The Tax Man Cometh

"Keep your receipts!”

That was the message I got at a wedding I attended nearly 20 years ago from an accountant after I told him I was in the midst of starting my own business. It seemed like a scene out of a movie, but it may have been the most sage advice I have ever received. 

My accountant friend told me over a cocktail or two that a lot of things matter when starting a new business. A business plan is most important, of course, because it points the way as you build a foundation. A marketing plan is next on the list. It allows you to build your image and get your name out into the market.  

But it all comes down to dollars and cents in the end, and that is where receipts come into play. The government–both state and federal–always wants its share of your profits, and these agencies are eager to get their hands on as much as they can. Receipts, my accountant friend told me, are the best legal way to hold these hounds off. 

As you build your business, there are many expenses that can be deducted from your revenue, and therefore protected from the Tax Man. They include such things as health benefits, advertising costs, enhancing the look of the store and even travel and entertainment costs, when appropriate. Some states and the federal government even give businesses breaks for installing energy-efficient equipment and, in some states, using certain types of labor. 

Of course, an accountant can give you all the potential deductions and savings, and it is important to visit with one as you start your business and continue conversations periodically through the year. 

The point is that the government does not have to get everything. Working with a competent accountant and learning the tax laws can create a situation where the government is actually a partner in your business. Do this right and they will end up paying for some of your much-needed repairs and business endeavors.

It makes a lot of dollars and sense.