It’s that time of the year again! I’m in the middle of organizing my taxes to be turned in to my CPA and thought I would share some tips I use to get me through this season. Whether you work with a different type of business or you are a photographer yourself, I hope you can walk away with something to try. 🙂
Day-to-day living, I collect every business receipt for any expense I make. Whether it is online or tangible sales, I make sure to have proof of that expense so I can file it month to month. This is where my handy binders come in! I have a shelf in my office of organized binders broken down by year. They say as a business owner you should keep receipts for seven years before discarding them. So seven years, seven binders it is! Every binder, I have twelve folder dividers separating from month to month where I can stash my receipts. This is not where I do my categorizing. This is just proof of my purchases for those just in case moments.
Another day-to-day reporting I do is mileage. This is definitely important if you want to not owe so much to the government. Mileage is a great deduction so you may as well take advantage of it! 🙂 Every time I get into my car, I get out my IPhone, go to my Notes where I have a mileage report and log in the purpose of the trip (ex. Brian and Stacy Engagement) as well as my starting out mileage. Once I return home, I log in my ending mileage. Ideally, I would love to figure out the math once I get back home … or simply restart my mileage counter on my car when I first get in so I can see the total miles I drove without doing the math, but I forget since I’m usually on a mission to go somewhere. Haha! That is totally okay because I know I will take care of this soon. 🙂
I’ll tell you right now that I have tried using book keeping software and I’m not a fan of it. Although, I’m sure in the next five years that might change … but for where I am right now, I absolutely LOVE using Mint! I have been using Mint.com for now four years and it has been such a blessing for my business and personal life! First of all, it is FREE! Secondly, the website automatically downloads every transaction in every account I have so I can view everything in one place. Thirdly, you are able to categorize every transaction so you aren’t having to sit on the ground and categorize receipts! Yes please!!!! At the end of the year I just have to export the transactions by category from the year in an excel file and total up how much I spend in each category to hopefully get the maximum deductions possible. I just turn in this overall report to my CPA as well as my total mileage.
Katelyn shared at the Pursuit 31 Conference to create your own list of “monthly to dos”. I loved it so much that I made it a part of my monthly routine! The first Monday of every month, I will sit down and cross off my “monthly to dos”.
Monthly To Dos:
*Logging in mileage. I just simply export my mileage report from my IPhone via email and log it into my Google Docs mileage report so everything is safe and sound. Since I don’t figure out the exact number of how many miles I travel from my day-to-day life, I sit down and quickly calculate how many miles I did for each trip from that previous month since I already logged in the starting and ending mileage. Easy! The end of the year, I turn in my final mileage count for the year! Wha-la!
*Balance Checkbook. I log into Mint.com and make sure all of my transactions are properly in place. I have noticed a little glitch a few years ago where it was duplicating some of my transactions. We don’t need mistakes like that! It’s great to look back at just the previous month’s finances so it is more manageable and fresh instead of doing it at the end of the year. It’s just overwhelming … believe me!
*Pay Sales Tax. This is super important depending on your state because some states don’t require sales tax for photographers. Unfortunately, I live in a state that does require it. I don’t allow it to be a hassle for my business, so I just simply log in and pay the taxes from month to month to make sure I’m running properly and legally.
*Email next month’s brides regarding final meeting. I like touching base with my brides and making sure everything is all set and ready to go for their wedding. 🙂
*Package 2 month gift before wedding to be shipped. I make sure to take the time to put together gifts for any of my brides who are getting married in two months so they can enjoy it before the wedding rush arrives!
*Backup Photos. I make sure everything is backed up online. I do this periodically anyways, but this is also a nice kick in the butt during the “slow winter season”.
Why do monthly to dos? It is SO much better than sitting down and doing all of your mileage/finances once a year. I did that my first year and even though it wasn’t a super crazy year compared to my mileage/finances now, it was awful! Made me not look forward to tax season. However, things are a LOT different now and I have a system that works for me. Although, these tips may not work for you. I still hope you are able to find something useful out of todays posting. 🙂
Another quick note … if you contract any work (like for my line of work, hiring second shooters for weddings), you will need to fill out 1099 for those you paid over $600. I have to list off my second shooters info and how much I paid them over the year because they will have to be taxes on that income for proper filing. Just a quick note! My CPA sends me a form to fill out so I’m taken care of in a timely manner.
Last tip of today … pay quarterly taxes! I didn’t do this my first REAL year of business and I definitely paid for it … Not sure why I didn’t get on the bandwagon from the start of my business, but paying quarterly is going to save me from this past year. Keep in mind with quarterly taxes, they take your numbers from the year prior and divide it up quarterly so you aren’t paying a huge amount all at once. Finances change from year to year so your estimated quarterly taxes could end up with you still owing at the end of the year … or even better, the government may owe YOU! It’s just a better system to pay throughout the year because I ended up with a $15,000 bill this time last year because I didn’t pay quarterly. That’s NOT going to happen again!
I hope you are able to take something out of this blog post today. 🙂 Let me know if you have any questions at all! I would love to answer them for you!
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