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Taxes - Starting the Year off Right. Sitter Tips?

asked 2017-01-29 11:00:28 -0500

This is not a forum for professional tax advice.
However, it might be helpful for seasoned Sitters to offer tips and suggestions for what they do during the year to make tax time easier. What systems have you created? What has worked? Any pitfalls for new Sitters to be aware of?

I use an accordion-style file folder with tabs for each month, where I keep receipts attached to stay information for things like supplies, etc. I try to keep things organised so that as things get complicated, I'm already caught up and can easily hand it off to a preparer if I choose to at the end of the year

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3 Answers

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answered 2017-01-30 06:25:54 -0500

Mileage can be a huge deduction against earnings if you drive a lot for your business, I drove 40+miles each Mon-Fri providing walks to my recurring clients. I recommend getting a smart phone app to capture and classify your trips so you have an IRS compliant log. I use and love MileIQ, not free, but worth the annual expense.

https://www.mileiq.com/

For my income and expenses I capture them in Excel and file hard copy receipts, being ready for tax season is a breeze.

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An app sounds simpler than a trip log binder. Good idea. Question: do you log the mileage when you're housesitting as well?

Moureene T.'s profile imageMoureene T. ( 2017-01-30 09:32:48 -0500 )edit

Have you tried the QuickBooks self-employed app? I'm doing the month trial and it has 'mileage auto-tracking', which gets put in with all of your other costs, etc. You can even enter gas info. One app for expense and mileage tracking! :)

Moureene T.'s profile imageMoureene T. ( 2017-01-30 14:50:15 -0500 )edit

MileIQ tracks every drive I make, at the end of the day or end of the week if I'm lazy I categorize my drives, you can set up your work hours and personal hours so you get some level of categorization. My business is too small for QB and a little more expensive than MileIQ

Walt G.'s profile imageWalt G. ( 2017-01-30 15:44:02 -0500 )edit

QB has different sizes to choose from. I chose the one that tracks expenses, tracks mileage and separates business vosts from personal. $5/month for the 1st 6 months. $10/month thereafter

Moureene T.'s profile imageMoureene T. ( 2017-01-30 16:18:18 -0500 )edit

Hey Walt, I've been trying out Hurdlr. It's like MileIQ and QB combined but it's super easy and free. I also love the way the mileage tracking part is so easy and unlimited. I think I've found my app! And saved $$

Moureene T.'s profile imageMoureene T. ( 2017-02-12 11:11:36 -0500 )edit

Thanks for the tips Walt & Moureene! I'm new to the business so this will help!

Kimberly L.'s profile imageKimberly L. ( 2017-06-24 19:33:51 -0500 )edit
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answered 2017-02-02 11:54:02 -0500

Good tips already. I would add that you should set aside 20-30% of your income for self-employment taxes. If you make, or plan to make, more than $400 with Rover/DV/etc you should pay estimated taxes 4 times a year. You are required to cover 80-90% of your previous year's tax amount either through withholding or paying estimated taxes, otherwise you'll get hit with a penalty when you file your 1040. Voice of experience - I paid a penalty last year because I didn't pay in enough estimated taxes.

You can also use the EFTPS website to pay at any time. www.eftps.gov.

The Electronic Federal Tax Payment System (EFTPS) is a free service from the U.S. Department of the Treasury. Since it began in 1996, millions of businesses, individuals, federal agencies, tax professionals, and payroll services have used EFTPS.

All federal taxes can be paid using EFTPS. You can make payments via this Web site, a voice response system, or special channels designed for tax professionals, payroll services, and financial institutions.

Quick, secure, and accurate, EFTPS is available by phone or online 24 hours a day, 7 days a week. You can schedule business and individual payments up to 365 days in advance.

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Huge tip! Thanks! :)

Moureene T.'s profile imageMoureene T. ( 2017-02-02 11:58:13 -0500 )edit
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answered 2017-01-29 15:40:15 -0500

Throughout the year, I use Google Sheets religiously to keep everything in order. I have a sheet for each month listing my payout by day and by business (I am on Rover, DogVacay, and I also pet sit for a local small business). Any time I purchase something (other than gas) that is business related (such as dog toys or treats for gifts, my CPR & First Aid certification, books on pet-sitting or other dog-related educational texts) I enter them on a monthly spreadsheet with their description and total cost. For the hard-copy receipts, I keep them in envelopes labeled by month in case I need to reference them. In my car, I have a clipboard with a mileage spreadsheet to keep track of miles driven to and from M&Gs, drop-ins, and walks. This spreadsheet also contributes to noting what percentage of my car's upkeep expenses I can claim on my taxes (using the beginning and end of year mileage) and makes calculating how much of each gas refill I've used for visits simple. I have a notebook where I tape each gas receipt in, note the price of gas, date, and MPG, and then by date I list how many miles were driven for each business (Rover, DV, small business) for every day that correlates to the gas refill that was used. With this, I can determine the cost of the gas used for business, which can also be claimed on your taxes. Personally, I use TurboTax, though it is important to note that you have to purchase TurboxTax Home and Business, so there is a little bit of an expense there.

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I have no idea what Google sheets are

Moureene T.'s profile imageMoureene T. ( 2017-01-29 15:44:51 -0500 )edit

It's basically Excel, except it's online through Google (free) and so you can access it anywhere.

Hillary H.'s profile imageHillary H. ( 2017-01-29 15:57:41 -0500 )edit

Nice! I love this thread already. I learned something useful that I can use. Also going to put a trip log in my car. So much more convenient

Moureene T.'s profile imageMoureene T. ( 2017-01-29 17:07:02 -0500 )edit

Edit: Hillary, have you looked into mileage tracking apps?

Moureene T.'s profile imageMoureene T. ( 2017-02-03 11:48:20 -0500 )edit

I did test out the MileIQ at one point last year, but after the trial, I didn't purchase the full version. Have you tested any out that you particularly like?

Hillary H.'s profile imageHillary H. ( 2017-02-03 14:20:10 -0500 )edit

I think that I like the Quickbooks app. I'm trying it out free for a month

Moureene T.'s profile imageMoureene T. ( 2017-02-03 14:46:28 -0500 )edit

I've been testing out Hurdlr and really like it. It's easy and it's free

Moureene T.'s profile imageMoureene T. ( 2017-02-12 11:09:28 -0500 )edit

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