How do you prepare your home-based Massage business for tax season?

[Tara Creech]

I'm getting ready to open my home-based business in a couple weeks and I'm looking for advice on how to prepare my receipts for taxes. Because the business name is my name only, I only have to file yearly on my personal taxes. I've been told to use manila folders or an accordian file folder to keep things in order. How do you do it?

 

[Judy]

You'd be wise to talk to a tax professional first to see what records to keep.

Keep very good records of all of your income and of any associated expenses (supplies, for example). Keep receipts for expenses. Accordian files with a slot for each month work well, things aren't as likely to fall out and get lost as with manila folders.

For the income, probably the easiest is a receipt book from an office supply store that makes two copies, one that you tear out and give to the customer, one that stays in the book for you.

If you're going to owe over $1000 total federal tax when you file your annual return, you are required to file quarterly estimated returns and send in tax money with those. If you have state or local income tax where you live, you might have to make quarterly payments there also.