Small home business Tax Help That Will Save You Money

Hey guys I'm here to talk to you about something that maybe you haven't thought about too much...YET!  Tax time.  

Our family refers to January through April 15 as "busy season." My husband is a CPA and he actually helped me a little with this post.

So this is for those that have a small home based business such as an  Etsy shop, photography business, cake decorating business, direct sales such as Mary Kay, LuLaRoe, Pamper Chef, or anything that seems to fit in this category.

If this is your first year filing taxes or your first year of business you might be a little overwhelmed knowing what you need to report on your taxes. If you've been at it a few years you may find something useful.  When I opened my Etsy shop 6 years ago taxes never crossed my mind but luckily I had a husband telling me what to keep track of.  So this is what I'm going to share with you today...What you need to keep track of for taxes.  Having this organized will save you time and money on your return.

I have an envelope for my receipts and staple them by month.  I also use a simple excel spreadsheet to keep track of my info.  You can also hand write it in a notebook if that is easier for you OR I have included some free printables for you to use.

*One more thing you can certainly do your own taxes but a CPA is not a bad idea.  It does cost money but they can also save you money.  They know the right questions to ask and will often have advice to keep your taxes down and give you peace of mind knowing you have everything in order.  Also every business is different and some have different requirements they will know what these requirements are.  This is just general information so please research and make sure you are not missing any forms.   

What should you keep track of:

1. all of your profit:  (this is the obvious one).  You make a sale write it down.  If you earn money from an affiliate program write it down.  This is any way you make money for this business.  Keep your invoices for your records.  These can be hard copy or electronic. Just know where they are so you can access them if you ever need them.  *Note: I liked to include everything they paid me in this category including shipping. I deduct the shipping later in my expenses. This is optional but I found it easier to keep track this way.

Download Income Tracker here

2. Expenses/Deductions:

First I think the most important thing is to keep your receipts! Also this is just a general list and will vary based on your business.  I sold mostly crocheted items so that kind of where my list comes from but it should give you a good idea of what you can use.

Advertising

signs

 flyers

business cards

paid ads (think Facebook blogs, newspapers, etc)
referral thank you gifts & incentives

Office/business expenses (behind the scenes/what you need to run your business)

any software you purchase or subscriptions

 Etsy bills,

website fees

I include my picmonkey subscription,

craft fair/expo fees

 calculator

 pens

paper

larger items such as computer, printer, vinyl cutter, sewing machine, etc.
Education (webinars, books, eBooks, etc. seminars)

Product/supplies for product (this is where it gets more business specific)

*include the cost to have it shipped to you as well!*

Here are a few ideas but hopefully will get you thinking about your own business

 Etsy/craft based business 

whatever you use to make your product!

for my Etsy shop I include: yarn, buttons, hooks, scissors, patterns

photography business

printing fees

camera and equipment

photo props

direct sales

product ordered
Samples
giveaway items 

 Shipping costs:  

envelopes/packaging products

actual cost to ship items 

stamps

postal scale

website fees

Don't forget these items!!!

*Home office-based on square footage.  If you have an office or even a closet that is used only for business you can count it.  It is $5 per square foot (up to 300 sq. feet). Don't forget to add items you need to furnish/organize this space under expenses.
*Business lunch
*cell phone and internet bill-you can take a percentage based on how often you use it for business
*Miles (more info & separate printable below)

Download Expense Tracker here

3. Mileage:

This will help save you money on your tax return.  

How it works: Every time you drive somewhere related to your business keep track of the miles!  It is suppose to be written down and recorded as you go.  Sometime I miss a few and refer to my receipts to see the places and number of times I traveled.  I use google maps to get the miles-its pretty easy.

Now what miles can you use? 

Here are some examples (in most cases these are round trip-so don't forget to double it)

every time you go to the store for supplies

post office

a clients home

Hand deliver products

photography locations

venues

expos

craft fairs

Download Mileage Tracker here

Mile IQ App is something I've never tried but in researching it seems to have pretty great reviews.  Its for Apple and Google phone users and it’s free! 

I hope this helps get you started.  Let me know if you have any questions.