I do not enjoy bookkeeping. It isn’t a profitable way for me to spend my time and no one likes paying for it. However, we need a decent set of books to file an accurate tax return.
The best way to do this is to have a Quickbooks Online account. The Simple Start level of service will work for 90% of businesses. There are other options such as Wave and Xero but they work more or less the same way. I will always be happy to spend some time teaching you how to set this up outside of tax season because I would teach someone how to fish.
Since we can’t fix the past, we need to focus on what to do now. Pretty much ever bank will let you download excel files of your transactions. You can easily use the sort function to go through a year’s worth of transactions. Instructions
If you order a lot of business items from Amazon, you can actually download an order history from Amazon and pull out the items you used for business. Instructions
For rental income and expenses, you can use a spreadsheet template from Zillow to track your income and expenses. Ironically, simple rentals tend to be most difficult to actually parse out since most people do not have separate bank accounts for their rentals.
For home office expenses, a spreadsheet is again the easiest way. it is fairly easy to get all your utility payments from your online account. If you own your home, include your 1098 mortgage statement and the dimensions of your home office and entire house. If you rent, include your monthly rent.
For vehicle expenses, it is important to know what you want to track. If you have a simple business that is not incorporated, you generally want to track your mileage. When you track your mileage, that is the only deduction you get. If you have a corporation or multimember LLC, you need to track your actual expenses since mileage is generally not available. For mileage, just give me the total miles for the year and the business miles.
