March 17, 2016
Thinking about your taxes year round makes everything better. As creative business owners, I know this is one of the things we try to avoid as much as possible. Prepping, scheduling quarterly payments, getting everything ready for your business seems like a ton of work. But if you put it all off until that one time of the year (right now), you create way more work and more stress for yourself. Taking small steps year round will help make your tax season a breeze.
1. Have a separate business account from your personal and make all your business purchases with that account.
This makes it so easy to track income and expenses. Everything is one place! Then at the end of the year, you can turn in your statements to your accountant.
2. Save all your receipts!
This should be a no-brainer but there are still some people who do not do this. Saving receipts will save yourself in the end if you ever get audited.
3. Have a system for filing your receipts and file them right away.
Instead of throwing all those receipts you saved into one shoe-box then dealing with it later, organize your receipts right away. For me, I keep folders for each month and safely store my receipts in the appropriate month. I do this right away so I’m not stressed with the daunting task of organizing them later.
4. Keep track of your mileage.
Like I talked about in Monday’s post, if you drive for work you can deduct your mileage. This is incredibly important to monitor year round because it can save you so much money!
5. Run a quarterly tax check up.
Around half-way through the year, I’ll check the progress I have made so far with prepping for my taxes. I’ll see where I’m at with my mileage, make sure my receipts are all accounted for, and go through my purchases on Mint.com to make sure everything looks right. You never want any surprises so checking up and staying on top of your prep is worth it!
6. Know the filing dates for everything and learn if you need to be paying taxes quarterly.
Obviously we know the deadline to file our taxes is April 15th but make sure you know all the dates for everything tax-related, like when sales tax is due. Additionally, if you need to pay your taxes quarterly (like me), knowing what dates your payment is due by is extremely important.
7. Review any life changes from last year.
Did you get married? Did you have a child? There are several life changes that can affect your tax status. You might go from being a single taxpayer last year to a married couple who files jointly. There are also lots of tax deductions and tax credits you can claim for life changes.
8. Figure out what forms you will need to complete your taxes.
Have a student loan? Own a house? Talk with your accountant about what documents you need to have ready when filing your taxes. You can also find that information on the IRS’s website.
9. Once you receive all your forms, set up a time with your accountant.
Appointments fill up fast so I always try to get in sooner rather than later. Since I prepare all year and keep everything organized, I know that as soon as I receive my remaining forms I can set up a time right away. This allows me to get my taxes done sooner and get back to my life.
10. If you pay quarterly, create a savings account to have enough for each payment. And set a reminder to pay!
I could do a whole series on quarterly tax payments (maybe in the future.) The last thing you want is to do is pay late or forget to pay. I created a separate business savings account where a portion of my income goes into right away. This way, I’m always staying on top of my tax payments and I never have to worry about not having enough.
BONUS TIP – Don’t stress it! With help from bookkeepers and accountants, they will make sure you are doing everything you are suppose to do. It’s just up to you to follow through. With these tips you’ll be able to easily sail through tax season.
Check out the rest of Tax Week by Shaunae Teske Photography:
My Mileage Tracking Secret!
How I Organized My Financial Transactions
Never Be Afraid to Ask for Help!
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