Tax Preparation for Small Business Owners
When I graduated from college, I didn’t like any of the jobs I landed. There. I said it!
See, I have a BS degree in Industrial Engineering, and as much as it has helped me get where I am today, I honestly never loved my career in every sense of the word. There were lots of theory, and very little practice, both in the classroom and in the office. And it drove me insane! I am more of a hands-on, ‘let’s make something’ type of girl. One of the subjects I dreaded the most was Finances; it made me cringe.
But, I learned to go with the flow, and I believe that all that theory turned me into the entrepreneur I am today. Little did I know, I would be here today excited to prepare my taxes for my own small business. Turns out, now I love everything I learned in college, from marketing to productivity to finances and everything in between.
The reason: I am working for myself. I am actively involved in every step and process of my business, and that also includes tax preparation.
My husband and I are both self-employed, and I am also a freelancer. So, all the different sources of income – along with all the expenses- can make tax season a little overwhelming and confusing. But, I have always said it, if everything has a dedicated space, and it’s appropriately labeled, there is no reason to panic.
Intro to DYMO LabelWriter® 450
The DYMO LabelWriter® 450 has many great features, but my very own favorite has got to be the thermal printing technology. The DYMO does not use any ink. That alone is a big money saver; we all know how expensive ink and toner can be.
The DYMO can also print crystal clear barcodes. I am looking into creating barcodes for my Etsy products soon, for a more professional look in my packaging. So, I can tell you right now that it has been an excellent investment for my small business. It’s not only saving me precious time but also money.
You can also store your contacts in the Address Book or insert from your Outlook®, Microsoft® Word, Excel®, or Quickbooks®. It is perfect for mailing out invoices or statements to customers’ addresses saved on your bookkeeping software.
Sorting and Filing Made Easy
The DYMO comes with its software and easy to follow installation instructions. For this project, I used 2-Up File Folder Labels to label each of my new filing folders. Inserting the roll in the machine was quite easy; it’s pretty self-explanatory, as you can see in the image below.
The software is very user-friendly. I am fascinated by the fact that I don’t have to feed labels in my desktop printer, and I can print a precise number of labels (1 or 100) without difficulties. No sheet labels jammed in my printer anymore. Just choose your label of choice, double-check the dimensions of the roll you loaded in the DYMO, type your words, and print.
I love tidiness, so creating this filing system with the help of my new DYMO was a great project. Even though we live in the digital era, I still like to save my hard copies, bank statements, individual receipts, and correspondence that, in the long run, can support my tax preparation.
My ‘old’ filing system was: putting all the receipts inside a drawer, quotes, and contracts inside a binder, some other files stayed in my computer. Bank statements never made it to my desk because I opted for paperless statements. But, it was time to create a folder for each source of income, expenses, and other documents. It’s the only way I can make tax season less overwhelming.
I created 12 folders labeled as follows:
- Blog Income
- Blog Expenses
- Freelance Writing
- Etsy Income
- Etsy Expenses
- Side Jobs → non-Etsy
- Business Bank Account
- Personal Bank Account
- Utilities → since we work from home, some of our expenses are tax-deductible.
- Tax Forms → 1099’s and others
- Supporting Documents
I noticed that since I started using my DYMO, I stopped procrastinating in the office and started getting my organizing done. It’s so easy to use; you will see how it can save you so much time in preparing your taxes.
Filing Taxes When Working from Home
Working from home is not only convenient but also may save you money in your taxes. I mentioned above that some of our expenses are tax-deductible because we work from home. If you have a designated space in your home that you use solely for business, you can save money on your taxes too.
Bills such as internet service, electricity, rent, and even home repairs can be deducted from your taxes when appropriately filed with any of the two existing methods. These are:
- Traditional Method: add up your year’s expenses such as mortgage/rent, insurance, real estate taxes and utilities. Multiply that figure by the percentage of your house that is dedicated to the home office.
- Simplified Method: measure your home office and multiply your square footage by $5.00. That will be your deduction. The deduction with this method caps out at $1,500.
You can decide which method is best for you. If you keep track of all of your expenses and save receipts, you are better off using the traditional method, as it might save you more money. You can also use the simplified method, compare both, and see what works to your advantage.
Put a Label on Everything
I am a gadget person. If you ask me if I want a new pair of designer shoes or a new label maker, I will run to my office to make room on my desk for that label maker. It’s that simple. Anything that can make me more efficient and productive in my business is always welcome.
Labeling my folders using the DYMO LabelWriter® 450, has made sorting and organizing my home office and all its paperwork, a breeze. I see a lot of labeling in my future! In a few weeks, I will be bringing some tips on decluttering your digital life, and I will be making a lot of data CDs.
Next time I have to mail out invitations, I can print the labels with my DYMO. Did I mention you can use any font installed on your computer? That, to me, is huge, because I’m addicted to pretty fonts! But all in all, I love labeling my folders (and anything else possible around the house!).
The DYMO LabelWriter® 450 Value Pack is the solution to all your filing, labeling, and mailing needs. It can save you time and money.
Finding paperwork is one of my biggest struggles in the office, only because I have so much and the piles grow each day.
What is your biggest struggle during tax season?
Omg Flavia this post is great! I am loving every post I am seeing from you! Thanks for all the valuable and beautiful content!
Thank you, Meredith! Always love your supporting and encouraging words. I’m learning from the best! I’m looking forward to write more valuable content each week. You are truly appreciated!
I love this system. It’s so pretty and definitely functional. I think the key for me is a system that’s pretty enough to leave out in plain sight so that I will use it regularly. #client
I like pretty things too! They inspire me. The fact that the DYMO is small and doesn’t take any desk space, it’s perfect for me. I keep it plugged in and use it all the time. It’s my job to keep everything organized and labeled in this house! 🙂
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