It is fair to say, taxes are nobody’s favorite subject. They are, in fact, an absolute nightmare.
Despite how uncomfortable the mere mention of the word tax can be, it is important that you always keep track of your ingoing and outgoing expenditure, especially when they relate to your taxes.
This article will focus on self-employment and self-assessment taxes – generally, if you work for a company, they will pay your taxes through the PAYE scheme so you do not need to concern yourself with it, when you are self-employed, however, you have to handle your own taxes.
Yes, in this article, as you may already have guessed, we are going to tell you how you can keep track of your taxes.
Keeping track of your taxes is very beneficial and will save you any bother or headache when it finally comes to filling out your self-assessment tax return – it will also ensure that everything can be paid accordingly and that you are not at risk of investigation from HMRC into why you have not paid the right amount of taxes.
We hope this page will make it a lot easier for you to keep track of your taxes. So, here is how you can do that!
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Software
Perhaps the easiest way to keep track of your taxes is through software. In recent years, handy software applications have been developed and release to simplify confusing tax-related processes. These applications, which according to keepertax.com, can help you to make savings and work out tax exemptions, are a great addition to any self-employed person’s life. There are tons of different software programs available, each with its own benefits. Be sure to carefully research and decide which one is the right application for you so that you can make the best decision.
On these applications, you will be allowed to input every single purchase and bit of outgoing expenditure. All of these can, over time, add up to a lot of exemptions. Generally, any spending you do that goes on your business and its upkeep will be marked down as a tax exemption.
So, by keeping track of all payments, you will be able to, later down the line, work out what can be made exempt from your final tax return at the end of the year. With this software, you will save a ton of money.
Accountant
An accountant is another fantastic way for you to keep on top of your taxes.
Accountants exist solely to help you handle your money and manage your taxes, so it is fair to say that they are experienced enough to be trusted with your taxes.
Accountants can cost a lot of money so you may only want to invest in an accountant if your business is yielding a lot of profits.
Accountants will advise you and help you to make the right decisions with your money. For instance, if you are looking at deadlines for c corp taxes (learn more), but don't know where to begin, an accountant could be the right choice for you. They will also, like software, notify you of any exemptions you may be entitled to.
Accountants offer the same service as accounting software does, so it is definitely worth looking into the former first.
With that said, if you, like many, are dubious of technology, then accountants are a good alternative to software.
Accountants can be, as already mentioned, very expensive. If you can afford to offset the cost of an accountant, however, then we recommend that you do give it a look.
Accountants can be found virtually everywhere, though be sure to only hire a licensed, trained, and experienced accountant so you can save yourself time, effort, and potentially money.
You can also consider hiring an accountant which provides remote bookkeeping services through technologies such as QuickBooks Dedicated Server Hosting (learn more) and Virtual Cloud (learn more) Desktop etc.
Spreadsheets
If you do not want to spend any money calculating your taxes, then you may want to think about creating a spreadsheet. Spreadsheets can be very effective, providing you know how to create and use them (which a surprising amount of people do not!).
Spreadsheets can be made with programs like MS Office. There are alternative programs that you can use, though generally, MS Office is the leading program, mainly because of how advanced and how useful it is.
Creating a spreadsheet to keep track of your taxes is a good idea, but you must arrange it and organize it meticulously.
If you do not organize your spreadsheet properly, come self-assessment time, you will find yourself in hot water, and will have to frantically sort through all of your spreadsheets and try to discern what is useful from what is not.
Be sure to label your spreadsheet properly and create different pages for different things.
Additionally, keep a spreadsheet that keeps track of all of the incoming payments that you have received to your account.
Doing this will help you to discern what is taxable income from what is not. If you are up to the challenge, a spreadsheet is a cost-saving method of arranging your taxes.
Organize Your Receipts
Organizing and keeping your receipts will help you massively when it comes to self-assessment time!
Organizing and arranging your receipts will enable you to discern what is a business expense from what is not.
Unfortunately, many people have a very bad habit of throwing their receipts away or just not keeping them at all.
There are a lot of exemptions that you can be entitled to if you hold onto your receipts. Keep a folder, or at the very least photos, of your receipts for tax time.
Quarterly Estimates
You may need to file quarterly estimates, depending on where you are in the world. Quarterly estimates are something that you absolutely must keep on top of because if you do not, you can find yourself subject to fines and penalties, as well as the possibility of prosecution.
Be sure to always keep your quarterly estimates in order, and file them regularly (if you have to, that is).
Generally, you only have to file quarterly estimates in the United States and not in the United Kingdom. Do your research and find out though.
In this article, we hope to have explained to you how you can keep on top of and track your taxes.
Taxes can be very confusing so we hope to have simplified it a little bit for you. Thank you for reading – please visit us again soon.