Reprinted with permission from the Microsoft Small Business Center .
The U.S. tax code is so complicated that it's no surprise many small businesses and individuals make mistakes in their bookkeeping and filing.
A little small business tax advice - don't count on any mercy from the IRS.
Take it from a tax professional. Here are the more common mistakes, and what you need to do to avoid them.
1. Not saving receipts of less than $75
People sometimes get excited when they hear that the IRS doesn't require receipts for meal and entertainment expenses of less than $75. Don't fall into this trap.
You may not need the receipt, but you still need to have some sort of record documenting where you went, when you went there, who you were with, the business purpose of the meal or entertainment and the business relationship between you and the people you were with.
When you look at the list of requirements, what could be better for documentation than a credit-card charge receipt? In most cases, the charge slip will already have printed on it the name and address of the restaurant and the date and time you were there. All you have to do is write on the slip who you were with and what the business relationship and purpose was of the event. While a receipt may not be required, for many people hanging onto the receipt is going to be easier than keeping an entirely separate log of the expense information.
2. Lumping equipment with supplies
Equipment is a capital expend...
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