Since we are in tax season and I finished my taxes yesterday, I thought I would begin there.
TAX TIP ONE: online bookkeeping.
If you sell online or have a job with billable hours and/or need to produce estimates, I would recommend GoDaddy.com's online bookkeeping. It can pull all your sales transaction info from Ebay, Etsy, Amazon, as well as bank accounts, paypal, credit cards, etc. Then, it gives you a tally of your sales to purchases for each month and a running total of your profit or loss. I am not an accountant, nor do I even enjoy math. So, I like a program that does the work for me... including putting together the info for my schedule C. Below is a screen shot that give your the overview of the info they can provide for your account.
The fact that I have to occasionally go in and categorize expenses is minimal compared to doing all the data entry. I'm too busy creating, meeting, buying, packaging and selling to also do data entry. I also love that it will create my invoices and email them! There are probably other bookkeeping sites and programs that do this as well, but I like only paying $100 annually and not having to store the info on my computer.
However, I am not totally against doing some math and a spread sheet, because I do like statistic. So, when I first starting my antique business, I decided to create a spread sheet with the item and price I paid, as well as when I purchased it. It seem like it could provide some good statistics as well as allow me to see patterns in my sales, purchases, and trends. Which brings me to....
TAX TIP TWO: Record when and where you go to purchase your stuff!
I realized that though I have a good record of my trips to the post office, I had not recorded all the locations of all the sales I attended. So, I could not enter mileage for all the trip into my tax program, because my info was incomplete! Here is a look at my purchasing spreadsheet. You can see I enter, after I get home from the sales, who, when, where, what and how much. I was at first also tracking how much I spent each weekend, but I ditched doing that, because I didn't find it that helpful. But I did not lose the data, in case I changed my mind later.
I have now added the street names for each purchase on the master spreadsheet. I also have some little equations to give me running totals and random math that I think is a good idea at the time, but later not sure what the math is for. Yep. Not a mathematician, but I try.
Lastly,
TAX TIP THREE: Organized your sales taxes for each month.
One of my New Year's resolution's was to not have the "Oh no, I haven't done my sales tax this month!" panic that can wake me up in the night on the 15th of the month. This year I have streamlined the process with a big envelope for each month and in each big envelope is the paper work for sales tax, as well as the addressed and stamped envelopes. No more looking for papers, stamps, passwords, tiny books, etc. And, I do my taxes on the day I sent out bills dedicating one day to paperwork and though I might want to forget taxes, I will not forget to be paid. So, connecting the two allows me to remember to do all of it and only have 1/30th of the month in paperwork!
What are your tax tips or small business tips?
