The quick guide to taxes for makers will tell you everything you need to know. When makers start their own businesses, they get to benefit from being their own bosses. They get to set their own schedules. They get to be creative while they create their work. But, there is one challenge: taxes. As a business owner, it is helpful to get tax advice from a professional, but it is also helpful to know the laws yourself.
Use Tax Preparation Experts
Small businesses owners often turn to tax preparation programs like QuickBooks, especially the version designed for people who are self-employed. With this program, you can learn all of the necessary information that small business owners need to pay their taxes at all government levels. You can also learn about expenses and how to collect sales tax. QuickBooks simplifies the process for self-employed professionals who are not financial experts.
Learn Business Tax Basics
When you start your business, there are steps that you should take. A tax professional can help you with many of the steps. If you are making money with your art, you will need to get a taxpayer ID and learn about the taxes that you will be required to pay. It is also important to learn when to pay and where to send the taxes. After you set up your business and learn basics about paying taxes, it is also important to know some basics about tax forms. One of the most common forms that self-employed makers use is a 1099-K, which will come from ArtisanBorn and companies (like PayPal) that process payments. You will need some other tax forms, like a Schedule C and a 1040, as well as some specific forms based on your state and local government. Don’t forget to investigate what you need for sales tax when you are setting everything up.
Keep a Complete Record of Your Expenses
Tax rules are constantly changing, but one thing that smart business owners do is keep a complete record of their expenses. This helps tax preparers complete forms and advise clients with accuracy. And, if you are filling out your own tax forms on QuickBooks or a similar app, you will have an easier time filing your forms. Keep track of expenses relating to:
Office, listing, and advertising expenses
Packing and shipping expenses
Pay for employees
Insurance and retirement expenses
Expenses related to entertainment and travel
Expenses related to supplies
While you are keeping track of expenses, keep all of your statements and receipts. When you are in doubt about whether or not to track an expense, it is better to track it rather than not.
Stay Organized to Make Tax Prep Easy
With good preparation and organization, you can make your tax preparation go smoothly. One way to help yourself is to schedule time each week to focus on organizing your expenses and tracking them in a spreadsheet or in QuickBooks. Small business owners often have one credit or debit card that they use for business expenses, simply because it gives them one place to find those expenses. They also keep their paperwork, like receipts, in one spot, so it is easy to find if there are any questions during tax preparation. If you have questions about these procedures, it is helpful to speak to a tax professional, since tax rules change frequently. If you have any tax tips for small business owners, please share them with us by leaving a comment!