Question of the week (April 27th)
Submitted by: Meghan T.
Owner at Hogan Made
Q: Hi Taxes Tampa,
I own a small retail business that I run out of my home. I have an online store and I am a vendor at several markets around town. When I prepare my taxes, I get confused as to how to categorize my purchases. Most people have paper, paperclips, pens and pencils. I have tents, tent weights, tables, screen printing equipment and art supplies. I figured as long as it’s all there and not counted twice, I should be good, but I feel there has got to be a better way!
Another question I am interested in hearing more about is how do I draw a paycheck? Every time I start looking into this, I get overwhelmed with information and I would love for some tax fairy to give me simple, step by step instructions that I can understand!
How can I better prepare myself during the year to do my taxes during tax season? I always feel so disorganized while sorting through my piles and files. Do you have any suggestions for how better to prepare all my documents?
A: Hi Meghan!
There's many reasons why this is a great question but mainly, it hits many valid concerns from other local businesses ranging from payroll to bookkeeping. First, let's address your question regarding classifying your multitude of supplies. I would say labeling things based on simple terms such as 'job supplies' or 'cost of goods sold' would be easiest for your record keeping. Anything used in the production of your quality t-shirt's such as ink and/or labor costs would be labeled COGS. Things such as your tents and weights would be job supplies. Using standardized terms used on tax returns will streamline your year end process.
Hopefully the below video will help assist in your first venture into self payroll preparation:
Lastly, having a spreadsheet where you maintain all your records will be key to staying organized. I recommend keeping all of your receipts but updating the spreadsheet regularly if you choose to forgo spending money on an accounting software such as QuickBooks Online. On this spreadsheet, we recommend tracking your business expenses, mileage and home office expenses in order to accurately capture all transactions and to make tax season less intimidating.
Thanks a ton for your question Meghan! For your participation, we will be sending you a custom spreadsheet to make both payroll and bookkeeping simpler for your business.
About Hogan Made:
Hogan Made creates Tees for YOUR community! We use local landmarks as inspiration to create our original tee designs and we use premium quality shirts to provide you with the best shirts in the Tampa Bay Area and beyond!