well, it’s that time of year again.  time for indie businesses to shed tears over tax forms and grow a few grey hairs.  though many of you may decide to hire a professional to do your taxes, after doing a little homework you may be able to do them yourself, in true diy style. our previous shop help post on separating your finances is a good place to start, do you remember it?

wagon wheels

though we may start out on etsy to fuel a hobby, the reality is, as soon as you sell your first item, you’ve become a business.  it’s important to stay organized and file correctly.  to help, etsy has partnered with booking business outright.com to try to make filing taxes for indie businesses a little simpler.

printemps

if you’re in the u.s. and are selling on etsy, you must file a schedule c with your income taxes (unless you’ve incorporated).  if you would like to read more on if you qualify as a hobby or a business, outright has a great article called, “business or hobby?“.

good karma

the truth is, no matter how much money you make (even if it’s just a little!) you’re still a business.  outright.com simplifies tax forms and hosts everything online which makes the headache of taxes a little less ‘taxing’.  from providing a mileage calculator to deduct your expenses to help with filing for your consultants or contractors, outright is worth any indie owner looking in to.

i stand each day by the shore

rather than list them here, i’m going to send you over to etsy to read outright’s top ten tax tips.  it’s helpful and informative and definitely worthy of a read.

elise

next i’m going to send you over to jjm finance’s forum post about filing taxes. he provides links to answers on just about every possible tax question you could have.  it’s a great one-stop place to find all the relevant info you may be looking for.  from which forms to fill out to help with deductables to how to contact the irs, it’s got just about everything.

here’s the article:  u.s. tax guide (irs)

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honestly, this articles was difficult to write.  as finance and accounting were not my best subjects i would love to hear from you who have success with doing your own taxes.  any experts out there?

xo! bonnie

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let’s talk finances! tax season is just around the corner, so i thought it time to start easing into to the money mindset.  we’ll start simple though, don’t worry!

singing in the rain umbrella

this article about business growth by amandadailyworth outlines the reasons why you should carefully separate you personal finances from you business finances.  as i did, i’m sure many of you started your etsy shop as a hobby, as a way to ‘get your toes’ wet and see how things went.  however, soon the sales start rolling in and you are now in need of a website, business cards, more supplies, and maybe you’re even some advertising around the web.

doll parts print

a simple, free and very important step to take is to open your own business bank account.  this way, you won’t be dealing with a tangled account of not really knowing what money is going where, let alone where it came from.  when it comes to tax season, it can take days to filter through one account, trying to separate it into your personal and business expenses.

happy bunny

sharing one account for your personal and business expenses will not only make taxes difficult, but will also make proving your income difficult.  when you’re revenue goes into the family account and your using a personal credit card for your business expenses, you can see how quickly confusing it can get.  and, if you’re planning on buying a new home or getting a loan from your bank- it is essential to be able to prove your income.

kitchen aid mixer felt coasters

you should know that it’s time to open a separate account when you start to loose track of how much money is going in or out.  when your budgeting gets overwhelming and you start to loose track of your receivables.  you need to run reports to see your expenses vs. your income but you can’t because the data is all mixed together.  before you get to this very frustrating and time consuming point- consider opening your own account.

two hundred two – hand sewn silk mobile

ready to get started? first visit your bank and open a free business checking account.  get a separate credit or debit card to use for only business-related expenses.  and, i think it’s a good idea to keep your paypal account separate as well.  if you don’t know how to do the bookkeeping yourself, consider hiring an accountant to manage it.  having monthly profit-&-loss statements at your fingertips is invaluable.  the first step in having a successful shop is understanding your finances and which areas are performing well.

1950 barra randonneur bike print

speaking of finances, daily worth is a free daily personal finance email for women.  they deliver practical tips, empowering ideas  and the occasional kick in the pants!  you can sign up here, and also peruse their website for a number of great articles regarding finance.

have you ever noticed that you can download your sales data, right from etsy?  go to ‘your etsy’ then ‘sold (orders)’ then scroll down to the bottom to find where you can easily download all of your sales data to help ease the task of managing your finances.

lambswool elephant – eco friendly

finally, have you heard of mint.com? it’s a free website to help you manage your money.  you can divide all of your expenses into categories, budget your money, find savings, and start to understand your finances better.

what is your advice? do you have any tricks or suggestions on how to better manage your finances? please share with us in the comment section!

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