About Record Keeping and Taxes

Federal income taxes, state income taxes, city business license tax, sales tax, payroll taxes, wow!  Taxes and recordkeeping can be quite a load. Your record keeping will make or break your business success.  Setting your books up correctly from the start will make everything easier when it becomes time to prepare your taxes. Here are some keys to success: Open…

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Do I Need an Accountant and a Bookkeeper?

Unless you’ve had a lot of experience with taxes, you may want to have a tax preparer complete your first year’s tax returns.  In subsequent years you can often prepare your own taxes by following last year’s example. I have found that after the chart of accounts has been set up properly your bookkeeping system simply requires maintenance. Bookkeeping software…

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What Should My Chart of Accounts Look Like?

Since the 1040 Schedule C is your basic profit and loss statement, I set up my chart of accounts to match the Schedule C as closely as possible.  You should need very few categories that aren’t listed on the Schedule C.  If your state has a sales tax and you have differing tax rates in your area you should break…

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Do I Need to Keep a Mileage Log?

Yes.  At the time of this writing, IRS Form 2106 instructions (for 2008 returns) had this to say about record keeping for your vehicle: “You cannot deduct expenses for travel…unless you keep records to prove the time, place, (and) business purpose…of these expenses.” I keep a small spiral notebook in the visor of my truck.  Each morning I list the…

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Are Labor and Materials Sales Subject to Sales Tax?

Since every state has different guidelines, the best suggestion I can make is to use the local state sales tax office as a resource and follow their instructions to the letter.  I am lucky enough to have a state office located in our city so I opened my account in person and asked a lot of questions. Collecting the correct…

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How Should I Manage My Money for Taxes?

Many business people have found that in their first year in business, the biggest challenge is keeping the doors open and paying the bills.  The second year another problem arises…how to pay all of the income tax!  Because there is a lot more money flowing in the second year they find themselves spending too much and having too much fun. …

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Can I Open a SEP-IRA Retirement Account?

According to the IRS; businesses, corporations and self-employed individuals can open retirement accounts including the SEP-IRA.  As a self-employed handyman the amount you can contribute is dependent on your profit for the year. It is not easy to calculate your allowable contribution.  Always looking for a bargain, I opened a SEP-IRA at one of the large discount mutual fund families. …

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About Invoicing and Billing for Handyman Work

To promote a professional image and set yourself apart from your competition, you must use a professional looking invoice.  Customers appreciate having a paid invoice and you will find that all commercial work will require it.  The invoice that I use carries my logo, name and address, and has a place for the customer to sign that they have accepted…

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Will I Get More Business If I Accept Credit Cards?

I haven’t had a single customer ask if I accept credit cards. I don’t think they expect me to.  But I do offer the option and I think it brings me more business. There are some compelling reasons to invest the money it takes to have a merchant account.  People will often have you do more work if they know…

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What About Billing Customers for Completed Work?

If it brings you more business, just say “Yes.”  This has come up in three different situations.  When I’ve done commercial work, work for a property management company or while doing pest repairs for real estate agents. The problem with billing customers on account is the time delay in receiving payment.  Commercial accounts often take up to 90 days to…

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