Whether you’re one of the 80,000-plus people that the Brooklyn Chamber of Commerce estimates are self-employed in Brooklyn or if you pulled in some of the $38 million generated by Airbnb’s Brooklyn rentals in 2013, chances are your tax return includes at least one 1099 form for untaxed, self-employed income. If you’re earning enough on your own for Uncle Sam to take notice, it might be time to consider investing in a better system for organizing your finances than stuffing receipts in shoe boxes.
The deadline to file your income tax return, April 15, is about eight weeks away, which is still plenty of time to get your financial house in order. To help you get started, here’s some sage advice from our professional tax preparer, Steven Zelin, better known as The Singing CPA, as well as five online services every self-employed person should know about.
There’s no hard-and-fast rule for when to hire outside help, Zelin says, but first and foremost, you should feel comfortable with whichever tax-prep platform your choose. “If someone has a very basic tax return, they could do it themselves with software programs,” Zelin says. Untaxed earners, like freelancers, independent contractors and entrepreneurs (basically anyone whose work isn’t covered on a W-2) stand to gain the most from hiring an accountant, as a pro can show you all the deductions you’re entitled to and help you set financial goals for the future.
“I think of it as kind of like doing laundry” says Zelin. “I could probably do my laundry and it will come out OK, but it would probably take me three and four hours to do, and it’s probably a better use of my time to do something else, like play guitar or work on my business. Of course, if I do my laundry wrong, I probably won’t get fined and be audited or possibly go to jail.”
And, like with laundry, you should have your stuff sorted out before you take it to the professionals. Here are five tools, services and programs to help organize your income and expenditures.
1. Shoeboxed: Smarter than stuffing receipts in an actual shoe box, this service organizes your important financial information for you online and creates IRS-approved receipt images from the documents you send it either via email or pre-paid envelopes. Shoeboxed stores, organizes and exports your expense reports directly to you or your bookkeeping application. ($9.95-$99.95/month)
2. Intuit Quickbooks: Customizable, online accounting software that can be tailored to your small business needs. Lets you connect and sync data from your bank accounts automatically, organize expenses, create invoices and process payroll, and syncs your bookkeeping records across multiple devices. ($12.95-$39.95/month)
3. Wave: Financial tools and software designed for small businesses with nine employees or fewer. This cloud-based platform lets your organize your invoicing, accounting, payroll and payments online, with the added bonus of being able to organize your receipts by snapping photos and submitting them through its app, uploading receipt images or PDFs online or forwarding email receipts. Wave will also help you find an accountant through its professional network if need be. (free, or $9-$99/month for premium services)
4. If you don’t have time to shuffle through 12 months worth of expenditures in the next eight weeks, consider outsourcing the task to someone else by hiring a personal assistant through a platform like TaskRabbit or Fancy Hands, which allow you to locate people either online (Fancy Hands) or in your area (TaskRabbit) who can be hired to complete a specific project, like updating your online bookkeeping or scanning receipts. (Fancy Hands, $25-$65/month; TaskRabbit, pricing varies by task)