Keeping records

Abstract

"A good record keeping system is essential to operating a successful home-based business. Would you believe you could save more than $112 an hour by keeping good records? Suppose you had a $20 business expense that you forgot to record. This oversight, in effect, raises your business's net income by $20. Using 1988 figures, overstating net income by $20 causes (1) your social security tax to go up $2.60 ($20 times 13.01 percent for a self-employed person); (2) your federal income tax to go up $5.60 (assuming you were in the 28 percent federal income tax bracket); and (3) your state income taxes go up to $1.20 (assuming a 6 percent state tax)."--First paragraph