I started selling cakes this year i have everything legal but now the book keeping part Ha ha the hard part I have talked to H and R Block about what i need and thay told me to keep records and bring in just my numbers next year well thats no help.
what can i claim as an expense and stuff please help I really cant hire an accountant until i make enough money to keep me going
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You can deduct anything that you use to operate your business like ingredients, car mileage, office supplies, postage, magazines and books for reference, equipment, etc. Some peope deduct their utilities as a percentage of how much you use in your business vs. for your home use, but I don't bother doing that because there's no way I could figure it out and have it stand up in an audit!
Get a copy of Turbotax that has the small business section on it, go through that and it will give you an idea about what you can deduct and what you have to depreciate, etc. The IRS website might have some lists of acceptable deductions, too. www.irs.gov
I am no help to American taxes as I live in Canada.
Somebody came into my home to assess what portion of my house is business-related and gave me that figure as a percentage and placed a value on that. So an YY portion of my home value is for business, and YY multiplied by my home value is the value of it. That is the value I pay property taxes on, and the percentage I can claim of my mortgage and electric charges. I have a cell phone as a business line, etc.
I find that going through the Canadian income tax package for small business is pretty straight forward. You can also file for an HST account if you are charging taxes on things (cakes themselves are NOT taxable but delivery is), and if you pay out more hst than you charge then you get a credit for that overpayment.
This is my first year doing it as well, so hopefully it is as easy as I make it sound! lol!!
business cards,flyers,inks,printer,computer...you take a cake somewhere to help advertise...if it was a freebie, jot down the value of it...it's advertisement....I tally throwaways...whether it's from customer not picking it up or accidents...these are losses....when creating new formulas or designs...keep track...these are R&D...when you order something online and don't pay sales tax...you'll have to pay that when you do your state sales and use tax...
it'll help tremendously at the end of the year if you've managed to keep the numbers separate...in a ledger...matter of fact, a business ledger has everything listed and you insert your costs for "supplies", "advertising", ... onto the appropriate line. Then, at the end of the year you can tally up the line for each month...just keep your receipts to back up the numbers you have listed...you get audited...just give 'em the book and a pile of receipts.
If you get a program like Quicken or Quickbooks (Quicken may be more for personal use, but it is easier for non-accounting people to use) you can enter your expenses and choose categories for them so you can keep things organized. At the end of the year you can run reports that will give you all your totals! You can keep all your receipts, but you don't have to do all the tallying, etc.
ditto what everyone else said on expenses - but if you don't want to go for a software program, there are a few options.
1) Buy some large manila envelopes (and track the cost - this is a business expense)
2) Buy a spiral notebook
3) On every envelope, staple on page of notebook paper. On the top of each page, write a category. "Food supplies, hard goods, disposables, rent, gas, electric, advertising, etc."
4) Every time you spend $$ for the business, write it down on the paper, and put the receipt in the envelope.
Some people call this the shoebox approach. As an accountant, I call it the "at least they have all their receipts" approach.
I know some people will disagree with me (rightfully so!), and say that if you are running a business, you should do it 100% correct, with the software. But, if you don't like software programs that you need to update monthly, this is an option to track your expenses, and keep your receipts together.
tagtan,did you get the spread sheet i sent you?