Self-Employment Part 1:
Self-Employment Part 2:
Self-Employment Part 3:
Documents to bring (as discussed in the videos above):
In addition to your usual personal income tax documents, please add up each of the following categories for the year:
- Advertising – including digital ads, website hosting, business cars, etc.
- Auto miles – include business miles, total (all) miles, car year make/model
- Commission and Fees – Bank fees, credit card fees, commissions paid to others
- Contract Labor – your non-W2 employees
- Depreciation – large equipment purchases with useful life of over 1 year along with a cost greater than around $100
- Employee Benefit Programs – health insurance paid BY the owner FOR the employees
- Insurance – business equipment and liability insurance
- Interest – interest paid on a Business ONLY credit card and mortgage interest paid on a BUSINESS location/office
- Legal/Professional – legal fees and other professional services
- Meals – cost of meals while out of town overnight OR when dining with a client or employees (this is NOT your cost of lunch and dinner)
- Office Expenses – office supplies and postage
- Pension and profit sharing – costs of employee pension and amounts of shared profits
- Rent or Lease – the cost of renting/leasing business equipment or facilities (permanent like a building rental, or temporary like a festival space)
- Repairs and Maintenance – any repairs and/or maintenance
- Supplies – this is supplies that are neither “office supplies” nor materials to “build” products you sell. For example, network cables, shipping boxes and containers.
- Taxes and Licenses – taxes you paid (professional licenses, payroll taxes you pay for your employee, other taxes assessed by the federal or state governments for conducting business; NOT income or sales tax)
- Travel – cost of flights, lodging
- Utilities – cell phone, Internet Service. If you have a separate office building, include electricity, gas, and water. If you have a “home office”, then rarely will these expenses be better than the “new” (simplified) office-in-the-home deduction.
- Wages – wages paid to W2 employees; do NOT include money paid to yourself.
- Other expenses (best to list separately) – software subscriptions (such as Adobe, Dropbox, etc…), books and publications, continuing education
- Do not bring us your receipts unless specifically requested
Are you a brand new business?
Those who need to prepare a schedule C fall into two categories: First, those who went into business for themselves with the purpose of creating self-employed income. The other are those who did “side work” during the year and found themselves receiving a 1099-MISC form that they have no idea how to handle.
The good news is that in either case, we’ve made the process relatively simply and the filing of your taxes fast and accurate. As with any business we handle, from SubCorporations all the way through Partnerships and to Sole Proprietors, we will help you understand the process, file your taxes and be certain you do not overpay Federal, State, or FICA taxes.
Our process is simple, we start by helping you understand how to properly categorize your income and expenses, we then prepare your returns and set you up for future years armed with the knowledge and processes to make each subsequent year easier than the last.
Honestly, our very favorite clients to work with are those self-employed people. They are always the “go-getters” in my clientele and have the attitude to match. Please note, while I will only prepare taxes for honest businesspeople, that doesn’t mean you need to be organized – we will help you figure that out. But it does mean that if you are looking for someone to look the other way on your income, that’s not a good fit for us. We write honest taxes that leave no stone unturned. This helps you pay the lowest tax possible while keeping you out of trouble with the IRS.