The key to keeping track of tax deductions is to get organized. If you are starting a new business, or even if you have not been very well organized with an ongoing business, you can create a system to help you keep track of tax deductions and avoid the last-minute panic of trying to decide what can and cannot be deducted. The first step in getting organized is to gather all of your paperwork together, including receipts, invoices, vendor bills and any other financial documents relevant to your business. Create a physical filing system for your paperwork, using manila file folders and hanging file folders. Label each manila file folder with, for example, the specific type of receipt. Then label the hanging file folder with a more general category name. For gas receipts, you would label the manila folder "Gas Receipts" and the hanging file folder "Car Expenses." The hanging file folder would also include manila folders for "Insurance" and "Maintenance" for your car. more »