Taxes, let’s face it, they suck. Who realllllly enjoys paying them? I’m betting no one! Receipts to keep up with & mileage to track! So today I’m sharing 5 ways to make tax season suck less!
It’s one the of many things that has to be done when running a legit business. I write a check to the IRS no less than 10 times a year. Most people are under the impression that you only have to file taxes in April & you’re good to go. Ummmm no. There are quarterly taxes (monthly for some people) & personal estimated taxes to pay throughout the year. And if you’re like myself, when it comes time to file your BIG TAXES (April 15th), you might procrastinate until the last minute! Every year I tell myself I WILL NOT wait until the last minute to pull all my paperwork together & file at the last minute! There’s no reason for it as when January 1st rolls around I have ample time to sit & get it done! I have my own system that I came up with 2-3 years ago when I was tired of sitting down, crying every year at the same time because I was overwhelmed with pulling receipts & mileage to & from shoots to name a few things! Then I would spend days organizing it just to turn in to my tax preparer!
And I will be the first to admit that just because I have a system in place doesn’t always mean I use it to it’s full potential! Sometimes the thought of sitting down to work on the backend of it is overwhelming & I put it off for another day!
So here are my 5 ways to make tax season suck less!
1. Start a filing system & maintain it monthly! So for myself I have a big red filing box that is split up into months/quarters in the inside (you can get one at Office Max; Staples). Each month I take all of my receipts, credit card statements, file them in order by date & paperclip them together with my business account bank statement on top & file it away. I do that for each month vs digging through a huge pile of receipts at the end of the year & having to organize them by date!
That way at the end of the month you can input that info into a spreadsheet! That way at the end of the year…BAM! All your work is DONE! You can double check to make sure you didn’t leave anything out & print out you stuff for your accountant! If not you’re guaranteed to be running around like a chicken with it’s head cut off or crying for a few days at a time on the floor digging through paper wondering whyyyyyyyyyyy?!
2. Use a spreadsheet to help you keep track of all above items!
Examples in my spreadsheets are ( and each are on their own individual sheets)…
1. Photo receipts (postage/supplies/equipment/services/fees/workshops/hotel expenses)
2. Photo printing receipts (any prints I did for clients from lab I use)
3. Monthly travel log of miles
4. Monthly cell phone bill
5. Quarterly sales/use tax statements
6. Estimated personal tax statements
7. Internet expenses
Keep in mind I’m not an accountant so I have zero clue what amount of different things are used as write offs. I know some things are only partial write offs! That’s something you have to talk more with your own accountant about! Things will also be different depending if your business is Sole Proprietorship, LLC, or Incorporated!
3. Get a business credit card for expenses! It’ll make things so much easier to keep track of! No using business credit card to pay for personal items. Meaning don’t run to Walmart & pick up your weeks worth of groceries & pay for it out of your business account thinking you can write it off at the end of year! Big no no!
4. Keep track of your mileage! This was a HUGE one for me! There’s nothing like having to sit down at the end of the year, look back at your entire calendar & use Google Maps to route each & every shoot you did! Ughhhh! I did that one year & NEVER AGAIN! You can do it old school way & trip your odometer each time you head out to a shoot & write it down on a pad of paper in your car! Or you can use a nifty app called MileIQ that tracks your mileage for you & then you can swipe it one way for personal trips & one way for business so you can keep track!
5. Find a good accountant! One who can answer your questions & if not is willing to take the time to find an answer for you and a CORRECT one! One who is up to date on things! One who looks into all aspects of your business to see if you’re forgetting anything!
Hopefully this helps! And if not for this tax year then you can start for the new one!