Hey, Abe! I have been gathering my expenses for the upcoming tax year, but I am getting all turned around when I try to ensure that everything is included. Where do I need to start with expenses, and what all factors in to the business?
Tax season can be a stressful time as a business owner. Fortunately, we have options, so it doesn’t have to be that way! A good place to start is by categorizing the different ways that expenses are issued or recorded, which is how I like to think of expenses for a lease/owner operator.
Settlements. These are a gold mine when it comes to reporting expenses. Better yet, the settlement is prepared by the contract company, which saves you time. At Abacus, we have a highly experienced team that will take the information from your settlements and ensure that it is accurately reflected on your tax record. A few items typically included on the settlement are fuel, lease payments and repairs and preventative maintenance. These alone account for a large percentage of your overall expenses, but it doesn’t stop there.
Out of Pocket Expenses. These expenses are items that are not included on your settlement. Out of pocket expenses can include ordinary & necessary business expenses purchased from your business account, cash or even personal account. For out of pocket expenditures, always keep your receipt as a record of the business expense and write down the amount on your Cash Expense Record form. These expenses are just as important and need to be factored in. A few examples can include: your cell phone bill, days away from home for per diem, and general operating equipment and supplies that you use for the business.
- To submit your out of pocket expenses, simply fill out our cash expense record forms, which are available through our website or upon request. Try to keep up with these at least once a month to be sure you’re not forgetting any valuable expenditures.
- We are a full service accounting firm. If you find yourself with a lot of receipts and not enough time to go through them, let us do it for you! We have a phenomenal receipt sorting service and will ensure that you’re expenditures are accounted for. Simply let us know that you are needing your receipts sorted and bring them by or send them to us through the mail. Don’t let that that folder/box/suitcase/shipping container full of receipts go to waste. Abacus is here to help!
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