It’s tax season right now! Us business owners are hard at work trying to get everything in line, working with our CPA’s, and getting everything in order. If this is your first tax season as a business owner, or your tenth, I know these tips will help make tax season go faster and smoother so you can go back to growing your dreams! Here are 5 ways to make tax season easier!
Before you read further, I wanted to let you know I have an entire guide all about being a second shooter, getting opportunities, and knowing what to do each step of the way! https://tarahelisephotography.com/shop
The first step is to make a plan, be a little more organized with how you’re going to be paying yourself, paying your business, saving for taxes and saving for personal. If you’re married, sit down this time of year and talk with your partner how you can best prepare, divide the income, etc. As an entrepreneur, your income can fluctuate, so the amount you’ll need to pay in taxes will vary each year. The amount can be shocking your first year (it was for me!), so setting yourself up for success throughout the year can make a huge difference come tax time.
If you’re a small business owner, you need to learn how to best organize your business expenses. Especially when it comes to taxes. I cannot stress enough to know how important it is to know what’s going on and be organized with everything.
Invest a few dollars (literally the Target dollar section!) and get yourself a 12-pocket accordion-file portfolio. Label each compartment by month- and throw receipts from every month into the appropriate pocket. Wherever you’re keeping your receipts, whether in your wallet, your purse, or in the center console of your car, make a point to file them at the end of the day, once a week, or once a month. It also helps come tax season to have them sorted by day, so take a few minutes at the end of every month to sort them in chronological order to match up with your statements.
Tax season is scary enough, so just knowing you have everything you need and have everything ready to go, will take a big weight off your shoulders.
I fit organizing my tax info into my routine that I already have in place. For example, I take 15 minutes every Friday to log my income, log my expenses, and classify my mileage. Look at your receipts from the week and log the information into your spreadsheet or your app that you’re using.. Do this little task once a week and it will save you so much time in the long run.
This also applies to your income. Rather than wait until tax time to come up with the money you need to pay in, think of your income in thirds. One-third of your income each “payday” goes straight into an account set up for your taxes. I use an app that takes it out automatically- It’s called Qapital. Put one-third of your income into your business account. And the last third is your payment to yourself.
I cannot recommend it enough- invest in a good CPA! It’s the smartest thing you can ever do for you and your business. They will do the work to help you save every dollar you earn and will be there to help if you ever have a problem.
When you first meet with them, take the time to get to know them, talk with them, make sure you mesh well and they’re a good fit for you and your business. A good CPA should get back to you in a timely manner, answer your calls, and answer your questions in ways you understand. Ask what they need from you, what their expectations are, and how their process works. Once they’re on board, work with your CPA to know what expense categories you’ll need to keep track of and what works best for them. Your CPA will appreciate this and tax season will go extra smooth!
This is one of my favorite apps. It’s my saving grace when it comes to easily tracking income, expenses and mileage. It does have a cost of $100/year and that sounds like a lot, but that’s nothing compared to the benefits it provides. The best feature is automatically tracking your mileage for you without you needing to even have the app open. You can also use it to take pictures of your receipts and easily classify purchases between personal and business if you don’t use a separate credit card for your business. At the end of the year, you can print out a report of your business miles and your CPA can figure out the best way to use that data to save you money.
I hope these tips will be really helpful for you! If you’re feeling weighed down by tax season, or feeling scared and uneducated, follow these simple tips and you’ll make things so much easier on yourself. Also, look for resources out there and educate yourself- YouTube videos are great! This isn’t a passion of mine, but I know it will allow me to grow my business and be a better business owner. Start your new routine today!