Taxes? WAIT WHAT? You mean I have to pay someone a portion of the money I earn?
HAHA- that was me.
What can I say? Taxes aren’t my area of expertise- ya know?
Anyway, to get real these were serious questions I had to ask Michael when I ( finally ) started to make a living blogging.
Years ago I was a broke Pure Barre teacher & bartender living paycheck to paycheck until I started to make a living blogging. In the restaurant business, I received a paycheck & taxes were handled for me.
EASY.
Pretty much, I had no idea how complicated taxes where once I had my own business. I WAS SCREWED. In the beginning I paid for everything out of my personal checking account ( don’t laugh ). Also, I hired a developer for 50 bucks a month to build my first website & bought household decor/clothing using my debit card to shoot for The Skinny Confidential.
Things were bleak: I didn’t keep a list of expenses or even know you could potentially save some money by doing so. The idea of taxes was FOREIGN in my world.
Now that TSC is a real company & entity, the days of not paying attention to these details are OVER.
SO! I wanted to write this post to help any bloggers or new business owners save some time/money & INSANE aggravation. When I was dead broke, I had to scrape together every CENT for a proper computer, camera, developer, & props.
But really I had no idea that I could expense this stuff and get a deduction. I KNOW- OUCH.
The problem was I was being written checks & receiving income without documenting & coding the expenses.
LOOK AT IT THIS WAY: If you make 1000 dollars you will owe taxes on the full 1000 dollars. If you code your expenses according to the tax laws (in my case: camera gear, computers, designers, etc) you can then offset your income by deducting those expenses on your tax return.
So if I had $1000 in earnings & $800 in expenses, I would then only pay the taxes on $200. Make sense? LUCKILY it saved me a ton of money when I learned how to do this. Michael had to sit down & show me the benefit of getting this organized…& let’s just say it took a ton of training.
It’s just not my favorite subject in the world.
As a new blogger, vlogger, or influencer starting to make a living with your platform, it’s really important to be SAVVY when it comes to taxes.
Really though, it makes a huge difference financially. We all need to know what we can write off & when: is it our computers? Our camera gear? Clothing? Travel? Software? Designers? A home office? All of this stuff can be classified as expenses & deductions which in turn save us money when it comes to taxes.
Michael always told me if you’re setting up a new business, set up the foundation as if it were already a huge business so that when you get there you aren’t playing catch up.
When I was starting out I wish I would have listened because it took a ton of work to go back & organize years later. It can be really complicated & confusing so when I learned about TaxAct I was so excited to have a platform to help me organize everything QUICKLY & EFFICIENTLY.
TaxAct is a FAB tool to help you figure all the nitty-gritty out. I LOVE IT because they have a product for freelancers & independent contractors ( like bloggers & influencers ).
When I first started out I didn’t know how to take advantage of any deductions or credits so I lost out on a ton of money. If I had a tool to help me organize my expenses & figure out my deductions, it would’ve been a much more seamless situation.
So many of my friends start businesses & have no idea how to file their returns at the end of the year- it costs them a ton of money.
Michael’s TAX TIP:
Did you guys know you can expense out some conferences & seminars? Lauryn just spoke at Create & Cultivate with Kim Kardashian for work. Think about it: you could potentially expense that & claim a deduction. You can get a deduction for doing things that grow your business. So my tip this week is to be smart during tax season, use a tool that can help you get the maximum deductions and credits so that you can hold on to more of your hard-earned money. This works for anyone who is filing their taxes. Even if you are a W-2 employee. TaxAct is also backed by a one hundred thousand dollar accuracy guarantee so you don’t have to stress when filing with them. EASY!
Ok guys: what’s your experience with taxes? Should I do more posts like these? Keep me posted.
Talk tomorrow, x lauryn ( & kinda Michael because he’s real good at taxes )
+ this post is in collaboration with TaxAct. as always all opinions are my own.
++ WHY I TIME-BLOCK.
SHOP: top | glasses ( took lens out & added a clear lens- similar here ) | laptop cover | planner
{ pics }
The Skinny Confidential OFFICE INSPO:
UGH tax time! This is super helpful because I have yet to do my taxes…
http://www.taytayrose.com
That’s okay Taylor, I used to always do it last minute. x
You guys, Lauryn is so right and I am so glad she posted about this, creative entrepreneurs always need so much help in this area. I can help you keep your business/life together so when it comes to tax time everything is EASY. I serve as bookkeeper/CPA’s bff and I niche in creatives. Let me know if if anyone needs help/has questions. I know how stressful it can be when you feel like you have no idea where to start, and if I can give any advice it’s keep always business and personal separate (bank accounts, credit cards).
Thanks for the support Valentina! x
YES Please post more on taxes and how you keep all of your expenses organized. I am about to inherit a business and I would love to know more tips on organizing for it.
OK! Thanks for the feedback Brittany, I will do more posts about my finances. x
YES!! My husband has been NAGGING me to see who bloggers use for taxes, and I saw your tax guy on your IG story, but didn’t take a screenshot because I for some reason thought I would remember, lol. Do you mind sharing who you go through? I can’t remember if it was Brieman Group, Berman Group? Something along those lines? haha
This was SO helpful to read, thank you so much for sharing xxx
http://www.attainedbeauty.com
I’m 26 and am an up & coming blogger (just you wait! haha) but I have a full time job right now and my Dad still does my taxes. While I may have grown up in so many ways, moved states, moved in with a boyfriend of 3+ years, and gotten off my parents health insurance and found a job that gives me my own (Job sucks but it’s a mean to an end until I can get my blog where it needs to be. growing pains of starting is rough but necessary, right?) I somehow still managed to send my father a picture of my W2 this year so he could file my taxes. I think it’s time I take this into my own hands after this post LOL! Thanks for writing a post on this, I love how multi-faceted this community is. 🙂
xx
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Hi Lauryn and Michael,
This is such a great and informative post! I absolutely despise doing my taxes even though I work for a private wealth firm (blog on the side) and deal with tax items all day every day it is still so incredibly boring to me. I love the tip about setting up a business as if it is already a huge business so that you aren’t playing catch up. Such great advice and I also love the fact that it also puts good energy out into the universe about the success of your business. Sending you all the best vibes today and everyday!
Thanks Dakotah! x
Bookmarking this for later when I start doing my taxes this year! 😛
I know next to nothing about taxes. It feels like my brain freezes every time I hear about it. Thank you SO MUCH for sharing about it. Get to clear my head about something. Thanks!
Property taxes, licensing fees, and occupancy taxes are three of the most common forms of taxation for rental property and they’re also deductible.
I remember when I started working, I really thought that the tax I needed to pay is just small. I was really surprised that it wasn’t the case and that it has its own computation depending on your salary! Nonetheless, your post is really helpful – most especially for people who are new with taxes. Thank you for sharing!
The best way to handle tax with least effort is to just hire accountants or business service that does tax. They can do it all for you.
Since an accountant should be knowledgeable about your business environment, your tax situation and your financial statements, it makes sense to ask them to pull all the pieces together and help you come up with a business plan and personal financial plan.