11 Ways to Protect Your Tax Savings

One of the most important steps in maintaining a tax strategy is proper documentation.

Proper documentation increases the accuracy of the information you provide to your tax advisor.  This helps your tax advisor do more for you because they have good information.

Proper documentation also provides the support the government requires in the event you are audited. This means protecting your tax savings and avoiding penalties and interest.

Best of all, when you keep proper documentation, you do a better job of identifying all of your deductions so it’s a great way to reduce your taxes.

How does your documentation rank?  Here are 11 ways to protect the tax savings in your tax strategy with proper documentation.

#1
Annual meeting minutes for your business to support activity reported on your business tax return(s)

#2
Accurate bookkeeping that is up-to-date

#3
Receipts for expenses, particularly travel, meals and entertainment

#4
Loan documents between you and your entities for any loans between you and your entities

#5
Agreements to buy or sale assets, such as real estate, equipment and vehicles

#6
Agreements between you and your entities (or businesses) for services performed by or for your entity

#7
Agreements between your entities (or businesses) for services performed by one of your businesses for another one of your businesses

#8
Summary of business activities performed in your home office

#9
Percentage of your home used for home your office

#10
Mileage logs to support the business use of your vehicle

#11
Activity logs to support “real estate professional” status

Of course, not all of the above items may apply to you, but for those that do, you definitely want to have that documentation in place.

And, of course, the above list is not all inclusive, but if you’ve got this documentation in place, your documentation is well on its way.