| Worried about how much you'll have to pay in | | | | Keep these business records as long as |
| taxes this year? Here are five simple ways to | | | | necessary. Generally, this is at least three years |
| decrease what you owe: | | | | after the date you filed your income tax return. |
| 1. File your income tax return on time or obtain a | | | | In some cases, however, it's a good idea to keep |
| filing extension. If you don't, you risk interest and | | | | records even longer. |
| penalties for late filing. You also lose the | | | | 4. Keep records to substantiate your travel and |
| opportunity to make certain tax choices required | | | | entertainment expenses for your business. While |
| on a return filed on time. | | | | you don't have to keep receipts for expenses |
| 2. Use retirement plans not only to save for your | | | | (other than lodging) of $75 or less, you must still |
| retirement needs, but also to reduce current | | | | note in a log or diary the business purpose for the |
| taxes. If you have not yet set up a retirement | | | | expense, the date it was incurred, and the |
| plan, consider a Keogh, SEP, or SIMPLE plan to put | | | | amount you spent. |
| more away on a tax-deductible basis than you | | | | 5. Make sure to run a part-time business in a |
| can under an IRA. Contact a financial advisor to | | | | business-like manner, in case it incurs a loss. By |
| set up a retirement plan. | | | | keeping records of your part-time business, you'll |
| 3. Keep good books and records for your | | | | be able to prove a profit motive and deduct the |
| business. Keep these records separate from | | | | loss of the business from your taxes. Keep |
| records of your personal expenses. Keep good | | | | separate books, records, and business bank |
| records to track both small and large expenses; | | | | accounts and change business operations with an |
| small expenses can add up to significant expenses. | | | | eye toward making a profit. |