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Former preschool and kindergarten school psychologist turned stay at home mom and felt food designer. Mr. Felt Food & I are total foodies and our daughter Grace is becoming one, too!

Tuesday, January 17, 2012

Etsy Shops, Taxes, and Bookkeeping: Oh My!

It's that time of year again.  Time to get ready for taxes.  We use an amazing accountant, so for our personal lives that usually means keeping a file folder handy to put tax forms into as soon as they come in the mail.  Our accountant is a personal family friend and she mocks me each year because I often don't even open the envelopes until I get to her office.  This year we'll have to mail everything to her so I'll be opening envelopes & trying to organize things as best as I can for her.

We get to file in 3 states this year.  I like to think we're keeping our accountant Shannon on her toes, lol.  We sold our house in MI finally, lived in WI for most of the year but then moved to WA so we have those to file, too. 

My business is pretty simple so far.  Since we moved this year & shut the shops down for nearly 6 months out of the year, I had a lot of investment but little profit.  Translation?  I won't be paying any taxes on the shops since I'm so far in the red. :)  I'm thankful the numbers don't matter too much to us since we don't rely on my etsy businesses at all.

Tax Categories Most Etsy Sellers Keep Track Of

1.  Car Mileage:  going to get supplies?  going to the post office?  Keep track of mileage!

2.  Legal/Professional Services/Rent:  Yep, this means the accountant for me!  Servicing my machines would count, too.  Did you know you can write off part of your mortgage or rent if you use a space ONLY for your business? 

3.  Office Expenses:  Paper, copying, printer cartridges, etc.

4.  Supplies:  For me?  Fabric, fabric, fabric.  Thread...more fabric.  Velcro.  Fabric.

5.  Travel Expenses:  I'm still looking for a need to go to Hawaii to purchase fabric or something, lol. 

6.  Meals & Entertainment:  If work related!  Please don't try to write off your Netflix subscription, even if it does ease the boredom of working late into the night. :)

7.  Postage:  Easy enough to understand that one as an online seller!

The best advice I got recently was from Ashley of LilBlueBoo's Business Posts is to set a date each month and catch up on paperwork.  It makes sense:  don't get behind!  I've set two dates a month because that way I can work on it in smaller batches.  Last year I tried a spreadsheet approach but I realize now I'm too old school for that.  It's a notebook for me, all the way! 

How do I store receipts?  A new shoebox/box each year. It's accountant approved!

I enter the receipts in my notebook so the data is already collected, I just need the receipts if I ever get audited. 

I started to enter my data but then I realized I could procrastinate needed a cute notebook and box to keep track of all these things!

First I grabbed some supplies.  I've had this paper stack for about 5 years & it's still handy!

Cutting the paper to fit my box, I ended up using packing tape
since I lack the patience to wait for glue to dry.

My helper was more than happy to use up my leftover paper
and extra letters I had cut.  She loves to glue letters onto paper!

The finished notebook pic is at the beginning of this post.  Here's the finished receipt collecting box.  I love it.  Now if I could only get the box & notebook to fill themselves..... :)

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