I hate accounting software.
It’s tedious and expensive.
Here’s how I manage my estimated quarterly taxes andtax returnwithout missing out on majortax breaks.
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Open a business checking account
The No.
1 rule of bookkeeping without using accounting software is to have separate accounts for your business and personal funds.
This keeps you organized and makes it simple to keep personal and business transactions separate.
Business expenses come out of your business bank account and business income flows into it.
I pay myself directly from mybusiness checking accountby transferring a percentage into my personal checking account.
The amount you should put away will vary depending on your business’s costs andyour tax bracket.
Instead of plugging the numbers into complicated accounting software, I use a simple spreadsheet.
Each quarter I download all of the transactions from my business bank account as an Excel spreadsheet.
I can quickly sort it by values and exclude any transfers to my personal bank account.
For more complicated income, I recommend creating your own revenue tracker in a spreadsheet.
The accounting for this business is a little more complicated.
Each line item for this event goes into my Google Spreadsheet.
This includes:
I add up the columns for income and expenses and then compute my operating profit.
This keeps me organized whencalculating my taxable incomeand revenue for my taxes.
I also keep separate tabs on the spreadsheet so I can look at past year’s expenses.
But don’t wait untiltax seasonto look at your business transactions.
Until then, I’ll leave the fancy accounting software to the pros.
