A Simple Way to Make Tax Time Easier

Bethany Jett

Bethany Jett loves sipping coffee and jamming in her planner while raising three boys with her college sweetheart Justin.

April 8, 2020

Tax time is a terrible time for most entrepreneurs. There are so many rules and laws and crazy exceptions that unless one has a head for finance, it can make you want to curl up in the fetal position with your baby’s blankie.

Tax time for me means giving my CPA a list of income and expenses but tracking that income and ALL those expenses throughout the year has always been a headache–especially when I wouldn’t stay on top of it.

So to “stay on top of it,” here are three tips to make tax time a little less headache-y.

Keep Great Records

I’ve learned the hard way that it is much much much easier to record a transaction “in the moment” than it is to go back and enter five million. The idea of sitting down once a month to reconcile the checkbook and categorize receipts sounds good in theory, but I’ve never had the discipline to actually do it.

Instead, when it’s time to do taxes, it’s a mad-amount of craziness as every other deadline gets pushed in order to unearth and remember expenses from months earlier.

This year, things were different.

I created a Google Sheet to track income and expenses and…drumroll please…disciplined myself to record things right away.

BONUS: You can claim a free version of this spreadsheet to save as a template to your own Google Drive here.

Google Spreadsheet for Easy Tax Records

I used to keep my income and expenses in the same sheet but in two separate tabs. The issue I ran into this year was having to back and forth between the two instead of having everything in one place that I could organize and sort.

In the image above, you’ll notice in column H the phrase “Sales & Use Tax.” Now I’m not the expert on this, but because I sell a physical product “aka my books,” I have a “nexus” set up in my state. Books that I sell within the state require a state sales tax based on county. So I have that column in my spreadsheet so that I can keep track.

Here’s an income example:

If a royalty check from a publisher comes in, I use my phone to do a mobile deposit, write the confirmation number and date on the check, open the “JETTsetter 2019 Taxes GSheet” which is handily bookmarked in my “Bills” Favorites Bar folder, record the information, then file the check in my pretty orange box.

Orange financial file box
I’ve used this orange photograph box to hold checkbooks for years!

The whole process of recording the check right then and there adds maybe three minutes to the process but voila! it’s done. Over. Finished. And when the check goes into the corresponding year’s envelope, I know it’s been recorded.

Here’s an expense example:

If I make a purchase online or see an email payment renewal confirmation, I’ll save a copy of the receipt as a PDF, file it in my “JETTsetter 2019 Taxes” folder, print a copy if necessary, and record it in the GSheet.

The biggest time-management issue for me is when I have to record receipts from travel, but I’m working on the self-discipline to record those receipts in the 48-hours following a trip.

Use the Right Tools for YOU!

I’ve been using a combination of Google Sheets and QuickBooks (Intuit Self-employed) to handle taxes but recently let go of my Quickbooks self-employed account. Since I’m able to handle my writing and speaking income and my expenses with my Google sheet, it was the right decision to let it go. There were better things I could do with that $180 per year.

Always make sure to talk to a professional when it comes to your taxes and specific situation. No matter how you organize, the most important thing is to find the tools that work best for you, your family, and your business.

Please note: This post is not intended to take the place of legal or financial tax advice and it is always recommended to consult with a professional.

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