Personal Accounting
If you own a checking account, then it is relevant that you balance it at a regular period of time to monitor any differences between what’s in your statement and what you crafted for checks and deposits. There are many people who do it one in a month when their statement is mailed to them, but with the introduction of a term called online banking, you can do it daily if you’re the sort whose banking tends to get away from them.
You maintain a record of your checkbook to monitor any charges in your checking account that you haven’t noted down in your checkbook. Some of these charges can be ATM fees, overdraft fees, special transaction fees or low balance fees, if you’re required to maintain a minimum balance in your personal account. You also monitor your checkbook to make note of any credits that you haven’t noted previously. They might include automatic deposits, or refunds or other electronic deposits. If you own an interest-bearing account then you want to record any kind of interest that it’s earned.
You should also check if you’ve made any errors in your record keeping or if the bank has made any kind of error.
Another form of accounting which is very tedious is the filing of annual federal income tax returns. Many people use the services of a CPA to do their returns; while other courageous people do it themselves. Most forms include the following items:
- Income – The amount of money that you’ve earned from working or owning assets, until and unless you don’t get specific exemptions from income tax.
- Personal exemptions – There is some amount of money that is excused from tax.
- Standard deduction – There are certain deductions that are reduced from the taxable income.
- Taxable income – The total income that’s subject to taxes after all the personal exemptions and deductions are factored in.