How To Handle Your Taxes: Tips & Tricks
It’s tax season (the worst) so we were curious how everyone else is handling this stressful time and whether they have a tip or two to share. The whole process can be quite overwhelming and unnecessarily complicated, notes Jewelry designer Susan Alexandra: “taxes are truly baffling to me and I'm perplexed as to why I had to sit through years of algebra in school when they should have taught us basics like tax payment”. Overall, the consensus is to bring in an expert and let them figure it out on your behalf, or as Susan puts it “I put all my documents into an envelope and send them to my saintly bookkeeper and hope that it all works out.” Others do swear by accounting softwares, we explore all tactics below in hopes to help you though your upcoming taxes.
Opting for an accountant or business manager
Most of the recommendations have been to get an accountant, mastering engineer Heba Kadry says, “it makes all the difference” and while it can cost a lot of money for a professional to handle everything, if you have your own company, “your accountant can save you so much on tax that it pays for itself”, as art director, Noemie Le Coz puts it. Filmmaker Crystal Moselle swears by her business manger who “saves her life” every year.
Entrepreneur Kavi Moltz has always had an accountant deal with her taxes but she recommends being very diligent with organizing her returns, “I am so often called upon to provide them for different purposes, lawyers, investors or applications” she also recommends for business owners to make sure that you’re filing sales tax in the correct states.
With that said, not all accountants are created equal and finding the right person is as important as filing them, for example, ceramicist Ivy Weinglass wish she had invested more time in finding an accountant she can trust and that respects her career choice “I had an accountant who told me there’s no way I would ever make a living being a ceramicist.”
For those in creative industries, Ivy Weinglass swears by Jelina Saliu who runs Accounting Management, artist, Molly Surno recommends Lewis Holman, who works primarily with artists and literary agent, Melissa Flashman suggests Brass Taxes, adding that “they are terrific, especially for creative types.” Marketer Dianna Cohen recommends Wolf Weissman: “He's really helpful in guiding me throughout the year and making sure all of my invoices, expenses and documents are accounted for.” Illustrator Ariel Roman recommends CPA Collective who she met through the Better: Business series Sarah Kim organized.
Taking the time throughout the year to stay organized is much better than doing it all during tax season preaches Ivy Weinglass. Actress and activist Jameel Jameela says “I keep a tax account, and always have, since I was a teenager, put my tax money in it, that I took out of my own wages. So I never thought I had more money that I actually did, and so that I never had anxiety about how I would pay my tax bill. It was always covered. It made me a frugal and practical person, and taught me to never live beyond my means.”
Stylist Beverly Nguyen suggests making a giant excel to plan your finances and keep track of all your jobs if you’re a freelancer, “use a scanner app for all receipts and put it in a folder immediately and get museum memberships because you can write it off.”
One of the first things Dianna Cohen did when starting her own business was opening up a separate business account so that it’s organized and separated from your personal finances. She also recommends setting a monthly time on her calendar to export her expenses and payments from clients.
Tapping friends & family for help
It never hurts to ask your network on how they handle their taxes, when producer Naima Abed set up her production company, the first thing she did was look for accountant. “I talked to one of my most savvy, entrepreneur friend and simply went ahead with his accountant. I run a tiny operation but it’s such a headache that I feel like by appointing a reputable firm I was also buying out some of my future anxiety”, both comedian Lauren Servideo & journalist Priya Patel consult a family friend, Priya adds, “I basically filled out all my forms and showed it to him before sending it in just to make sure I got thing right. I got more organized every year after the first which made it a lot easier.
Accounting & tax software
While handing everything to an expert is one way to deal with your taxes, some swear by the easiness of accounting softwares. Producer, Mimi Packer, says “In the past I used an accountant because I thought I would mess up my taxes but when I switched to Turbo Tax to save money, I found out that it’s extremely easy and less than half of what I would spend with an accountant.” She also recommends Turbo Tax’s customer service: “you can call the Turbo Tax people if you want a list of what you can claim because they actually have all the crazy tips your accountant would have on claiming stuff, like a handbag to carry your work computer.” The tool also comes recommended by marketer Sara Haile: “I'm always impressed with how simple and straightforward they make it.” Activist Jasmyn Story uses Turbo Tax to file both her consultation work (1099s) and her full-time employment (W2s), but is also looking for additional support from an accountant. “I am currently looking for a BIWOC CPA to support me with my financial management as well as my tax filing - I realized that for what I spend on online support, I could allocate those funds towards a womxn business owner with way more skills than my laptop program.”
QuickBooks comes in as another popular tool. Curator Olivia La Roche does her own taxes using QuickBooks Self-Employed, but is also considering switching over to using an accountant. Entrepreneur Nicole Najafi feels similarly: “this is one area it's best not to DIY.” Nicole works with a CPA who helps her file as it is required if you file as an LLC. Ultimately she suggests to “get organized, get on QuickBooks, get an accountant, and save yourself future pain.”
Dianna Cohen uses QuickBooks for organizing invoices with clients: “I use it in a really simple way right now, but it's set up to scale as I continue to grow.”