Those of you who are "self employed"

by doorkicker13

Posted: 13 years ago 15 replies

INTERNET MARKETING

I'm just curious about what methods you have in place to prepare yourselves for tax season if you are self employed? I just want to make sure I have all my t's crossed and i's dotted once I get the ball rolling (because failure is not an option, of course). Thanks in advance for ANY input!

#self employed

LindaC 13 years ago

My 2 cents to you is...make an appointment with a local CPA. They can answer your questions.
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- doorkicker13 13 years ago
  
  I plan to, when the time comes. I was just curious as to what are some of the practices those of you here who are self employed follow is all.
  
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  ksmusselman 13 years ago
  
  If you're just starting out, simply estimate what you might earn and set aside whatever percentage of that you think you'll have to pay in and put that money in a separate savings account during the year.
  
  As a sole proprietor, you're not required to pay taxes quarterly and in some cases it's difficult to know how much revenue you may earn during the year. But if you have some portion of it set aside in a special savings account, then you're in a better position than facing a huge tax bill in April.
  
  If you're single, no dependents and file EZ, you may not need an accountant right away. I was self employed for several years without an accountant because my business was very part time. I was single and still working FT and rarely had to pay in any taxes anyway.
  
  But as you start earning any type of substantial income, definitely do just as LindaC said - get an accountant. I've been self employed now for several years now and the best thing I did was ... got an accountant.
  
  Your accountant can assess your estimated tax obligations more realistically and set you up with a quarterly payment plan so you can pay estimated taxes on a quarterly basis so you're prepared ahead of time.
  
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  AgentHomes 13 years ago
  
  I'm old school I use the shoebox method.
  
  All year I just toss my receipts and copies of any other documents I have into a school box which I keep near my workstation (hint Computer). When tax season rolls around I just drop the shoe box off with my accountant.
  
  It probably costs me a few more dollars with the accountant to do it this way. But in the past I've found it to be too much of a pain to sort the receipts myself. So it's worth the extra money to me.
  
  The real pain comes when the accountant gets back to me and tells me how much I owe. Thank you line of credit.
  
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  Dave Rodman Banned 13 years ago
  
  If you're just going to be a sole-prop and file a schedule C, it's not that difficult. You just need to keep track of revenue/expenses. If you want to make things easy, get a separate bank account/credit card and only use it for the business. And set aside the taxes you'll need for the end of the year. In the case of a sole-prop, you'll pay income taxes and self-employment taxes on your profits.
  
  Once you go the corporation route, get a CPA to handle everything for you. Not only will they make sure you're doing it right, but they draw from a vast amount of experience. Most people are afraid of the IRS so they don't take the deductions they are entitled to. A CPA can give you confidence that what you're doing is right and let you get more aggressive.
  
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  angeliat1 13 years ago
  
  Yes, taxes are a pain. A CPA can really make your life easier, but it can be done without one if you are willing to put forth the effort. Just be sure to prepare for sanity breaks!
  
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nicholasb 13 years ago

here's what I do, I basically print out every receipt for any business related purchase.

I also buy any business related thing online so I have a nice printed out receipt. Then I just print out a paper with however much I made that month, paypal, clickbank and so on. All with physical screenshots. then add them up

if I do buy something that requires a traditional receipt, I scan it on a piece of paper.

then I put the screenshots of total income added up and circled in red. in one of the big yellow envelopes.

then I do the same with the receipts. I label one income, and the other one expenses.

then I put both of them in a bigger yellow envelope label it with the current month and year. so If I did this for 12 months I would have 12 folders jan-dec

then when it's tax time I take all that to an accountant.
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danemorgan 13 years ago

What i did was get married...
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- doorkicker13 13 years ago
  
  Thanks for all the replies everyone, some helpful info here.
  
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- ksmusselman 13 years ago
  
  Originally Posted by danemorgan
  
  What i did was get married...
  
  Where's that ROFLMAO smiley when you need it!! ROFLMAO
  
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- Point Blank 13 years ago
  
  Originally Posted by danemorgan
  
  What i did was get married...
  
  Your my hero.. Lmao
  
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- onSubie 13 years ago
  
  Originally Posted by danemorgan
  
  What i did was get married...
  
  OMG seriously funny! I think you have successfully hijacked the thread and answered the OP's question all at once!
  
  Mahlon
  
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  brik2500 13 years ago
  
  Personally, I hate tax season! LOL,
  
  no, but as a self employed person, if you are a corp.
  
  such as an LLC, you file a K-1 for your biz.
  
  Then when doing personal taxes, you use the expenses
  
  and revenue for your personal taxes...
  
  Best thing to do is obviously talk to a CPA...
  
  Hopefully that makes sense though.
  
  BEST
  
  Brik
  
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Rezbi 13 years ago

Be hopeful. Seriously, that's how I am.

It always works out for me.
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wkathome 13 years ago

I use Quick Books. At the end of the year, go to the Profit/Loss statement and click print is all. Makes things a lot easier than a floor covered with papers.
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