Hello, I'm Ron Breckenridge. As a hobby, I refinish broken jewelry I find at thrift stores and pawnshops. The jewelry often features major faults that ruin the structure and finish of that piece. While performing the repairs, I remove a lot of gold and replace it with new materials. The gold I remove sits in a little jar until I can use it again. Every once in awhile, I come across gold I just cannot use. The gold is still good for other purposes, but doesn't work well for jewelry repairs. I save this gold until it fills up another little jar, and then I take it down to the gold buyers. I'm provided with a small stipend depending on its market price, which is awesome. I want to discuss the process involved with gold buying on this site. I will also explore other ways to obtain gold to sell. Thanks.
Doing taxes can be more complicated if you are self-employed because there are more items to account for than if you get a W-2 from an employer. If this is your first time doing self-employed taxes, here are 3 ways you can prepare so that they are easy to do.
Use a Management System
First, use a management system or spread sheet to record your expenses each month. You need to categorize the expenses as well instead of just lumping them all in one column or category because your accountant will need to have the expenses categorized.
For example, have categories or columns for office rental expenses, utilities, gas, TV services if you use your TV for clients to watch, health insurance, business meals, business trips, business clothing, general expenses, and miles driven.
You can include more categories that apply as well. The point is to make sure that you have separated expenses so that when your accountant asks you for the total for each category for an entire year, you will be able to give that amount easily.
Keep Receipts
Second, you need to keep all of your receipts, whether they are electronic or printed. These receipts act as proof of your expenses during the year, and you may need them if you ever get audited.
Sometimes you may not receive a receipt for an expense, especially if the expense is charged to your checking account each month. When this happens, just save all of the bank statements as well so that you have proof of the re-occurring payment. You should be able to request a receipt from any company though, so set up an automatic email receipt if at all possible.
Also, file the receipts away for the entire year in one place. Start a new folder the next year so that you do mix them up and get confused when you are trying to account for all of your expenses.
Find Deductions
Lastly, find as many deductions and write-offs as possible because this will lower your total gross income for the year. When your income is lowered, you will pay a much smaller portion of taxes.
If you teach music from home, for example, then buy new music, go to concerts, take students to lunch, record miles when you drive to the store to buy rewards, and make sure that you count every single expense related to your business. You can even count your phone as an expense if you use it for calling and communicating with students.
By doing these 3 things, you can be better prepared for doing taxes with an accountant (such as Dale K. Cline, CPA PLLC), and you can save some money in the process by paying the government less.
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