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Tuesday, July 4, 2017

Seven Tips for Singer Taxes: Tip #7

And here we have yet another article in the Seven Tips for Singer Taxes series. Thus far we've covered some basics and six of the seven tips:
Tip #1: Keep a log of all your income.
Tip #2: Put all your self-employment income into a separate checking account.
Tip #3: Only use your business checking account for business.
Tip #4: Save for and pay estimated taxes.
Tip #5: Track mileage.
Tip #6: Claim a home office expense.
Sounds pretty good so far, right? But I'm sure that I've opened up far more problems than I've solved thus far. That brings us to the final tip!
Tip #7: Get help and be consistent.
Yes, you're going to need help, and help is worth paying for.

A lot of singers use a tax professional, and I highly recommend this. They give way better advice that I can give you in a few internet tips (or anyone from Google). They will know all the current tax law, will be able to handle the subtleties and forms for everything I've mentioned, and far more.

If you need a recommendation for someone in your area to help you, get in touch with me and I let you know where to look.

But remember this: This is your business and these are your taxes. If done wrong, the IRS won't come after your accountant, they will come for you. Even when you have a professional on your team, make sure you understand everything that they are doing for you, and do not sign until you do.

You will also need to be diligent with your recordkeeping throughout the year, with your receipts, mileage, income, etc. Often, accountants charge per hour, and singers are incredibly complex income situations. The more organized you are when you approach them, the easier it is for them to do their work, and the less it'll cost you in cold, hard-to-come-by cash.

That being said, I've done my own taxes every year for the last fifteen (or more) years, without the assistance of an in-person professional (except that one memorable year). To do it, I use a combination of Quicken, spreadsheets, and TurboTax.

Quicken downloads my banking information and lets me put everything into categories. It's also my primary, household budgeting software, so I'm using it a few times every month.

I use Quicken because I've been using it for many years now and I have tons of data that I can draw from in there. But there are several great options!
  • QuickBooks - a more complete business-oriented solution (probably a little more than signers actually need). Made by Intuit, the same company as TurboTax and (at one time) Quicken. More expensive than Quicken.
  • Freshbooks - similar to QuickBooks, but newer on the market and cloud-based.
  • Mint - Intuit actually sold Quicken to another party in order to turn their acquisition of Mint into their primary household budget software. It's "free," but I found it wasn't as thorough as Quicken, and I got really tired of the ads.
  • EveryDollar - This web- and app-based budgeting software from Ramsey Solutions promotes a "zero-based budget," which is something I do at home. It's free, but to really get the most use of it you'll probably want to spend ~$90 per year to connect your bank accounts.
  • You Need a Budget (YNAB) - There's a small, monthly cost to this service, but those that use it swear by it.
  • Buxfer - Another newcomer to the scene which uses "tags" instead of "categories." It's free for the first few accounts, including bank connectivity, but adding more accounts costs a bit per month. 

In April, I export the hard data from Quicken. I use CSV files for this, and I export everything for that year. Then, I put all that into spreadsheets so I can organize the data a little easier, adding in several tabs of information from various sources.

That includes 1099s, W2s, income logs, expenses data, mileage logs, home office expenses, and so on. Basically, I have tabs for everything that I've talked about in these tips.

Then, I boot up TurboTax. I've long since graduated from the cheap versions of TurboTax - my current one is called "Home & Business", because that one can handle Self-Employment income. I tend to buy it in the beginning of the year, when it's on sale. It runs around $65, typically.

Whether you use a professional or TurboTax, though, it becomes important to be as consistent as possible from year to year. If you use a professional, keep going back to that same person (assuming you like their work), and develop a relationship.

Using TurboTax every year, it picks up information from the previous year's return and uses that to help generate the current return. Plus, I know exactly all the steps I'll be going through, and can have my information ready to go even before I install the software.

Eventually, the whole process becomes like a well-oiled machine. After several years of practice, taxes are far, far less intimidating now. So be diligent, be thorough, and know that it gets easier from here!

I hope you've found these Seven Tips helpful! If you have some of your own suggestions, post your comments here on the website, or in YouTube, on the facebook page, or in Twitter. Be sure to subscribe and "like" any of those. You can also read all eight of these articles here at Singerreise.com, the official website.

Finally, Singerreise is very costly for me to maintain, in terms of the monetary resources needed to keep it going but especially in time. Each week requires 15-30 hours of work, and sometimes that's just for a single video and article.

Please consider supporting Singerreise by contributing at Patreon.com/singerreise. Without your support, I'll eventually have to shut down Singerreise. But with your support I can keep it going indefinitely! So please, head to Patreon and hit that "Become a patron" button. There's a ton of patron exclusives waiting for you there, too!

Thanks for reading!

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