When I first started in business, and still worked for “the man,” I learned that record keeping is sexy.

Yea, I know…it doesn’t sound sexy. Truth is, something as simple as a mileage log translates directly into saved money and saved time.

Good records save you money because they make deductions possible (read: pay less tax).

They save you time because having them keeps Uncle Sam off your back. Not having them puts you in Uncle Sam’s pocket (and maybe even in jail).

Follow these record keeping rules:

• Rule 1: keep all tax records for a minimum of 3 years and long-term records (real estate closings, stock transactions, IRA or retirement plan purchases) for a minimum of 10 years
• Rule 2: To qualify as a “receipt” for tax purposes, logs must be dated and kept continuously, receipts must be dated and have the business name (not yours – the name of the business issuing the receipt…even if it’s just a corporate ID#).
• Rule 3: Sort receipts by date before all other criteria. Having all of June’s receipts in one envelope is better than having all your gas receipts for the year in one envelope.

For example, keep a simple mileage log in your car to remind you of all your business mileage and store travel related receipts. At today’s standard rate of $0.55 per mile, 10,000 business miles gives a $5,500 standard mileage deduction.

On the last day of every month, take all the receipts from your mileage log and put them in an envelope. Write “travel receipts” with the month and year on the envelope. Then you can stash it in your favorite shoe box or desk drawer.

Get sexy. Keep good records.