Having multiple streams of income is a great way to insure that you and your family have protection from an unforeseen job loss.
Having more than one source of income requires you to keep accurate records for all of the projects you complete and any money that is exchanged between you and another person.
If you are paid for a project, it is important to give the person a receipt and to keep a copy for yourself.
You need to take the time to organize all information regarding the many streams of income you may have.
This can be easy if you take the time to establish a great organizational system.
Step 1: Establish an Area Dedicated to Pertinent Paperwork If you store your documentation at your home or in an office, it is important to store that paperwork in a way that is organized and easy to find.
Many people choose to organize paperwork in alphabetical order.
You can get a file cabinet, folders and labels for each client that you have.
You can then label each folder with a client's name, place that client's paperwork in their specific folder and then place the folders in alphabetical order in the cabinet.
This will allow you to gain access to information regarding each client quickly and easily.
Step 2: Organize Receipts It is important to keep receipts regarding gas, tools or equipment that is needed to complete any projects.
Many people choose to make copies of the receipts and place them in a binder in order of the dates they were received.
This option will allow you to see how much money you spent in a certain month, compare the cost for supplies at different times of the year and show your tax consultant exactly what money was spent throughout the year towards maintaining and running your business.
There are many expenses that are considered tax-deductible, however, many require proof of the expense.
Receipts can be used as proof for the expenses you incurred throughout the year.
Step 3: Digitally Copy Pertinent Documentation It is now possible to scan just about any paperwork and save it on a computer.
It is a good idea to save all pertinent information regarding money spent and received in digital form.
There are also online storage sites that you can use to store the information to insure that you have the information whenever you need it.
It is also a good idea to use the online storage sites just in case your computer is stolen, lost or damaged, you will still have access to the information you need.