Before I dive into my story, I want to start with an important note: please use a tax professional to manage your taxes! Now, onto the practicalities of entrepreneurship and tax season.
Tax season is likely one of the trickiest pieces of entrepreneurship. Not only is the tax process overwhelming and confusing, but it’s also something most of us love to procrastinate about, including me.
Of course, one of the simplest ways to destress regarding your taxes is to hire someone to do your bookkeeping all year long and have a tax professional submit your tax return.
A slight modification for that is to look after your bookkeeping yourself and bring in the tax pro when it’s time to submit those necessary tax returns. Either way, you still have to pay attention to the details and make sure you’ve got things done correctly.
I’ve personally struggled with this since becoming an entrepreneur. When you work for an employer, taxes are (typically) pretty straightforward.
In the first year of entrepreneurship, I was completely overwhelmed and was scrambling through the entire process. I’m a highly organized person, but I completely procrastinated about this one!
I learned, and year two was better, still scrambling, but better. Year three was much better for organizing the receipts, but I still was missing the piece of regularly tracking, so it still took a lot of effort to get the taxes done. This was also the year we had an excellent tax professional who changed everything for us.
She taught me more in that two hours than I’d learned in the previous three years. It helped me get my spreadsheet set up for success moving forward, so I knew our usual expense categories and put things together.
The following year meant that my receipts were more organized and had a much better handle on the tracking.
This year, our fifth year, I’ve made further progress by being even more organized. Most things are already tracked as I’m doing the final number crunching because, throughout the year, I allocated bookkeeping time instead of only doing it in April.
As I progress through 2021, I’m already tracking regularly and organizing my receipts as the year progresses. The next tax season will only take an hour (or maybe two) to put everything together and get those tax returns completed!
Even as highly organized as I am, and I do my best to maximize my efforts with as little effort as possible, I have my weaknesses like all of us.
The key lesson: each year, I made improvements and progress. This principle applies to anything we struggle with completing: writing your book, social media, exercise, anything, and everything.
Another critical lesson: I got help from an expert.
This expert gave me the tips I needed to make all the difference in how I got things done.
Part of what I do in my regular weekly tasks includes spending time on the books. Tracking income, expenses, making sure you’ve got your receipts organized; instead of making it this giant mountain to climb when it’s due, take those small steps regularly. These small steps will create a lovely, smooth path for you to walk with minimal effort casually.
Have you already finished your taxes, or are you working on them now?
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