Self-employed or side hustle!
Going full time into entrepreneurship can be exciting! As a small business owner, I know full well the importance of having to keep good records. Keep in mind a business owner does not have to have an LLC to be in business, though it’s recommended to place some separation from the owner’s personal assets and the business debts in the event of lawsuits against the business. At the beginning of your start up, you may not be able to hire a bookkeeper so here are some tips to help make it a little easier to stay compliant and ready for tax season. Your accountant or tax preparer (hopefully us) will love you for it. These nuggets will help you whether you are exclusively self-employed or have a part time gig.
Don't mix the personal and business transactions:
Always keep business and personal transactions separate! It will save you time and money. If you cannot get a business checking account now, use a separate personal bank account or credit card to track all your expenses. Take pictures of your receipts in case of an audit. I always chose the email option when presented with the option of printed or emailed receipt. You can create a short gmail email just for receipts to keep them seperate. Bank statements are not always sufficient to prove business transactions. Receipt scanner apps are also available, just search your google play store or app store. There are also scanners available on Amazon for less than $100 bucks.
Mileage:
If you are using your vehicle for work keep track of mileage. If you must purchase supplies, meet clients, check your mailbox, any business-related miles qualify. Commuting miles do not count. Only from the place of business and traveling between work locations, visiting clients etc. At the beginning of the year write down your vehicle's mileage and at the end of year as well. Keep track of all business miles on a vehicle log or download a mileage app. We do not endorse any of these apps but here are some to choose from: MileIQ, QuickBooks and Xero.
Track a trip:
To track a trip and calculate mileage, indicate vehicle used, the date, starting location, ending location, start and ending time and the purpose of the meeting or trip.
Meals: (entertainment is not deductible)
To deduct business related meals, it must be a business engagement. Each receipt must show the date, place, the cost of expense, the people and the nature of the meeting (proposal etc.) You must also pay for the meals of the attendees, not just your own. On the back of the receipt write down additional information that is not on the receipt in case of an audit. Receipts are required for all expenses of $75 or more.
Ready to schedule a consultation:
If you would like to know more about how Gifted and Talented can help with your business needs or if you are thinking about starting a business give us a call at 214-931-6823 or schedule a consultation at https://scheduler.zoom.us/gifted-and-talented/strategy-meeting