But, as mentioned, taxes are a reality of our business and personal lives. Here are a few
thoughts about making the experience less painful.
Keep Excellent Records
If you plan to take a deduction, you’d better be sure you document it. The number one
reason the IRS will disallow a deduction is because there isn’t an acceptable record to
back it up. If the tedious task of record-keeping isn’t your cup of Earl Grey, you might
consider using the services of a freelance bookkeeper or getting up to speed on using
QuickBooks or other accounting software. If you keep your own books, you should set
aside a specific time to record your transactions. Ideally, this would be daily or at least
weekly. Doing it on a monthly basis, or worse, annually, can be a sure recipe for missing
things, losing documents, and resorting to relying on memory. The IRS isn’t fond of busi-
ness owners’ memories.
QuickBooks Pro, MYOB, Freshbooks and other accounting software make it easy to
keep track of your business’ income and expenses. QuickBooks is a small business staple
that has preset business categories and guides you through the initial setup process. It au-
tomatically sets up various income and expense categories that can be customized for
your specific needs. Once it’s set up, you simply enter the item, assign it to a category,
and you’re done. Financial reports can be generated that make your taxes and planning
more accurate and easier. You might consider aligning your categories with those on the
Schedule C. Doing so can save you and your tax preparer time when completing your tax
returns.
Beyond this, you’ll need a system to file receipts, invoices, and other documentation.
Make copies and place one set in various folders designated for live performances, in-