Worksheets For Your 2011 Tax Return + Easy Recordkeeping

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Fellow Indies --

Here are your Five Easy Steps toward becoming
A Confident Indie.

This is the second edition of Five Easy Steps
and it includes
Worksheets for your 2010 Tax Return
and
Simple Manual Recordkeeping How-to.

Downloadable PDF
62 pages + 13 pages of additional information

For More Info Including a Table of Contents
To Learn More About The Worksheets
How To Purchase

Maze subscribers be sure to check out your discount.

Been told to “keep good records?” … Now you’ll know how.
Ready to tackle your 2009 tax return? … Here are the worksheets to guide you.
Simplify, save time, reduce stress, miss not one business deduction.

Intimidation ... no way.

I just heard from Annette, a cosmetologist in Santa Rosa, Ca. Annette said: "My accountant knows more than I do about my own self-employment taxes, and I have always felt intimidated by her. I need another tax person/advice! Thanks, Annette"

Let's think about this a moment ... the woman knows more than you do but we can assume that she's not carrying a big club to knock you over the head nor threatening you with expulsion from the swim club. So where does the problem lie?

If your third-grader came home from school and said she didn't understand the teacher but was afraid to ask a question because the teacher knew more than she did and besides the teacher scared her, what would you say? What are the alternatives for you and your daughter?

You have similar alternatives with your tax pro -- a paid professional. You are a professional business woman. You need advice on your taxes and you are paying a pro for advice.

If you have a problem doing that, here's a mental exercise: Put your tax pro in your profession. Get a mental picture of her with the lotions, ointments, steam machine, hot towels and everything else needed for a facial including the 55-year-old customer who asks that you make her look 45 for her son's wedding. A pretty absurd scene when you see your tax pro standing over the customer without a clue what to do next. Keep that picture in mind and maybe the intimidation lessens.

If that doesn't work, bring a friend or business colleague to your tax meeting.

Or, prepare a list of questions on paper and present the list of questions in writing to your tax pro.

And most important: Learn more. Read my blog, my site, check out my book from the library or buy a copy here Self-employed Tax Solutions.

And by all means, remember that you are a professional woman in business. It is your "indie job description" to learn about the business side of your profession.

-- June

There is no limit on the # of years you may have a loss in your self-employed business.

Hi June,

Since 1980 my husband and I have had two home-based businesses, plus he works from a home office for his job with the state.

We jointly own both businesses. The appraisal & consulting has never lost money and has very low expenses. I haven't done any appraisal or assessment work since 2000 because of health problems, but my husband has continued to do part-time property tax data collection (except for the past two years).

I have been on Social Security disability since 2007, and also worked part-time at a church until May 2009.

I resigned from that position because our middle daughter was diagnosed with terminal cancer. (She died March 8th, 2010.) My own home business, arts and photography, has never made a profit.

During 2009 and 2010, neither of our home businesses were in operation because of the need to care for our daughter and keep my husband's state job going. Now that we have had almost 10 months to process our daughter's passing, we are again trying to work in our home businesses.

My husband's work doesn't create any problems for our tax accountant, but my art & photography business does. I did not sell anything in 2010, and sold under $200 in 2009. However I did continue to purchase some supplies, books and office equipment in 2010. How long will IRS allow me to continue trying to make a viable business? Our CPA thinks she can defend the lack of sales for the past two years, as long as she can prove intent to continue the business. Do you agree?

Thanks for your help.
Cyndy
Jeffersonville, VT


Dear Cyndy,

My sincere condolence for your loss. It is a testament to your strength and resilience that you and your husband are back at work.

There is no limit on how many years you may have a loss in your self-employed business. As long as your goal is to make a profit and you handle your art and photography endeavor in a business-like manner you may have a loss forever.

Here are some posts that give a short explanation as well as an argument for you to present to your tax pro. Your situation is more fully explained in my book Self-employed Tax Solutions.

Self-employment is about credibility.

You must have a profit in 3 out of 5 years: Hogwash!!

Hobby or Business: Are you a professional artist?

Profit Motive: You're OK as long as you want to make a buck.

Best regards,
June

A well-crafted question gets a better answer.

An article that I wrote recently for

http://nationalpsychologist.com/ brought me many requests from psychologists for my expense list. Some also sent questions. The most frequently-asked question was this one, as expressed here by Dr. David from Santa Clara, CA.

How do I know if I'm paying too much year after year? Thank you.


Hello David,

Your question is similar to my asking you, how do I know if I handle personal relationships well? You wouldn't have enough information to give me an answer.

Am I referring to my relationship with my mother, my kids, my husband, my friends? Do we fight a lot? Have other people noticed and commented? What specific things are on my mind about this? Do I just feel that things aren't right? How long have I felt this way?

With taxes, as in any situation, you need to know the particulars in order to make the right choices, or give correct answers.

I would start by looking at David's last three tax returns. If they were not available, I'd ask what his gross income was last year and what was his net income for that year. Based on his answer I'd ask the next question and then the next.

Dr. David's question is often asked by indies in all professions. You might want to check out this on my website -- How To Ask A Question.

June

What kind of insurance should an indie have?

Hello June,

How are you? I'm glad to have found your site. It is a great asset to us indies.

I have one question I need to ask. I need indie insurance. How do I go about getting this insurance? Is this general liability insurance or something else?

Secondly, how much does sufficient indie insurance coverage cost? Thanks for your response in advance.

Tameko

Happy New Year, Tameko!

I am pleased that my site is of value to you. Thanks.

Asking how much insurance costs is similar to asking how much will my taxes be? Many factors are part of the calculation.

It depends on the kind of insurance and how much insurance you want. For instance, a policy covering a home valued at $300,000 is probably going to cost less than a policy covering a home valued at $500,000. Liability coverage for a graphic designer who never meets with clients in her studio will be less than that for a massage therapist who actually touches the body.

Insurance covers different assets, liabilities and situations. For instance:

** Liability insurance generally covers injury to another person. For instance, if a client walks into my office and trips.

** Property insurance (often combined with liability insurance) covers damage to someone's property. For instance, you break a window while cleaning it.

** Errors and Omissions policies cover mistakes in your work that impact your client.

** Workers Compensation covers injury to an employee.

** Media Liability insurance will protect you against lawsuits over what you say in your publications.

** Health insurance covers medical costs.

** And the list goes on ... life ... disability ... long term care ...

I think taxes are easy. Insurance is difficult. Think about what you need protection from. Then start by having a conversation with the insurance agent who handles your auto or home or health insurance. He or she may be able to direct you to other insurance agents. Also check with local business organizations for recommendations. I do not recommend NASE -- the National Association for the Self-employed.

More of my posts on insurance are right here insurance .

Also, for those of you who do not subscribe to my eLetter, Ways Through The Maze check out this one #32 for info on the new rules on health insurance deductions for indies.

-- June