“There are four simple steps you can take to make tax time easier on the nerves – and on your wallet…”“There are four simple steps you can take to make tax time easier on the nerves – and on your wallet…”
1. Hire an Accountant and check
all information I give you here with them first!
2. Keep track of your income:
Get a large sheet of graph paper
Label the sheet ‘Income’
On your income sheet write the
names of the companies that send you checks across the top and the
numbers 1-52 down the sides. (if you receive personal checks or money
order create one column for these)
Whenever you receive a check find
the number that matches the week of the year on the left and the company
the check is from on the top- write in the check amount.
Keep track of your income from your
websites or online business on this graph paper. At the end of the year you
can add columns and rows to make sure they match, double check figures with
any w2’s you receive, and have your total income very quickly.
*Save all check stubs*
3. Keep track of and itemizing deductible expenses
You can itemize business expenses on Schedule C (form 1040) of your federal tax return. Items which you purchase that are essential to your business (ie: computers, hardware, software, content, website design, advertising, domain registration, hosting, etc.) may be tax
deductible, and should be categorized into the following categories:
Advertising
Bad Debts (refunds issued, 3rd
party billing companies that never pay, etc.)
Car and Truck expenses (probably
does not apply to you) d. Commissions and Fees (merchant fees, commissions
paid after the fact)
Depreciation (some large purchases
are not deducted all at once, but depreciated over a period of a few
years)
Employee Benefits (probably does
not apply to you)
Insurance
Legal and professional services
(hosting, ISP’s, accountants, attorneys, etc.)
Office Expense (shipping products,
zip disks, floppies, pens, etc.)
Repairs and Maintenance
Supplies (supplies other than
office stuff- content, costumes for models, etc.)
* There are more categories, but they probably do not apply to you*
You can keep track of and categorize your expenses each week or each month on a second sheet of graph paper. Write in
your categories across the top and the week numbers or months along the sides.
Keep all receipts for any purchases you plan to itemize on this form.
At the end of the year you can copy your totals for each column onto Schedule C and save your accountant time (which saves you money).
4. Filling out your forms
If you have kept track of your income and expenses in the above way you can fill out most of your tax form yourself, then take the rest to an accountant. Accountants usually charge by the hour, and filling out most of the form yourself will save them time and you money.
Check with an accountant in your area, most of them have booklets that walk you through doing most of your taxes yourself. You just answer the questions or write in the numbers, bring it to them when you are done, and they fill in the actual tax form for you.
Reader Comments on this Article:
Comment by:Summary:
StephenUgh!
ElectraExcellent
spankerBad debts
SharonGet real!!!!
