Tax Diary

Written by Lori Covington
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A tax diary is a great way to keep track of your daily expenses with an eye to smart tax planning. You can keep a tax journal in your current day planner by creating categories and faithfully entering in each day's expenses. But if you aren't sure which categories will best fit your tax situation, you may decide to invest in a diary system designed to meet your needs by professional tax consultant.

Your tax diary may include sections for your automobile; odometer readings, fuel costs and travel notes may all figure into business related travel expenses. Meals, entertainment, car rental, hotel and airline costs should also be documented, so travel related to business or job-hunting can be accounted for.

Medical costs, insurance, child and dependent care, mortgage costs and home office deductions call all be entered in your diary, resulting in an organized tax record of your year. Educational seminars, books and software related to the running of your business can be deducted, as can professional credentialing and licensing costs.

Your Tax Diary: Document, Document!

Along with keeping your tax diary up-to-date, maintaining a complete receipt file is the other vital part of your tax planning system. The wise rule of thumb is not to claim a deduction without documentation--you want to be able to verify your spending in case of an audit. Keep receipts together in an organized filing system, and remember to print receipts for purchases you made online. When you get a handwritten receipt, make sure it contains a date, see that the items are clearly defined, and price and applicable taxes are clearly written in.

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The Tax Foundation ranking,

The Tax Foundation ranking, Location Matters: A Comparative Analysis of State Tax Costs on Business, indicates Louisiana now ranks No. 2 (second-lowest state-and-local tax burden) in the U.S. for new firms and No. 10 for mature firms.
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