much on taxes, but also increase the risk of a dreaded IRS audit. If an auditor can not find enough records or significant errors in his books, you can disable the deductions and make severe fines and penalties that may force you to free your life.
The good news is that the IRS does not require a system for keeping records, which should be used. No two businesses are the same, so there is no uniform form in the register. Every system is okay as long as you have a real picture of your revenue and costs.
The record can be stored manually or with a computer.
The handheld system works well with smaller household businesses and costs only 10 to 20 dollars per year in a main book and some manila file folders. I suggest a weekly booklet booklet where you can regularly register your earnings and expenses, and then update your year-to-year amounts by cost category each week. So there is always an up-to-date income and cost statement, or a "profit and loss report" on your hands. In addition to the weekly book, keep the checker account, the machine to add, the run-time journal, and the accordion files close to your income. You can sort your earnings by category; Advertising, travel and entertainment, mobile phones, etc.
The computerized inventory system works on the same principles as a manual system, but the computer automates the process. Use Tables to record remaining earnings and Bonus checks and use separate columns to categorize costs.
An even faster way to group costs, use a software program like Quicken or QuickBooks. These programs work like a checkbook register when entering all revenue and cost transactions. The Profit and Loss Report can be printed for a moment, assuming you have some basic accounting knowledge. But be careful. The software does not replace the basic understanding of loads and credits. Often the year-end reports that I make from accounting software are best described in Garbage in-Garbage Out.
If you're comfortable on the computer and have the basic accounting expertise, it's good for you! But there is no need for computer software to keep accurate records. Categorize your incomes (auto, stationery, ads, etc.) in manila folders or in an accordion file and aggregate them by category according to tax time. Place the added ribbon in each folder or stack. Both systems are okay as long as you are real and accurate on your revenue and costs.
Network marketing owners are getting more details about the requirements of the IRS Register from the 583 Business and Keeping Records IRS Release.
Jim Flauaus, Senior Vice President, Anchor Accounting & Tax, Network Marketing / MLM Tax Consultant. Owners of home businesses and network marketers are connected by telephone, email, and fax to the nation and worldwide to help them make a return on income taxes.
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