If there's one time of year that I don't really look forward to, it's tax time. As a solopreneur who loves the creative parts of her job but isn't so crazy about the financial parts, tax time is kind of a drag. All year long I do my own accounting, pay my estimated taxes, calculate my income and losses, and handle all of my confusing expenses on my own, but I do it begrudgingly. Very begrudgingly. So, today I wanted to share a few tips for making this process easier and much more "enjoyable." I'm no expert, but here's what I've found to be helpful in my 4 years as a solopreneur: 1. Create a spreadsheet to track your expenses throughout the year. I know that doing this is a chore, but it's WAY better than my old system, which went something like this: Save or print every receipt and put it in a folder that is bursting at the seams. Then, at the end of the year, go through all 100000000 receipts and enter them into a spreadsheet. [This system took FOREVER.] But now, I just keep my expenses spreadsheet minimized at the bottom of my laptop screen, and whenever I make a business purchase, I enter it right in. If I have an actual receipt, I enter it into the spreadsheet at the end of the week and then put it in a folder. At the end of the year, I just organize my spreadsheet by expense category, and voila! My expenses are totaled up. 2. Create a spreadsheet to track your income throughout the year. Same as the above--keep track of what you're bringing in! Sure, you can rely on your 1099s and W-2s for some of this, but what about the people or places who paid you and won't be sending you a form that totals it up for you? Spreadsheet nation, that's what. Etsy sales, Paypal transfers, checks, cash, it all goes in here. Then you know what you're working with come tax time (and you can get a better idea of your monthly income throughout the year, as well!). 3. Pick a day to do your taxes and block it out on your calendar. [Don't wait until April to do this--do it earlier!] I like to schedule this and get 'er done as soon as possible--preferably early in the season, around February or so. This allows time to figure out any in congruencies, or, if you get hit with a big tax bill (which has happened to me before, and can happen to solopreneurs, sadly...), gives you time to budget for that payment. Scheduling a day when you focus on your taxes is a way to get over this big hurdle and get on with your life in the new year! It feels great. 4. Use TurboTax to make doing your taxes MUCH easier (+ free!). TurboTax is where it's at. For the first time ever, Americans can file both their federal 1040A or 1040EZ returns, as well as their state returns, for absolutely $0 with TurboTax Federal Free Edition. Yep, you pay nothing. Zero. $0 fed. $0 state. $0 to file. Pretty great, huh? iIn addition to not paying for super-easy state and federal prep, they don't charge you for any of these features:
I know it seems crazy that they're giving this away for free, but here's what they have to say about that: There's really no catch. We're investing in you, by giving you the power to do your own taxes and take control of your finances. We're here to help—now, and in the future. So, down the road, if you have a baby, buy a house, or make investments, you'll be real comfortable doing your own taxes. We hope you'll choose one of our reasonably priced products like Deluxe or Premier to help you get your taxes done right and your maximum refund. No brainer, if you ask me... I hope these four simple, straightforward tips make your tax season a little more relaxing than it might have been otherwise...or at least help you plan to make next year's taxes your easiest yet! ;) Top image via Death to the Stock Photo. I was selected for this opportunity as a member of Clever Girls and the content and opinions expressed here are all my own. 3/6/2015 02:20:07 pm
Thanks for sharing your knowledge with us, I liked your article. Your tips are quite good and helpful to business owners. Comments are closed.
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HELLO!I'm Mary Catherine, a Cape Cod-based yoga teacher, painter, designer, writer, mom, and list-maker extraordinaire. My goal is to inspire you to start living a more creative, simple, joyful, + purposeful life.
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