How I File My Taxes for Multiple Businesses
I wrote a post on blogger tips for filing taxes in this post a few years ago. Since then, a few things have changed. I now own two businesses- my blog, Laura Lily LLC, and an investment property. My beloved condo in Encino, California which was featured in all of my home decor posts from 2016 to the beginning of 2020.
Organizing Your Expenses
Over the last year years, I have found that the easiest way to organize all of my transactions with one business is with Quickbooks Self-Employed. This program links to all of the bank accounts, debit and credit cards you chose, and pulls in the transaction history. From there, you can categorize different personal and business expenses. I spend every Monday going through the previous week’s expenses to categorize them. From there, I can pull a report for different time periods (last 30 days, 90 days, year to date, or last year) and send those reports to my accountant.
The disadvantage of this Quickbooks Self-Employed program is that it does not have an option to file expenses for more than one business. This year I ended up tagging all of my investment property transactions in the Quickbooks Self-Employed program and filing those into a separate Excel spreadsheet.
However, I had a call with Quickbooks about this issue and they recommended their Simple Start Program which I will be starting this year. This allows me to file transactions, write invoices, track taxes for an unlimited amount of businesses. The Quickbooks self-employed program is $10 a month, where the Simple Start program is $25 per month. Quickbooks also offers other subscriptions with more features (payroll, W2’s, etc.) The best part is, you can have all of your logged transactions moved from one program to the next.
Using a Certified Public Accountant
There are plenty of people who do not mind doing their own taxes. I am not one of those people. For the last 5 years, I have used a CPA (certified public accountant.) One that personally owns his own investment properties in California and is therefore very familiar with the tax laws in our state. I found him through a referral and would give out his information except that he is currently at client capacity. Otherwise, my recommendation is to ask around for credible CPAs with knowledge in the areas you need it.
I find the $450 dollars I pay him to do my personal taxes and another $450+ to do my business taxes is money well spent to save me from the headache and frustration of trying to do my own taxes with two or more businesses. Plus, he knows the tax laws much better than I ever will and can make recommendations based on my current or upcoming situations.
Planning for the Future
Speaking of upcoming situations… In previous years, I had filed my taxes to get the biggest refund possible. Taking every legally qualifying business expense I could. However, that changed when I decided to buy my first house last March. In order to do that, I had to show the bank I made enough money for the monthly mortgage payments. That meant cutting down my business expenses as much as possible to show a max net profit. As my accountant put it, ” The more taxes you pay, the more property you can buy.” This year I will be following that same guideline as I would like to purchase another income property by the end of the year.
Another handy feature of the Quickbooks Self-employed site is the ability to create, log and send invoices. You also have the option to send reminder emails and track which expenses have or have not yet been paid.
Overall, it makes your life easier if you keep on top of your expenses throughout the year instead of trying to remember what a charge was from 9 months ago. Plus, it helps you track your spending and catch miscellaneous charges you may have other wised missed. My recommendation- if you are not comfortable doing your own taxes, or if they are a bit more complicated than just a W2- hire a certified accountant to help you.
I would just like to wrap up this blog post by stating that I am not an accountant nor any kind of financial advisor. These are just a few organization and tax filing tips I have used as someone with multiple businesses. Also, this post is not sponsored, these are simply products I use and recommend. Use this code to get 50% off of Quickbooks self-employed for six months!
Thank you for reading,