What should new contractors do starting now to be better off next year?
A: The biggest thing you can do to start next year off on the right foot is to get organized, start properly documenting all your expenses and keep clean records. There are multiple ways to do this — for example, you could:
- Save all your receipts in a fire-safe box, or scan them into a file on your computer.
- Write down the purpose of your business trip or expense on the receipt.
- Take pictures to bolster documentation — this is especially relevant if you want to claim your home office space next year.
- Be specific — include dates, names and places — you won’t remember these a year from now, so make it simple by capturing everything while it’s still fresh in your mind.
- Use an accounting software like Intuit’s QuickBooks Self-Employed so you can automatically track and organize your deductions and easily and accurately export your information to your schedule C in TurboTax at tax time. There’s no need to know tax laws or forms.
- Use QuickBooks Self-Employed and TurboTax do figure out your quarterly estimated taxes if you think you will owe more than $1,000.