If you work part-time from home as an independent contractor, then it is important you keep accurate financial records. When you work as an independent contractor, you essentially own your own small business. Since you are required to file various taxes as a business, it is vital you have a complete recording of your financial transactions.
To ensure you keep accurate financial records for your part-time contracting business, follow these time-tested tips:
Tip: Invest in a Copy of Quickbooks Software
While there are many different small business bookkeeping software options, Quickbooks is the easiest to use and has become the industry standard. Rather than trying to create your own spreadsheets or financial recordkeeping plan, instead, spend a bit of money and purchase a copy of Quickbooks to make your life easier. If you have never used any bookkeeping software, there are many books and online tutorials available to help you use it correctly.
Tip: Use a Separate Bank Account for Your Business's Income and Expenses
When you start contracting you might be tempted to use your family's checking account for expenses and income. However, this is never a good idea. Instead, you should set up a separate checking account and use it for all of your contracting income and expenses. By using a separate account for your business, you can easily look at your bank statements and ensure all of your transactions have been recorded in your bookkeeping software. At the end of the year, you can take these bank statements and financial statements printed from Quickbooks to your accountant for easy processing of your state and federal income taxes.
Tip: Schedule Time Each Week for Bookkeeping Tasks
Since accurate bookkeeping is vital to the success of your small business, you need to dedicate time each week to enter transactions into your bookkeeping software and review your financial situation. Rather than planning to do your bookkeeping tasks when you have some spare time, have a schedule dedicated time each week to record tasks into your software. Regular bookkeeping will ensure everything gets recorded and will make your life a whole lot easier.
Tip: Enlist the Help of a Certified Public Accountant (CPA) to File Your Business's Various Taxes
Finally, since you have never filed state and federal taxes for a business, you should enlist the help of a CPA. A professional accountant will go through all of your financial records and will find you the maximum number of deductions to save your business money.
Contact a company like DSJ CPA for more information and assistance.Share