Episode 024 – Andrea Miller on Tax Prep Tips for Self-Employed Musicians

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Summary

Today’s show follows a slightly different format because we’re talking about how to prep for taxes.

I’ve got five tax prep tips to share and details about an upcoming Self-Employment Tax Crash Course webinar that I’ll be offering on Friday, March 1, 2019.

Register for the webinar here!

Takeaways

5 Tips for Tax Prep

Schedule time on your calendar to take the next step
- 2018 tax returns are due Monday, April 15, 2019
- 2019 quarterly payments are due
  - 1st quarter – April 15, 2019
  - 2nd quarter – June 15, 2019
  - 3rd quarter – September 2019
  - 4th quarter – January 15, 2020

Buy software or enlist the help of an accountant
- If you’re buying tax prep software, be sure to buy a version that can handle self-employment taxes and will help you calculate your quarterly tax payments for the upcoming year
  - I used TurboTax Home and Business for many years
- If you’re looking for a tax preparer, ask friends for recommendations or look for someone who works with self-employed individuals.
- Even if you’re hiring someone else to do your taxes, don’t use that as an excuse to “check out.” It’s still important to review your tax return, read through it, and ask questions so you can understand what’s going on in your business.

Collect and organize documentation
- As you receive electronic tax documents, download and file them in a digital system or tag the emails “Taxes 2018” so you can find and reference them easily when it’s time to do your taxes.
- Dedicate a folder or large envelope to collect paper documents as they arrive.
- Keeping track of the business expenses you incur throughout the year can help you reduce your tax bill, but this info has to be documented and organized to be useful.
- Use an Excel spreadsheet or studio management/accounting software to track expenses.
- IRS article on Deductible Business Expenses

Max out retirement contributions
- Review the annual maximums for your retirement accounts and try to max out your 2018 contributions.

Prep for next year
- Put a recurring task on your to-do list every week to process receipts and document business mileage.
- Plan a personal budget for the year, including monthly savings for projected taxes and retirement contributions.
- Get rid of the stuff you no longer need
  - Scan receipts and throw out physical paper
  - IRS Guidelines on How Long to Keep Records