I'm Val! Coach for creatives like you who are ready to be healthier, happier and more empowered women who love the business you run, the people you serve and the life you live!
I think one of the least understood parts of running a business is taxes. Not only is it SO confusing (and I’d argue unnecessarily so! c’mon government!), but it’s also emotionally draining to see SO MUCH of your hard earned money fly away every year! Oh, what we could have done with all that money, right?
Well, lucky for us, there are people out there who nerd out over these things and offer the incredible service of TAKING IT OFF OUR HANDS! Enter Steadfast Bookkeeping…bookkeepers for the entrepreneur who has much more on their mind than taxes and accounting!
Meet Stephanie Thacker, the founder of Steadfast Bookkeeping and accountant extraordinaire! She’s dropping 5 tips for us today that we can get started on NOW! After all, it’s never too late in the year to get your finances in order! Oh, and don’t forget to follow Steadfast over on the gram!
Tax time is intimidating for a lot of small business owners, and for a good reason. Tax laws change all the time. It’s hard to know for sure what you can and can’t deduct and if you haven’t kept up with your bookkeeping, then it’s even more stressful because you now have a lot of catch up to do. Below are a few tax tips for your creative business that should help with all of that tax time stress.
1) Tax Deductible Expenses
Some common expenses you should be tracking throughout the year and are 100% deductible are: Advertising and Marketing, Travel, Payment Processing Fees, Contractor Payments, Legal and Professional Fees, Office Supplies and Software Subscriptions. These expenses must be directly related to your business operations in order to be expensed but just remember that anything you do that is necessary to run your business is likely a legitimate tax deductible expense.
2) Be careful with your Meals
While business meals are a tax deductible expense, you’ll notice I didn’t list them above. In most cases, meals are only 50% deductible so you’ll need to keep track of the reason you had that meal. A lot of things changed in 2018 regarding meal expenses and I’ve outlined exactly what you can and can’t expense in this blog post.
3) Home Office Expenses
If you are operating a business out of your home and utilizing a space that is being used strictly for your office/studio, etc. you can deduct this on your taxes. These expenses will not be a part of your business bookkeeping though. You’ll want to keep track of your monthly rent/mortgage, utilities, maintenance and repairs separately so you have a total amount at the end of the year. Then, you can deduct those expenses based on the percentage of space you utilize in your home for your business.
4) Pay Estimated Taxes
As a small business owner you’ll need to keep up with estimated tax payments throughout the year so you don’t get hit with a big tax bill once tax season rolls around. It’s best to work with a CPA who can guide you on the payments you should be making. By paying taxes throughout the year, it’s less of a financial burden and you’re staying in compliance with IRS regulations.
5) Keep up with the Bookkeeping
One of the biggest things we hear is that business owners are scared to file their taxes because they feel like they don’t have good enough books to really report what happened the past year. This can be easily solved by implementing a good bookkeeping system. Whether you commit to doing this on your own or outsource it to someone else, be sure that it’s done on an ongoing basis so you don’t ever have to go back and try to remember what you bought at Target 9 months ago or who gave you that $600 check you deposited 11 months ago.
Taxes are a necessary part of your business but they don’t have to be the thing that keeps you up at night. With good books, accurate expense deductions and estimated payments being made you’ll be on the right track to a stress-free tax season.
I'm Val! Coach for creatives like you who are ready to be healthier, happier and more empowered women who love the business you run, the people you serve and the life you live!
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