I’ve been an independent contractor for over two years. I pay my own taxes, keep track of my deductions and know what’s in the bank. Although I’ve met up with several clients who do the same, I do occasionally come across people who don’t.
Here are some tips for changing all that.
Every time you make a purchase for your business, collect the receipts and scan them into your desktop or google drive. Or like me print out a paper copy.
Keep a spreadsheet of all the purchases. You will need the Date, amount and description.
At the beginning of the month, put all those receipts in an Income/Expense sheet (I can show you how) An Income/Expense sheet shows how much money is coming in and how much money is going out.
Second input all the money coming in. Client payments, eCommerce payments too. Those go on the Profit side.
Know your tax deductions “options” like square footage of your home office, cell phone bill, internet, and office supplies. You can look up what is considered a deduction on the IRS website or have the person who files your taxes tell you ahead of time.
If you keep track of your spending on a monthly basis, you will not scramble come April. Call or text me if you need help. I am a Virtual Assistant and can show you how.