Whether it's January 1 or December 31, it is never too late to do something about your taxes. Of course the earlier you start, the better. Even if the end of the year is approaching there are some last minute things you can do to lighten your tax burden. And if you are a new business, start planning for taxes before you ever take on a client.
Record Keeping
Good records are one key to making sure you take all your allowed deductions, minimizing the amount of taxes you must pay. It also helps immensely if you should find yourself audited. Part of keeping good records is having an organized home office. That can mean organizing both real manila file folders and computer file folders.
Organization and record keeping also means keeping track of customer invoicing, having a system to monitor day-to-day expenses, and protecting your electronic records with backups and file recovery tools.
You don't have to use your computer to keep your books but there are many excellent software accounting programs for small businesses. Some can take you from invoicing to paying bills to creating a balance sheet to putting together your Schedule C (tax form for sole proprietorships) and filing your return. And there are also tax programs that do nothing but taxes, importing information from many popular accounting programs.
To take deductions for business use of your car you'll need to track your mileage. And don't forget, in addition to keeping track of expenses, you must keep track of income. For tax purposes accounting for your income may be different from how you track income for other financial purposes. If starting a new business, start your record keeping immediately.
Taxable Income
Many of us are familiar with paying income tax on our personal earnings. If you are a new business owner you may be unclear about what constitutes business income. For most Desktop Publishing businesses, it is the money you receive from clients when you create business cards, brochures, newsletters, and other items for them.
Not all money coming in is income, such as a loan. Likewise, money needn't change hands for you to have income for tax purposes. Bartering for products or services can also be business income.
*This feature deals primarily with procedures and resources for US businesses. For other countries see the table, below.
Records/Income | Expenses & Deductions | Income Tax | Quarterly Taxes | Sales Tax
Your Assignment: After reviewing this lesson, draw up an initial tax plan for your business. This may include budgeting for and acquiring accounting and/or tax preparation software, setting up a filing system for receipts and other records, creating a car mileage log, and finding out what forms are necessary for filing taxes based on your form of business (sole proprietor, partnership, corporation) and where you live. Begin making a list of items you may want to depreciate, what you believe will be legitimate expenses, and start deciding about whether or not your home office will qualify for the home office deduction. Mark appropriate tax dates on your calendar (tax day, quarterly tax payments, sales tax payments, etc.). Make an appointment with a tax attorney, accountant, or other tax expert to get advice and guidance tailored to your specific personal and business situation.
Freelance Design > Starting a Business > Taxes
IMPORTANT DISCLAIMER: Information in this feature article or contained in the links is provided only as general guidance. Neither About.com nor this Guide can vouch for the accuracy of the advice offered. For specific advice and requirements for your business, please seek the advice of the IRS (or the taxing authority in your country) and/or a qualified attorney or accountant.
This article is part of our free Start a Desktop Publishing Business Email Course. Learn more about the course and sign up now.
Non-US Tax Resources
| Business Laws & Tax Guides | For many countries including Argentina, Australia, Denmark, India, Italy, Spain, Thailand, Vietnam, and many others. US State Guides also. Contain tax information and more. From HierosGamos. |
| Australia: | Taxation Office |
| Canada: | About Small Business Canada Tax Information |
| Germany: | Business Resources (in German) |
| United Kingdom: | Business Support Resources |
| Doing Desktop Publishing & Graphic Design | |
| Training, Education, Jobs: | Careers in Desktop Publishing |
| In the Classroom: | Back to School With Desktop Publishing |
| Jobs: | How to Find an Entry-Level Design Job or Internship |
| Business: | How to Start a Freelance Desktop Publishing or Graphic Design Business |
| Pick Your Path to Desktop Publishing | |
| Get Started: | Basic Guidelines and Requirements for Desktop Publishing |
| Choose Software: | Desktop Publishing and Design Software |
| Tips & Tutorials: | How to Do Desktop Publishing |
| Make Something: | Things to Make for the Holidays |
| Use Templates: | Templates for Print and Web Publishing |
