Money

Business Finances

The moment you realize you want to go into business for yourself or even getting involved with someone else’s finances, it’s always a good idea to categorize your expenses in advance as best as you can. Not only are many items taxed differently but it’ll just make things easier when the time comes. Not to mention if you’re paying a bookkeeper by the hour you could save some money because if you don’t categorize them they will and they’re going to charge you for it. Additionally, categorizing in advance will simply help you monitor your expenses more efficiently and determine where you should invest more or less money at any given time.

Over time as you get more familiar with the process you’ll find yourself getting more specific when you assign expenses and more prepared when the government re-assigns expenses which happens on a regular basis. You also want to take into consideration when you relocate your business whether you have a storefront or online business that deductions can be affected state to state and even city to city. Also remember not only can the category deduction amounts change but when you file a deduction can affect it as well. For example, take a look at this article ( “deducting your computer”) I found that explains the different policies on deducting your computer for business. Notice how when you deduct matters. Always check with your tax professional for further details.

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