• Small Biz 101: 10 Things I Learned From My Accountant While Filing My Taxes {That You Should, Too}

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    There are no guarantees in life except for death and taxes. Mehhhhh. It’s kind of the truth, even though I don’t want to admit it. Since Tax Season is in full swing, I figured I’d share a little into tax 101, which has been quite the journey in the last few years {we’ll call it the journey to adulthood}.

    taxes

    This year I started working with Sara Laufer, who is a financial planner/CPA located in Hoboken. In a very short time, she has helped me {tremendously} sort out my life when it comes to my two small businesses and 9-5 job.

    Here are a few things we went over/I learned in my last few years of filing as a small business:

     

    1. Track your mileage.

    Sara recommends some awesome apps – and this is one of them. The app Trip Log is great to do this, so you can just turn it on before you start driving and then off once you arrive. It logs all your trips with date/time/location and once you put it in you never have to think about it again until it’s time to do you taxes. A great timesaver since this year I didn’t use it {til she told me about it!} and going forward I’ll be able to make it much easier on myself. According to Sara, you can deduct 57.5 cents per mile driven in 2015 for business purposes. It’s a much higher deduction than just the cost of gas unless you drive a gas-guzzler {a 100 mile business trip counts as a $57 deduction}. You need to have a log of your miles, though!

     

    2. Save your receipts.

    Throwing receipts away = GUILTY. It’s sooo annoying to have receipts lying around, so you can scan them and put them into your Evernote {see below}. There’s also a great app Sara mentioned which is called Cam Scanner; it basically allows you to create a pdf of an image so you can create a scanned copy from a photo. GENIUS. Plus, if you ever get audited {ughhh!} the IRS wants to see the actual receipts and not just the bank statements. Let’s hope that never happens!

     

    3. Use Evernote.

    Even though I’d downloaded it before, Sara told me about all of the capabilities of Evernote which are actually insane. Receipt scanning, document hosting, note taking, organizational tools that are amazing. READ: 20 Tips Every Evernote User Must Know

     

    4. Write down all of your meetings in a hand-written planner in addition to an online schedule.

    Always good to have a back-up copy, plus it’s a great visual tool to help you see how youre using your time. I love Erin Condren planners!

     

    5. Keep separate bank accounts for business.

    I finally did this last year {using PNC Business}, and it’s made my life SO much easier to easily break out what expenses are personal versus business. Since I have two small businesses, it is life-changing to be able to break it down into three different spots. Plus, you can apply for a credit and debit card for each business which is super helpful in organizing your expenses. NOTE: You must be a registered business with the state government in order to get a business bank account.

    6. Pay estimated taxes.

    If you are self-employed and you are making a profit, you need to pay the government throughout the year, not just on April 15th.  If you were a 9-5 employee, you pay the government with each paycheck, so it’s a similar situation, you just don’t have to worry about it because your employer handles it. As a small business owner, you should pay estimated taxes quarterly {4 times a year}. Sara has helped me with this which is GREAT and makes the end of the year way less stressful.

    7. Know what you can deduct!

    Each business spends money differently. When you are self-employed or have your own small business, you can take several deductions.  Computers, printers, cell phones, website hosting, domain names, home office, etc.  All have to be business related of course! Talk to your CPA about everything you are spending to ensure that you are capturing all of your deductions! You don’t want any money to slip through the cracks.

    8. Get an invoicing system if you need one.

    Quickbooks is great, and I also have used Freshbooks. I had Freshbooks for a while for sending invoices to client {it’s super user-friendly}, but the monthly fee is considerably higher than Quickbooks if you have lots of clients. Sara recommended to switching 100% to Quickbooks since she can also monitor it. She also got me a major discount since she is a CPA and is in the Quickbooks Accountant Network, which is clutch.

     

    9. Remember that bookkeeping is separate from accounting.

    This was news to me the first year I did my taxes. If your accountant is good, he or she will explain this to you…well. A lot of accountants, however, don’t take the time to break things down for you {which I think is SUPER important}. Bookkeeping is responsible for the recording of financial transactions. Accounting is responsible for interpreting, classifying, analyzing, reporting and summarizing financial data. These are separate people or they can be the same, but you need both.

    10. Hire a professional.

    Hiring someone for bookkeeping and accounting has been life-changing. I have worked with other accountants who were very good, but working with Sara has been wonderful because she covers accounting, as well as tax and business financial planning. She spent most of her career {before starting her own CPA business} in corporate finance/accounting jobs where she was responsible for budgeting, forecasting, economic strategy, and overall financial reporting {aka this makes her suuuuuper savvy when it comes to helping me manage my small businesses}.

    When Sara met with me, we sat down and went over everything taxes. And I mean EVERYTHING. From bank accounts to expenses to bookkeeping to tips on how to make the next fiscal year easier for me as a business owner, she was awesome. I really haven’t met with someone who has been so easy to talk to and work with, and who actually took the time to explain everything to me. We sat and went through every expense that she had printed from my bank accounts, and then determined how to classify it as well as if it was taxable/able to be written off or not. She showed me apps to make my life easier for next year, and gave me financial advice as well.

    I am so happy to have found a great person to help manage my business and personal finances who actually “gets” being a small business owner {and a woman!}. Her tax practice focuses on small businesses, entrepreneurs, and individuals/families – so she is able to help me with the various tax aspects of my life {including getting married and buying a house!}. Working with a CPA also has eased my mind as I know I’m staying compliant with all of the changing laws and legislations. Seriously though, who can keep up with all of that? It’s exhausting.

    Anyway, I digress… but, I guess the moral of the tax-paying story is that it’s inevitable — you must become an adult and do your taxes, especially if you own your own business. So take these tips in stride, but I guarantee that if you listen to at least a few of them, your life will be infinitely easier.

     

    What are your tips for tax season? Share below!

     

    *Please note, this post is not sponsored; these are real-life tips from me as a business owner and my experiences with my accountant. Email me [jennifer@hobokengirl.com] or my accountant Sara at sara@laufercpa.com {her website is www.lauferCPA.com}

     


    Written by:

    Jen is the founder and Editor-in-Chief of Hoboken Girl. She started the site to discover and share the wealth of things happening in Hudson County. Her roots in the area extend to her maternal grandparents, who owned two textile factories in Weehawken and North Bergen. When not planning the next Hoboken Girl event/volunteer project or editing her life away, she can usually be found shopping at local boutiques, eating an Insta-worthy meal, walking her French bulldog + rescue pup, or watching the latest murder doc on Netflix with her husband.


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