Ep 11 ~ Get your year-end business finances in order

A lot of people have left their job to start a new business this year, if that's you here are a few things to do to have "all your ducks in a row" so that you're not scrambling come tax time, which can also save you money.

Talking about taxes and bookkeeping can be intense and deep, so this show is focused on self-employed folks that are either registered with the state as an LLC or not registered at all, and don't have a business partner.

1. Use a system to track your business income and expenses
I would recommend using an online system like Quick Books Online, or some other tool. I personally use Quick Books Online and that's the one I'm most comfortable with, but there are a lot of great ones out there. 

Why use an online version? Because you're more likely to get updates and upgraded features that can make the bookkeeping process easier.

2. What expense categories should you use?  
A good starting point is to match the expenses to what's listed on the Schedule C tax form.

3.  Do you need to issue 1099s?
Did you pay $600 or more for services?  This includes people who have an LLC and partnerships (excluding S- or C-Corporations) and is paid from your bank account, not a credit card (the credit card company will issue a 1099 if needed). 

You'll need to give them their 1099 by February 1st and submit it to the IRS by March 1st.

4.  Do you use your personal car for work?
I'm going to highly recommend you use an app that tracks miles, but if you haven't done that this year then look at your calendar and add the miles for the places you've gone to related to your business.  Don't forget to add up the expenses for vehicle maintenance.

5.  Did you use a part of your home for business?
There are two ways to calculate this:  Simplified Option or Regular Method.  The Simplified Option takes the square foot of the dedicated office space x a rate that's given by the IRS to calculate the expense amount.  Regular Method is tracking each allowable deductible expense separately.


Schedule C tax form (https://www.irs.gov/pub/irs-pdf/f1040sc.pdf)


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