Bookkeeping and your 2011 tax return

Here are the transactions you need to be aware of in order to file your 2011 small business tax return:

Cash transactions - these are items purchased will cash. Cash receipts are the only proof you have of the expense your business incurred. Separate them out and put them in similar categories, such as parking, fuel, and office supplies. Total each category.

Credit Card Transaction – collect all of your statements for the year. You will need to categorize each transaction by expense, same idea as the cash receipts. Total each category.

Bank Account Transactions - Collect bank statements the way you did the credit card records. Review the bank statements then categorize checks and debit transactions and get a total for the categories. Also, go through and categorize deposits that are income vs loans.

Business transactions paid by personal accounts. Sometimes, we forget the business credit/debit card and use our personal cards. Go through your personal credit card and bank statements and categorize the business transactions, and then total those up by category.

At this point an excel spreadsheet can be helpful. You can get a list of the categories you've created and enter the figures to come up with the grand totals.

Accountant Jackie David, who provides bookkeeping and accounting help around La Canada, California and Glendale, California will send a free the template she uses for anyone who signs up for her blog or contacts her through email. Log on to Jackie's accounting blog Technoccountant's Perspective.