Keep Good Records to Make Tax Time Hassle-Free
With the new year upon us, it's time to think about the financial side of your tutor business. It's important to keep good records throughout the year so that when tax time rolls around, you can get ready to write Uncle Sam that check with as little hassle as possible. Here are the steps I take to keep my business finances neat and tidy:
1. Track Monthly Income
Each month, I print out my bank statement and match up my deposit receipts. Then I enter them into the computer with categories attached to each deposit. I use different categories for each student that I tutor so that I can easily make a yearly invoice for parents.
2. Track Monthly Expenses
I am in the habit of saving every receipt. When I got married, I never did that! My husband insisted that I start saving them. I am so glad that I have this habit now. At the top of my receipt, I will write down quickly what category the items that I purchased fall under. At the end of the month, I enter the transactions into the computer and attach the correct expense category. This helps me at the end of the year to total all of my various business expenses.
If you are not sure what qualifies as an expense, check out my more in depth post about tutor tax tips.
3. Keep a Budget
“A budget is telling your money where to go instead of wondering where it went.”
― Dave Ramsey
Debt is not part of my business plan and I hope it's not part of yours either. Always strive to keep your income above your outgoings. Spend less than you make. You can download a free tutor budget here. You can find lots of free resources right here in my blog shop too!
How do you take care of your tutor business finances? I'd love to hear your thoughts.
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