Tools for Your Tuesday: Make Your Taxes Support Your Craft
I know, I know……. Taxes suck and can be overwhelming to deal with. In the past few years I decided to try and “adult”, take on the challenge, annndd…..hire somebody to do my taxes lol. It was one of the best moves I every made because luckily it was a friend (A certified accountant) who really took the time to break things down.
It’s important to note that I in no way am providing tax advice or pose as a tax certified professional, but wanted to share some basics that have helped me make my tax dollars better support Dxtr Spits & ONLi Packs. (Pro Tip: Many tax accountants will accept payment after you receive your return).
Here are 3 Things I Learned to Make My Taxes Support My Craft
Keep in mind, you might already operate as a sole proprietor/business, might as well make the best of it
Learn what your expenses are (what you can write off), ESPECIALLY with regards to your Craft.
The most magical little helper for the sole proprietor or single member LLC is the Schedule C form (1040 profit or loss for business). This form allows you to capture all the profits and expenses you have invested into your business (There are also ways to do this for your hobbies). Expense wise, that often means you can write off things you use for your business including; place of residence(Rent!), cell phone, suppliers, meals and entertainment, etc. It might be counter-intuitive but this can be a great thing for an individual / small business if your company is not profitable just yet. You can receive a bigger return because of it which can then act as more cash to put back into your business or your life.
Keep track of your expenses, EVERY dollar counts
Not gon lie, I HATE bookkeeping HOWEVER, I have grown an appreciation for doing so. Firstly, it makes sure everything you file is accurate between your business and the IRS. Secondly, it makes sure that you can keep track of your spending and profits. It is tedious but it may help you to figure out where you can improve to save more cash and/or what is worth paying for.
File on time and keep your records.
Y'all…..penalties and audits are real. I know it’s a cringe worthy experience to think that you have to cough up your cash to the IRS, but trust they are easier to work with when they aren’t after you! I have only had to pay a late penalty ounce or twice when getting the hang of paying quarterly taxes. (Yes I pay quarterly taxes for ONLi Packs -__-) I haven’t had an audit luckily, but can provide some insight from an accountant friend.
The best thing to do is to keep your records, and if you do get in hot water with the IRS, be honest (within reason lol) and square up with them (They have payment plans and such). And yes, you should file, even if you haven’t filed in years. To be clear, I don’t feel a strong moral obligation to pay the IRS, but the reality is, they won’t give up pursuing you…..and after a while…it can become……taxing :)
More resources for you craft
I’m not an expert, but I know a thing or two……