Monday, February 23, 2015

Lesson Learned: Filing Taxes for a disorganized 2014

Thanks again to everyone that participated in my business's one year anniversary. You know, with that first year came another first: filing taxes on my income. To be honest, I didn't even think about it until right around New Years when my husband started asking questions and gathering documents. For all those months, I never once considered withholding anything or keeping very good track of what I was accomplishing. It felt more like an experiment then a career launch. I'm so grateful that it manifested into the business I have and the financial support I was able to give my family. But I wasn't taking it full-on-business-in-motion seriously until the last quarter of 2015.

The actual filing of my taxes was, to say the least, painful. Even after I asked some other friends who'd been freelancing and writing for longer then I had, I still felt a tremble in my spine at the prospect of properly entering all my info. We managed it (thank GOD for taxslayer), but I did have to pay a little bit back to Uncle Sam. Here are a few things I recommend for any start-up freelancers or hobby writers to do to make tax filing a little simpler. I will be doing all these things this year!

1.) Create a Simple Spreadsheet

After the digging in piles of receipts and bank statement searching, I thought my brain was going to explode. Before my 2014 taxes were filed, I had a swanky spreadsheet set up with Expenses and Income for each month. All the details are there including company/store, amount spent, date, and any notes.

2.) Open a Seperate Bank Account for Writing Income

This is about the only thing my business had going for it early on. We own a house and had opened a business account for our renters to deposit their monthly payment into. As soon as freelancing pay checks started flowing in, I directed them to that account. By keeping those funds separate, I saved myself a lot more searching for information.

3.) Get Files Organized

For years, I've kept bill files organized for my family. Why I didn't consider this with E.G. Moore Freelancing and Fiction is, literally, beyond me. But I've already cracked my file box into shape with its own section of hanging folder for my business. I have it organized to the max: receipts, odesk reports, business account statements, contest and anthology acceptance payments, and fiction.

With these three things, tax time would have been a lot less stressful. I'm still researching other ways to make next spring's round in the tax ring less painful. (If anyone knows freelancers can set percentages aside or pay taxes ahead, please comment or email me!) How was your tax season this year? What tips or tricks do you use to make it go smoothly?

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