Overview First things first: I'm not a tax professional, and there is no substitute for paying a professional to prepare your taxes for you. In this module, I simply want to share a few tips + tools to save you time + money next April. Expense Tracking Just to be absolutely sure we're on the same page: Money spent on your business can and should be written off on your taxes. Essentially, whatever you spent gets subtracted from your total taxable income. You'll save yourself a lot of heartache if you track your expenses throughout the year, rather than recalling or tallying them up at the end. In order to do so, I've created a sample expense tracker tool with dropdown categories that map directly into TurboTax. At tax time, this will allow you to seamlessly transfer your final numbers. How to get started: Make your free Airtable account. Open the template. In the upper right corner, click 'Copy base'. Delete any of my sample data, and commit to entering your expenses throughout the year. We'll use Airtable for some additional record keeping in a later modules as well. Items to Note Below you'll find a few things that you may not know (props if you do!), but should keep in mind as you prepare your taxes. Laws vary by state, so be sure to only use this only as a guideline in doing your own research. (And remember that time I said I was not a tax professional? Still true). Home OfficeIf you have a space in your home dedicated to your business, you can deduct a portion of your mortgage / rent, utilities, and home insurance for your home office. You can find BIG tax savings here. Learn more. Charitable ExpensesIf part of your business includes a giveback component, note that you will NOT enter these contributions in your business expenses, but rather include them in the personal portion of your tax return. SEP IRAConsider setting aside a portion of your income. A SEP IRA is a type of traditional IRA for self-employed individuals or small business owners. (SEP stands for Simplified Employee Pension.) Any business owner with one or more employees, or anyone with freelance income, can open a SEP IRA. Learn more. Revenue At the end of the year, you can pull your revenue number from your Etsy Direct Sales Report. Be sure to also include revenue from any craft shows, and other payment systems, such as PayPal.
