March 26, 2013

5 Tax Tips for First-Time Self-Employed Filers

This guest post is brought to you by, the alternative to Mint for business. Sign up today for a less taxing tax time!

You get into selling your handmade goods for various reasons – love of selling, love talking to like-minded people, love of great products. But how many small business owners start a company because they love figuring out taxes? Probably not many, and this fear of number crunching can lead to some scary times when April draws near.

If this is your first year in the business, the whole deal can be overwhelming. Make sure to follow the following tips to help take your mind off taxes and onto bigger and better things!

1. Get Organized

If you don’t follow anything else on this blog post, follow this tip. Getting your finances organized is absolutely crucial to staying on top of your taxes. If you don’t get organized you’ll constantly be scrambling around trying to find this form or that invoice.

Prof Tip: Instead of worrying about keeping your paperwork – receipts, invoices, miscellanea – in boxes or folders, digitize everything and store it on your computer. This is much less messy and can also help you recall papers you need quickly.

2. Start a Calendar

Part of getting and staying organized is knowing when specific events are coming up in your tax life. The last thing you want is to be surprised by a late payment notice or totally forgetting April 15th is coming up. Mark everything down on your calendar, including quarterly estimated taxes, form deadlines, and when sales tax is due. Never be surprised again.

3. Auditing Happens

Sometimes the IRS or other government agency doesn’t quite believe what you’ve marked down on your tax forms. This doesn’t necessarily mean you’re going to go to jail for the rest of your life; it just means you need to prove what you say.

So it’s best not to panic. If you do, you’re more likely to make a mistake. Just go find all the stuff you need to prove your case (see why organization is so important?) and put it together so the IRS backs off.

4. Start Early

After you’ve marked everything down on your calendar you have no excuse to miss a deadline. You also have no excuse to not start as early as possible. While you may not want to start your tax forms on the first day you get them, there’s no reason to wait until April 14th at 11:59 PM. Bite the bullet and sit down with everything at least a few weeks in advance. The sooner you’re done the better you’ll feel. Plus, you can then go back to running your business.

5. Stay Educated

Since you’re reading this blog it’s evident you’re interested in doing things in your business correctly. However, one thing to remember about taxes is that they change all the time. If you stop reading about changes that have occurred you’re bound to miss something important.

Keep a regular list of tax blogs and other material to find out what’s going on in the small business tax world. This way when a big change comes to a tax form you’re not freaking out – you’re already prepared for it!

Do you have questions on just what exactly you need to do on your taxes this year? Check out Outright’s Online Sellers' Tax Guide for a detailed rundown on everything you have to do as a self-employed tax filer. If you have questions after that, hop on over to the Outright Community where tax and finance pros regularly stop in to answer your questions!

No comments: