Tax Time!

Here we go again.  I'm sitting at my desk avoiding starting my taxes...

Paying Uncle Sam: it's one of the worst things about being an independent contractor, in my opinion. But I think every year I get a little better at it, and I've found some great ways to cut corners (legally) to make things a little easier, and hopefully save more.  I'm definitely no expert, and some of these ideas I'm not even sure work yet, but the hope is that my sharing will inspire peers to try the same ideas!  ...and then let me know how it goes for them.  

It's all so tedious:  keeping all the receipts, organizing them at the end of the year into types of expenses, saving all your pay stubs and checks from random gigs, waiting for all the W2s to pour in, logging business miles, adding it all up, then storing it all for three years.   Then there is the pain of separating the 1099's from random side-hustles.  We probably have the most complicated tax process of any profession.  So much is deductible... haircuts, new clothes, gym memberships, going to the movies, SOME gas, perhaps even the part of my house that I use to warm up and practice, or sit and send emails.    I've found each year that the better I am at deducting all the things, and entering all the little exceptions, the more I feel like I am simultaneously being dishonest by stealing from the government, AND getting gypped by missing something major.  But I think that may just be the correct feeling to have.  

Part of me wonders if it is all even worth it yet at my current level of income.  The other part of me says, "Start learning now, you'll be happy you did once you are making enough for the IRS to actually care about you."  Another part of me thinks that I should probably just hire a CPA... and then the last part of me reminds me of what the second me said, that I don't make enough to have a CPA yet, and also reminds me that the two CPAs I've dealt with in the past didn't even seem competent to deal with our strange profession.  

Soooooo, with all that being said, I hope it is clear that I have NO IDEA what I'm doing.  

Nonetheless, here are some pointers: 

I've found that an app called MileIQ really helps with logging my drives.  All you have to do is swipe left or right for personal or business, record an odometer reading at the beginning of each year, and then I write the odometer reading on each gas receipt just to help cooberate the app's data when it compiles it all at the end of the year and puts it in a nice little statement.  It's about $50 a year, and helps a lot... I've been using it for about 3 years... aaaaaand I'm still not sure if it actually saves me money.... because I typically just take the easy deduction option.    Ugh.  (Oh, and let me refer you if you sign up... we both get free moneys.)

Something I'm trying in the upcoming year is designating a business credit card!   I overheard an older guy talking about this technique on a TV set last year and have been excited to see how I do with it.  Basically, just use one credit card for ANYTHING business and the statements are very thorough.  You can see where, when, and how much you bought, and can even see how much of what type of thing you bought by category.  I may not even use my divided receipt folder this year!  The helpful categories with my CitiBank Card include: Vehicle Upkeep, Gas, Postage, Personal Care, Supplies, Entertainment, and others!  It is soooo nice! 

On another note, I think Credit Karma now does free tax preparation... but don't quote me.  I know nothing.
 
And I guess that's about it.   I hope those three tips were enough to justify reading through my rambling thoughts.  Maybe one day it will all be recognized as wisdom... until then take it for what it is: confusing.  I guess I should stop typing and tackle this stack of receipts.