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Keep Tax Records Years

Question: How can I keep better tax records this year?

I’m single, self-employed, doubtful and scared of audit if I claim a home office, travel a lot for work (car, plane, hotels), have to eat on the road a lot, but usually alone, have a 401(k), member of professional associations, medium credit card debt, minor bits of work equipment, moving from Los Angeles to New York this year.

I welcome general hints but especially interested in links to more complete resources.
I have heard that receipts under a certain amount aren’t necessary. Just record the amount.
I have heard that a home office needs to be architecturally separate and reserved only for business use if it’s a home office, and I’ve heard that claiming a home office is a guaranteed flag for an Irs Audit.

Answer: If you don’t want to spring for software you can use excel to keep track of expenses and revenues. A home office does not have to be separate. You basically take the percentage of square feet you use of your home as your office and that percentage is what you will use to calculate how much of your electric bill, rent or mortgage, telephone, internet access, and other home expenses you can deduct for you business. You need to keep mileage records as well as any receipts while traveling. Any money that is spent on your business needs to be kept in some form. You can also deduct for your vehicle, depreciation on equipment, and moving expenses. Just keep everything that pertains to your business and I would take it to a credible CPA or someone with an Accounting degree and they know how to interpret the IRS code. I would do this especially if your business is growing and actually making money and if you expect to hire more employees. This way you will have a business relationship with an accountant that can help you with payroll as well. Good luck

Personal Financial Advice : How to Keep Adequate Tax Records