taxes
The best way to manage your money….for free
November 26, 2008 by admin · Leave a Comment
Since tax season is quickly approaching and getting your receipts together is always a blast (insert sarcasm here) I thought I would share an easy way to track your spending and see where your profits are coming from.
For the past year, I’ve been looking for budget programs and programs that track your spending. I want this both for my personal/family finances as well as my company expenses and earnings. A few months ago I went out and bought the typical budget software you can find at any Staples or Best Buy. I won’t mention it but if you ask 10 people, about 8 of them will mention this program. It has great referrals but when I tried to use it, I found that is was anything but user friendly. I couldn’t add sources of income or various expenses I regularly have but had to follow their strict idea of a typical user that has a typical j.o.b. Sadly, I had paid about $70 on this program and could see it was not for me. I wanted a program that was adaptable to my various streams of income through my video production company, my freelance work and my ebooks/consulting work. I downloaded scores of trials and found some programs that were decent but…THEN, I found my solution.
I don’t even know where or how I found this site but it’s AMAZING. You can use it for just personal/family use or just business use OR BOTH! It is fully customizable and best of all it’s FREE!
Let’s look at using it to track your business expenses and profits for your taxes.
First, import your various accounts. I would recommend starting a separate banking account and credit card account for your business spending. This will help with record keeping as well as keeping you nice and legal. The Feds don’t like it when you mingle your personal and business expenses together. Then, once you import your accounts, Mint.com will download your business purchases and for how much. You can then categorize each purchase into anything you like. They have categories set up but you can make your own if you want…and making your own is very easy. Talk to your accountant or CPA to see what categories the IRS looks for and what you can deduct. To read a great post on 10 deductions to keep in mind, click on this link at the bottom of this post.
Tracking your categories is easy and let’s you look at each month or year to see what you spend your money on. Remember, your top priority is to keep more money than you spend, Mint.com will show you if you are spending all your profits on a new monitor, laptop, HD camera, etc. Set goals for yourself that you won’t buy a new monitor until you have brought in $3000 this month (or whatever fits into your budget). Mint.com shows me how I use my money within my company and lets me track it easily. Most people will use it only to track personal/family spending, but I think it’s a great way to track your business expenses. Since it records each purchase, you don’t have to worry as much about recording each receipt and having a huge shoebox full of them at the end of the year that you have to read line by line. Please keep in mind that you still need to keep all your receipts for at least 7 years so don’t throw them away.
If you are unclear about what categories to make and what percentage gets deducted, go to any bookstore and pick up a tax book and look through it (quite the exciting topic, I know!). When I was first starting out, I went to a bookstore, grabbed a few tax books and got familiar with what is deductible and the percentage the government gives you.
I haven’t found a better program that: tracks your spending, is easily customizable, adaptable to various sources of income, helps with saving your money, pays bills online, shows your income and expenses in a handy dandy pie chart (did someone mention pie?) and is FREE! Try out Mint.com or various other programs and let me know what you think. The best way to track your money and see where it’s going it by having some sort of budget.
