Today's timely guest post is by Jennifer Dunn of Social Street Media. She writes for a variety of clients, including Outright.com, the easiest way to manage your small business finances online!
No doubt you’ve already started the task of organizing everything for the end of the year. Or, at least, you’ve thought about it a lot! It’s never a fun thing to do, especially since it comes during one of the busiest times, the holidays.But considering your photography business’ future is very important at the end of the year. During the rest of the year it’s easy to put things off until later, including evaluating where our ventures are headed. When the New Year stares us down, it’s easier to commit to working a plan.
So what tasks are ahead for the savvy freelance photographer? Let’s take a look.
Hey, who would’ve thought? But these aren’t the usual beautiful landscapes and portraits you usually take. These are plain old boring office and workstations photos! Nonetheless, these pics can help you when it comes time for taxes. Your home office and/or workstation may be available for deductions from your small business. But if you don’t have evidence of anything you use daily for your work, it does nothing for you. Furthermore, your tax agent will know all the deductions you can feasibly pull off, but only if they know what you have set up for your office. While you’re at it, take stock of all your equipment as well. Along with your receipts, they will help authenticate the deductions you’re taking from your taxes.
Go Over Receipts and Contracts
Speaking of receipts, you’ll want to get all those in order before the rush of the tax season approaches. Times are tough, especially for those doing it on their own – naturally, you’ll want to squeeze every dollar you can out of your taxes. That’s why it’s important to have an up to date and accurate record of your exploits in 2011.
Do you know how much money you made and from where? Have you calculated all your expenses and categorized them properly? What about that DSLR you invested in earlier this year, did you take that into account? Everything has to have physical proof for it to work as a deduction, and every job you worked should be properly inventoried.
Going over receipts and contracts is especially important this year because of upcoming changes to your taxes like the PayPal 1099.
If you haven’t heard of this mysterious document, the PayPal 1099 is the newest tax document you may encounter in 2012. A lot of freelancers and small business owners operate through PayPal and other payment processing services like it, which means a lot of money is exchanged through these services. The IRS has taken notice, and now requires PayPal to report to them. This means you may get the new PayPal 1099 form. However, there are a few stipulations that may exclude you. For one, you must have made 200 or more transactions through PayPal. Also, those 200 transactions must have netted you $20,000 or more. If this sounds like you, then you’ll get the new form.
Luckily, it’s nothing complicated, just another tax form. However, it may mean you should wait until you actually get the form to start your taxes. Nothing like a little procrastination, huh? Check out the Outright Tax Center for more information on the PayPal 1099 and other important tax info for self-employed photographers.
What else do you typically do to ready your business for the New Year?
Make 2012 a win-win year. Did you know you can support this site by signing up for Outright? It takes just a few seconds. Outright.com – Automate your bookkeeping so you're always organized and ready for taxes.