Very Simple Recordkeeping

Here's an abridged version of email I received from a distraught indie in North Carolina. You may be surprised at my response to him. Take a look.



June –

I am a self employed web developer and have really fouled up my financial life and have been in denial of the situation and desperately need to turn things around.

I don't see this as an excuse but I am young and being self employed kinda just happened and I have really messed up my financial life as the result of this. I am in need of help. No millions of dollars in debt kind of help but to the point where if I ever want to own a house or have decent credit I need to do something.

Often the most scary part of a situation is just not knowing where you stand and that is how it’s been with my finances, pretty sad but true.

I filed a return for 2005, though I pretty much owe money on all of them still. So hard to catch up on it once you get behind.

Mid year I started putting some money away in a CD so I couldn’t touch it, and didn’t think when I started it but I cannot get that money out until May.

I have to admit that with this stuff my brain just shuts off. It is difficult for some reason. I get overwhelmed by just the thought of taxes and my situation and all I need to do.

Do you still take on clients? If so, would you take me on as a client?

Jim in Raleigh, NC


Dear Jim,

The bad news is that you were in denial and your financial life is really fouled up. The good news is you're young so it can't have taken hold for so long that it’s unchangeable. If it's going to take time to straighten out, you've got a lot of years ahead of you in which to do it..

Before we talk about being a client or specific tax years. Let’s look at where you’re at and how to move out of that spot.

You’re a web developer so I'm sure your brain can handle taxes. It's not your brain that shuts off. The shut off valve is somewhere else. You need to figure out where it is and whether or not you want to turn it on.

A few days ago I went to meet with a website design/developer company in Santa Fe, Studio X . After speaking with the folks there and then coming home to tell my husband about it I realized that the relationship of me and my website is a lot like a client and his taxes . To have a good website, I can't just rely on the experts to do it. I must have a lot of input and do a lot of the thinking and planning myself. If I don't, my site won't do what I want it to. I have to make a choice about how much time and effort I want to put into it. Same with you and your taxes and recordkeeping.

You need to decide whether or not you want to learn about the money side of your business. You don't have to. All you must do is record and claim all income, and pay taxes. The government doesn't care about expenses if you choose not to deduct them. And if you decide that, for you, the time is better spent working rather than recordkeeping, then that's OK. The result: You spend less time on money chores but you spend more money on taxes.

You see you do have a choice.

Best regards,
June

To learn more about indie taxes and Self-employed Tax Solutions please visit http://www.junewalkeronline.com/