Fire Your Accountant: How to use Virtual Accounting Programs to Finish Your Taxes Faster

While small business owners have a quite a few more things to think about compared with the average taxpayer, virtual accounting programs have made it easier than ever to fire your accountant for good.

Back in the day, accountants and tax professional wielded some sort of magical power: you gave them your receipts, held your breath, and a few weeks later they produced the completed 1040 that sealed your tax fate.

With the advent of the Internet and do-it-yourself technology, it’s now easier than ever to do your taxes yourself.

As a small business owner or a self-employed individual, you have a quite a few more things to think about compared with the average taxpayer. However, virtual accounting programs have made it easier than ever to fire your accountant for good. And if you’re tracking your receipts in Shoeboxed, then you’re already one step ahead of the game. Shoeboxed works with numerous online accounting platforms; check out our list of partners.

If you aren’t already using one of these tools for your small business, you’re missing out! Virtual accounting programs allow you to:

  • Track your spending throughout the year – No more digging through old filing cabinets looking for receipts and invoices. Applications like FreshBooks and GoDaddy Online Bookkeeping automatically track what you’ve spent and earned by analyzing your financial transactions. Each transaction is automatically assigned a tax category, making reporting at the end of the year a breeze.

  • Categorize your spending – Instead of analyzing your income and expenditures on a monthly basis, accounting software gives you a live snapshot of your spending for the entire year. Account totals are updated every day, giving you an accurate, up-to-the-minute snapshot of your small business’ financial health. Since every transaction is instantly assigned a tax category, you’ll save hours of time manually entering totals into spreadsheets.

  • Create one-click expense reports – When the end of the year arrives and it’s time to do your taxes, simply log in to your application and create one-click reports based on the criteria of your choosing.

You can generate a report based on what you paid certain contractors, or a report that includes revenue from a certain set of clients. It’s also easy to see how much you spent on vehicle maintenance, travel, education, technology expenses and other IRS-approved deduction categories.

  • Create and manage invoices – All of your invoices are stored in your accounting program, making it easier than ever to find what you need, when you need it. Instantly see how much a certain client paid you last year, or which invoices are still outstanding. You can also compare revenues generated with expenses, making it easy to see how your small business is doing overall.

  • Sync multiple accounts within a single platform – Accounting software can give you an accurate financial snapshot of your entire company through linked accounts. By syncing your software with your bank accounts, credit cards, and Paypal account, the reports you generate will be completely comprehensive and give you an accurate picture of your spending.

It’s easy to forget to calculate totals for accounts you rarely use. With linked accounts, your software will never forget to include out-of-the-ordinary payments and expenses.

  • Painlessly process payroll – As a small business owner, you’re not just responsible for your own taxes. You also have to deal with your employees’ taxes, as well as any independent contractors you may have hired throughout the year.

A virtual accounting program will not only process your payroll throughout the year, but give you the ability to see how much you’ve paid out, determine what portion of that is taxable, generate 1099 forms, and calculate how much you’ve paid in areas like employee health insurance.

Here are additional helpful tips if you’re self-employed or a small business owner.

Are you currently using a virtual accounting program? How do you like it?

Self Employed Tax Deductions: How to Turn Procrastination into Motivation!

When you woke up this morning, your first thought (after thinking “Nice. The world didn’t end.”) was probably something like “Dang. The world didn’t end. Now I have to deal with my self employed tax deductions.”

Whether it’s deductions, taxes in general, or scrambling to gather slips of paper and receipts that have been collecting dust for 12 months, the end of the year can be a seriously stressful time for small business owners, freelancers and the self-employed.

With a mere 10 days left in the calendar year, and a quarterly tax due date just around the corner (that’d be January 15, 2013, in case you’re interested), even the most diehard procrastinators are beginning to admit that the time has come. Though shalt do thy taxes.

If a post-apocalyptic countdown isn’t enough to get you geared up, check out our completely non-businessy list of ways to motivate yourself to move those self employed tax deductions from the to-do list to the DONE list!

BRIBE YOURSELF

Finishing your taxes can be a massive task, especially if you’re a solopreneur running a one-woman or one-man show when it comes to your business. If no one is going to do your taxes but you, and you’ve waited until now to start getting organized, you may be facing a project as big as those stones the Mayans used to predict our December 21st expiration date.

In order to get motivated to dive in to your taxes, bribe yourself with a treat that is more enticing than the dread surrounding your deductions. This is not the time to splurge on a chocolate bar or a new iTunes download. We’re talking about some serious carrot dangling here. Spoil yourself with something along the lines of:

  • A massage. A 90-minute massage.
  • A long weekend at the most exotic location you can reach by car in 5 hours or less.
  • An entire day (24 full hours!) with the phone and computer turned off, the guilty pleasure marathon of your choice on TV, and a tube of cookie dough for dinner.

PLACE YOUR BETS

After reading the Shoeboxed blog all year, you’re obviously armed with a crazy amount knowledge as to what qualifies as self employed tax deductions. After all that learning, it’s time to cash in! Grab your virtual assistant, your significant other or your best friend, and place bets as to the grand total of qualified write-offs you have for 2012. You can even get fancy and bet on specific categories: travel, office supplies, health insurance premium payments, the sky’s the limit!

The winner of the bet gets the prize of their choice from the “Bribe yourself” section above!

FUN WITH FRESHBOOKS

If you use FreshBooks for your accounting, a lot of your procrastination pain will be relieved come tax time. Besides providing you with year-end invoicing totals and helping you calculate expenses, FreshBooks creates nifty graphs and charts that let you see how much you’ve earned and spent throughout the year.

These charts are seriously motivating! Set goals and see if you can beat your own best record. The faster you get your taxes done, the faster you’ll be able to hang up your graph on the fridge!

FreshBooks Chart

SELF EMPLOYED TAX DEDUCTIONS FIESTA

You, your other self employed buddies, and a pitcher or two of margaritas. Oh, and you’re doing your taxes. What could be more fun than that? Host an end-of-the-year tax party with all the fixings. You’ll be able to swap war stories, share tips and tricks, help each other with accounting, and answer each others’ questions about whether or not that trip to Cabo counts as a write-off.

How do you get motivated to do your taxes?

photo credits: valleydalemassage.com, freshbooks.com

Business Taxes for Self-Employed Rock Stars

photo credit: realbalancewellness.wordpress.com

Making the move from being gainfully employed to be self-employed can be scary, and navigating the rules surrounding business taxes can be the scariest part of all. As an independent contractor or sole proprietor, you’re flung into a murky world of IRS requirements that most “normal” folks never have to deal with. Don’t fear, you indie rock star, you – below is a comprehensive breakdown of everything you need to know about your business taxes.

Continue reading “Business Taxes for Self-Employed Rock Stars”