Here is a handy checklist for your end of year prep...

1. All transactions logged and categorized. Make sure your cost of goods (COGS) and operating expenses are separate categories.

Tracking transactions is easy when you connect your business bank account to an accounting software like QuickBooks. We use Waveapp because it's free. Another reputable platform in Freshbooks.

2. W-9s and W-2s - if you have employees and a payroll provider, they take care of the W-2s, but not always the W-9s. Make sure you have a W-9 for every contractor you hire, if the expense goes through your business banking.

3. File all your receipts. The above mentioned accounting platforms all have a feature that allows you to take a picture of a receipt and log it so you don't have to keep the paper copy. But I don't recommend throwing out the paper copy even if you use the photo feature.

Make sure you file any receipts for charitable donations separately, including 'in-kind' donations. The latter is an estimate of cost for intangible services rendered for a non-profit. In-kind donations should be based on your normal hourly wages or flat rate.

4. Pay your quarterly estimated tax. If you're an LLC (pass through entity) and you pay yourself directly out of the biz bank account, then you should be paying estimated taxes every quarter, unless you're operating in the red and reinvesting everything back into the business.

5. Pay all outstanding invoices and bills. The more expenses you can write off, the lower the tax bill.

6. Reconcile bank accounts. Make sure your debits and credits equal the current balance on your account and everything that went through the account is correct.

7. Make sure you're writing off everything you can. This will bring your taxable income down.

8. Calculate the depreciation of your business assets. This is for equipment like a car, manufacturing equipment, computers, etc.

Here is some info on how to do this:
https://www.freshbooks.com/hub/accounting/calculate-depreciation

9. When in doubt, hire a bookkeeper. Remote bookkeeping is big on the gig economy. You can find bookkeepers with 5-star reviews on Upwork.

Some tips for the coming year:

• Track all the mileage you put on your car for business using an app like MileIQ. You'll be able to download an end of year report and write off thousands.

• Open a separate bank account for your business. If you're just starting out and using your personal account to cover costs, stop that. Get an Employer Identification Number (EIN) and open up a separate bank account, even if it's a separate personal account for now.

Once you connect that account to your accounting software, categorize any money you put in as "owner investment".

• Find a good local accountant. Turbotax is a rip off and H&R Block doesn't deal with business tax filing.

Start shopping around for an accountant you can meet with in person and who belongs to office with a tax lawyer on staff.

• Register as an LLC with your state as soon as you can.