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Five Things To Do To (Or For) Your Accountant At Tax Time

Kristen Fischer

When I came up with the headline for this article, I figured that many freelancers are so busy that they probably don’t have any time to organize their tax information before they hand it over to their accountants. We’re all so focused on our businesses—who has time to do nice for their accountant? You do, actually. And the payoffs could be big!

It really doesn’t take much to get things together to make things easier for your accountant, and perhaps save time. If you’re like me and you toss pay stubs and receipts into one large envelope during the year, you may want to break things up so your accountant can easily work through your taxes. This saves your accountant time, and it saves you money. Also, I don’t use anything fancy for invoicing (something I need to change, I suppose) but even organizing your Quicken files can be a huge help for the accountant, save you money, and offer more time for you to ask questions and help your business.

You’ll find that little things will make tax time much more manageable for you and your accountant. Here are some easy things you can do to get organized.

Sort your receipts. There’s no reason for your accountant to have to sort through your personal receipts. I always make sure to sort my gas receipts into one pile, and make sure my postal service receipts are in another. Make sure you highlight what items you purchased you are claiming as a deduction—some receipts include other merchandise you purchased that’s not eligible for deductions. I then add up the amounts and put them on a sheet of paper for her stating how much I’m claiming under the various topics.

Sure, I could just let my accountant do it all, but then I’m paying her to sort through my receipts. Who knows if she’ll need to call with questions, which takes more time. This is why it’s good to do whatever you can yourself—you’ll save money!

Compile forms. In the United States, we have a form called the 1099 that explains how much you’ve made with a client for the year. In my case, I haven’t been taxed on these amounts, so I need to make sure I collect all of them (one for each employer, in many cases) before calling in my accountant. I simply put them together with a paper clip and add up the total amount they come to.

I also give my accountant a spreadsheet of what I’ve earned. Some of the amounts there do not have corresponding 1099 forms, so I’m careful to mark them so my accountant can add things up. I also make sure to give her bank and asset statements from the year that cover things like my IRA and CDs. I like to give her all the background materials necessary in one shot.

Question everything.
One thing I do each year is make a list of questions for my accountant. This includes questions on things that I’m not sure if I can deduct. This year, for example, I’ll be earning royalties on my book, so I’ll be sure to ask her about that. I also purchased my first home, and there are tax programs that will aid me tremendously.

Think about things you purchased and life events that could change your tax status. Ask your accountant about purchases that you can depreciate over the years. Always make sure to ask when you have any questions—this is what you’re paying the accountant for!

Do your research. For things like healthcare, I always make sure I have all my checks together. I go to the pharmacy, which prints out a list of my co-payments for the year. You may have purchased some business-related books on Amazon that you don’t have receipts for. Anything that could be online or that you don’t have the receipts for, take the time to get those numbers together.

For example, I can deduct the cost of my contact lenses, so I’ll be over at 1800contacts.com to get a yearly statement showing how much I have paid. Little things pay off, especially when you can only deduct them in a year’s time.

Get an accountant. This sounds pretty straightforward, and it is. But it has to be said, because there are so many people who think they can do their taxes on their own, or using a do-it-yourself software program.

I believe anyone who considers her or himself as a business should practice like a business. This includes hiring out a professional who can make sure you’re getting the most out of your deductions and tax standing, someone who can help you institute sound financial practices, and someone who can make sure you’re in compliance with laws. For a hundred or just a couple hundred dollars, you can hire someone who will help you do all of this.

So once you find that accountant, consider taking time out to make sure you’ve got everything together so you can hand it over in one shot. Yes, you pay this person to do the work, but you can simplify his or her job and save money by preparing your statements and deductions. That way, you can rest assured that you’ve done everything necessary to make tax season as breezy as possible.

Got a tax tip to share? There are plenty out there! Post a comment!

Kristen Fischer is a freelance writer living in New Jersey. Her first book, Creatively Self-Employed: How Writers and Artists Deal with Career Ups and Downs is available at www.creativelyselfemployed.com. Her second book is due out this Spring.

Leave a Comment
  1. Amazing stuff! I have , I have learned that research is very very crucial. The more the merrier.

    Thanks Kristen

    Keep Rocking!

    Aloke Pillai

  2. My Accountant gives me a ‘Tax Workbook’. Its like a fill in the blank homework sheet from the 2nd grade - but for my income, expenses, deductions, etc. And since I’ve been working with this Accountant for a few years - it has become slightly customized for my business. And all the expenses from the past years are listed for my reference.

  3. In seeking an accountant, ask for referrals from other independent professionals in your line of work. Accountants do understand general accounting and business - but it will be a huge advantage to you to be working with the accountant who truly understands the idiosynchrocies of YOUR business. I’m so pleased I found an accountant who specializes in “creative types” and focuses his efforts on serving the specific tax/accounting needs of such individuals.

  4. I haven’t hired an accountant before and had thought I could do it solo this year (the first time I’ll be doing tax as a self-employed person). But now I’m not so sure. I guess I’ve just got no idea how to find a good accountant who understands the kind of work I do. If anyone can recommend me one in Melbourne, Australia, that would be very cool ;-).

  5. also… buy him a cake and some really nice coffee. only once a year. but he’ll remember you and it’s a nice thing to do.

  6. Thanks for posting this — the day AFTER I met with my accountant! :)

    I agree, it’s definitely worth it for freelancers to hire a professional accountant; there’s a huge benefit in terms of peace of mind, and they may even be able to help you dig up enough extra deductions that the tax savings will pay for their services.

  7. i highly recommend an accountant and am glad you enjoyed the post. you could find some silly little deduction that will save you quadruple or more the cost it takes to hire an accountant–so worth it.

  8. Regarding getting an accountant, I couldn’t agree more! After 20 years of being self employed, I decided I could do my taxes myself wit the aid of a tax program and save some money. That was also the first time in 20 years I got audited by the IRS. Coincidence? Probably not. What my CPA charges to do my taxes is a lot less than to represent me at a tax audit. That’s one lesson I learned the hard way.
    I think clients are foolish to try to do their own web sites, and it was just as foolish for me to try to do my own taxes. Stick to your area of expertise.

  9. Some days I swear you guys read my mind!

    Since 2008 will be my first full year freelance designing full-time, I’ve realized that next year I’m going to have to hire an accountant/cpa. Quicken and the federal guidelines just got me through this year with the usual fanfare and headaches. After detangling how to declare my mixed incomes, I’m looking forward to paying someone.

    But I was still unsure of how to organize my accounting before handing it over. Thanks for this write up, I appreciate the advice. And nows the perfect time to start sorting some receipts and updating Quicken!

    Cheers

  10. Ok, I’ll bite - how are you able to deduct the cost of your contact lenses?

  11. I use a book keeper for my um… book keeping. It’s a little cheaper than have the guy with the expensive title do all the work. And then in February we get everything organized for the pro accountant that prepares my taxes.

    And if you haven’t incorporated yourself yet, get on that boat!!! You’ll save 10 times what you spend to get it done, if not more over the years.

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