Book keeping nightmare.
I’m late filing my business taxes this year. Why? Because I saved all the figuring until the end of the year. I saved receipts to track expenses, but didn’t add them up month to month. That means I had to get them all added up in the month of January, with my husband’s help I managed.
The Department of Revenue wants a lot of detail.
Then there was income, some sales through etsy, some through the co-op, some independently, some parties/classes through the studio, some independently. Etsy keeps a good record for me, the co-op told me how much I made through them, but didn’t divide it into sales and classes, which I need to know apparently. The wonderful bookkeeper for the co-op is looking into it for me, and soon I’ll know what I need to know. You see, every painting I make and sale has to be reported as “manufactured goods”, every sale I make through etsy or independently has to be reported as “retail sales”, every sale I make through another entity such as a consignment shop or co-op, my share of that income gets reported as “wholesale”. On top of that I need to know which of the sales I made myself apart from the co-op were made locally or out of state, through etsy.
This isn’t for income taxes, this is to pay the sales tax on the items I sold at retail in state, and the Business and Occupations tax, and the out of state sales have to kept track of separately in order to not be charged sales tax on them. Income taxes will be another monster to tackle down the road, but getting the report on taxable income from this first business filing is necessary in order to file my income taxes.
A Ledger would have let me know what I could afford.
Another thing that keeping track as I go would have told me is that I was spending too much. I thought maybe I had actually shown a profit this year, but I didn’t. I spent far too much on supplies. Now, a lot of those supplies are still usable this year, so maybe next time around I’ll see a profit… but if I started keeping track month to month, I could try to make sure that there was a balance happening, and curtail spending when a profit wasn’t likely.
So that is my tip for this Tuesday, keep a ledger as you go!