Bria Sneed, CPA

Part 2: How To Organize Your Business Expenses

If your bank has the capability of pulling excel or csv reports, please save yourself some time and use the method on this video!

If you’re good in excel, this method could take you as little as one hour to categorize your transactions for the year!

Option 2:
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Step 1: Log into your bank and save down your bank statements in excel or csv format.

Step 2: If your bank limits the amount of data you can pull at once, save down all your reports and then merge them all into one excel file. You can just copy/paste the data below each other into one file.

Step 3: There will already be columns in your excel file, but you will need to manually add one titled “Category”. Just like my last video, you can also add a column for “description” if you want to take it a step further.

Step 4: Next to each transaction, make sure to list a category. These categories should be the ones that you will put on your Schedule C (will post a list soon).

Step 5: Do sum totals at the bottom for each category.

If you have any questions, drop a comment below or DM me!!

There are a variety of ways that you can show support for when you file your business taxes. This video is one way, very manual in my opinion but if you like I love it. ❤️

Option 1: Print & Code Your Bank Statements by Hand
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Step 1: Print your bank statements.

Step 2: Highlight all business transactions so that you know what to focus on. If you have a business account, skip this step.

Step 3: Write descriptions/categories next to all business transactions. Descriptions will help with your documentation should you ever be audited. Categories will be used for when you actually file the taxes.

Step 4: At the end of each bank statement, write totals for each category.

Step 5: Once you’ve done this for all your bank statements for the year, have a summary sheet that totals all categories for each bank statement. This will be the primary support for filling out your Schedule C!

Stay tuned for other options! DM/comment if you have any questions!!!

A few things to note about taxes:

1. One tax preparer is not necessarily “smarter” or “better” at their job because they can get you a larger refund. Sometimes the one getting you the larger refund is putting false things on your return.

2. Every item you receive for your taxes has already been reported to the IRS. If the numbers don’t align, you can potentially be audited. This is what we call “red flags”.

3. The assumption that your tax preparer will always “hook it up” presumes that they are willing to put in false information to get you a larger refund or prevent you from owing. Guess what, the burden of proof lies on the taxpayer, so you’re liable for whatever they put on there because you signed off on it.

4. Once the IRS suspects fraud, they can go back and audit prior year tax returns as well.

5. If you can’t support it, should you be audited, you will owe the money back.

6. Your tax preparer should be able to explain why your refund is what it is or why you owe what you owe.

7. A refund is not guaranteed every year. Our lives change and unfortunately, this means our tax situation may constantly change.

Think of it like this. You get more money now but may owe it later. This is what we call a loan. Do you really want a “loan” from the IRS? Because their terms may indicate “garnishment of wages” if you don’t pay! 🙃

This post is not to say that certain tax prepares won’t just do the work and not try to maximize your potential tax savings. This post is merely saying that tax preparers aren’t miracle workers.

If you want to project out what you will get or may owe, this is called tax planning. You drive it based on the things we can control. Find a tax preparer that can help you plan to maximize these savings, legally!

Attention Business Owners‼️

Please stop CREATING random expenses just to get a tax write off...

Do You Feel That You Struggle to Pay Your Bills Each Month Even Though You Have Sufficient Income?