If there is one thing I learned from my family, that I will never forget, its that TAX SEASON begins January 1st and ends April 15th. Most families don’t put that much emphasis on tax season but considering I have not one but TWO accountants in my family we all seem to know the drill by now. Although our family continues to dislike the weekend office hours + very long nights that my dad and brother endure during these 4 months we are thankful for all the knowledge we’ve gained from them. And when I say we, I mean my mother & I. We are both self-employed, and while it is amazing to have freedom to run your own business that best reflects you, tax season is definitely A LOT more work. Luckily for me, I grew up watching my mother prep each season and I learned from my parents how to properly plan + file my taxes for my small business. Today I will be sharing some advice that I hope will help fellow photographers, creatives, or any small business owners just getting started, how to properly prep/ plan for tax season while maintaining your sanity and getting the most out of it! I promise, its not as scary or as painful once you have a plan!

 1. Create an organization/ filing system for the following categories:

A. RECEIPTS + EXPENSES: I cannot stress how important is it to have an organized system that works for you + your business when it comes to expenses. For the first two years of LMP I was so disorganized with receipts everywhere and when tax season rolled around I was so stressed trying to find everything to make sure I could write off my business expenses. Biggest piece of advice: continuously update your records. Otherwise you will become overwhelmed and it will become more stressful than it needs to be. When it comes to business expenses you should be keeping receipts and recording them for EVERYTHING you purchase involving your business. Seriously, everything. Everything from equipment, to advertising, to workshops you attend, to flights you get on, to even coffee you purchase while meeting with a client. You need to save every receipt so you know at the end of the year where your spent your money + what’s deductible.

Now that you saved all your receipts you need a filing system to track your expenses and categorize them for your CPA. For YEARS I was doing this manually and it took FOREVER. Now, I use the NeatReceipts PORTABLE SCANNER + SMART ORGANIZATION SYSTEM. It was a serious life-changer. It can scan receipts into digital form, recognize the text, add both the text and images to its database, and then let you organize the data into expense reports and the information you need for your yearly taxes. Once everything is scanned, I throw my receipts in the current months folder and save them until the end of the year. Once tax season rolls around I just export the expense reports + send them off to my CPA!

 B. INCOME: Since I am still very old fashioned when it comes to payments, only accepting checks, I record everything manually that comes in. I do this in a basic spreadsheet using the Neat program as well- this scans the check so I always have it for my records even after I deposit it! I organize everything into categories so I know where my income is coming from each year: deposits, installments, final payments, lifestyle portraits, album sales, etc.

C. MILEAGE + AUTO: Record your mileage!! There are so many apps out there that make it easy for small business owners to record mileage electronically now that you don’t even have to waste your time writing anything down! I prefer using MileIQ – Mile Tracker & Mileage Log for Tax Deduction. Also, if you have a business car make sure you are saving and recording any expenses you pay maintaining the quality of your car. For the destination photographer, keep your receipts for the following expenses while away from home: airfare, car rentals/taxis/public transportation, meals, lodging, laundry, and business calls.

D. DEDUCTING YOUR OFFICE OR STUDIO SPACE: Buying or renting a studio or office space is a business expense. But, if you are like me and work from a home office, you can write off a percentage of ALL your home utilities. I keep a log of all our home expenses throughout the year that way everything is gathered when it is time to prep for tax season.

E. DONATIONS: Every year I make sure to take part in a charitable donation of some kind, wether I sponsor a fundraiser/ sports team, donate a session to help support a local cause or even if I donate equipment. Make sure to keep a log of all of this!!

6. SECOND SHOOTERS/ ASSISTANTS: If you pay someone to assist you for a project or to second shoot a wedding, the amount you pay them may be a contract labor expense.  This does not include amounts paid to regular employees.  You may be required to issue a 1099 form to any individual you pay $600 or more in one year.

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2. Save 1/4 of ALL your income for estimated taxes: This is extremely important! You always want to make sure you save enough in a separate account for your tax return. Each year I make sure I have at least 25% of all of my income put away to cover my return amount. Everyone is different when they come to this so make sure you talk to your CPA to see what works best for you. Which brings me to my last point:

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3. Work with a PROFESSIONAL CPA that you trust: Last but definitely not least, talk to a professional accountant!! I cannot stress this enough, especially if you are struggling with bookkeeping. Working with someone who is knowledgeable of running a small business can tremendously decrease the amount of stress you will feel when it comes to business finances. Also, you want to make sure you are consulting someone that thoroughly understands tax laws that pertain to your business to keep your business safe.