Elizabeth’s Tips Elizabeth’s Tips Business Planning    Do NOT spend too much time on the Business Plan. Start the business!   Using your 401K funds before retirement Borrow from your 401K before using your credit card Rather than making the monthly payment at a credit card rate, you can borrow from your 401K at prime (3.25% as of 11/1/09) and save hundreds or even thousands of dollars in interest. Plus, you will be keeping the interest, since it will increase your retirement account when you pay the loan back. It is a win-win!   Tracking your Expenses/Deductions Start Keeping Track of your 2010 income & expenses now! It is much easier to stay on top of your finances if you begin tracking week by week or month by month rather than by waiting until next year to sort it out. Do NOT co-mingle funds…. Keep separate bank accounts for each business, trust and/or individual account Use one credit card for business and one credit card for personal   Organizing your Financial Records Retain Copies of your cancelled checks Be sure to order copies of cancelled checks with all of your personal & business bank statements. Why? 1. To prevent embezzlement. If you have given someone else signatory authority on your account, you should be reviewing the cleared checks to be sure that the other person has not written a check that you did not approve. Even if you have not given someone else signatory authority, you should be reviewing the cancelled checks to be sure that someone else has not committed fraud on your account. Fraud is more common than you may think. Banks make errors, too. You really need to double check your account on a regular basis, so you do not become a victim! If you need any assistance with developing your accounting and control systems, please call us! 2. Inevitably, some vendor or auditor will want evidence of your payment someday. It is much cheaper to pay your bank $1 per month and have the evidence at your fingertips, then to have to pay $15 per item later. Organize your Files File your bank and investment statements by month in a binder. Use tabs (available at Staples) for each account. Keep your records organized to be sure to take the max in deductions.   Tax Withholdings – Are you getting large refunds? Do NOT give the government too much money! Be sure to be careful not to withhold too much from your paychecks. With the overwhelming federal & state budget deficits, why take the chance on having to wait for your refund? Do not use your tax refund as a savings mechanism. Develop the discipline to deposit 10% of each paycheck in an interest-bearing savings account. Get tax information you can use! Elizabeth Hale, CPA 20 years of experience eeCPA Site Map eeCPA PLC 4612 E Robert E Lee St. Phoenix, AZ 85032  We’re at Tatum and Bell Tel. 602.923.2111 | Fax 480.323.2644 | Email: elizabeth@eecpa.com | Web: www.eecpa.com Copyright © 2010 eeCPA PLC. All rights reserved.