Tax Season Survival Guide: Freelancer Edition
Tax Expert Ro Williams JD, MBA will teach you how to save time and money while prepping for tax season. You'll find out which tax forms to use, how to keep them organized, and learn a few ways to optimize the filing process so that your next tax season is as smooth as possible. Jumpstart your January with a FREE 30-minute webinar just for freelancers and independent contractors.
Ro Williams, JD, MBA, is the Tax Technology Manager at ComplYant. She is an experienced tax professional and has previously worked for International Law and Public Accounting firms.
Note: This topic covers U.S. businesses only. Any information provided during this event is not intended to be taken as advice or to be perceived as a specific position on any subject of law or tax law.
DeMei (00:00):
Hello. Hi everyone. Thank you so much for joining us for today's webinar called The Tax Season Survival Guide: Freelancer Edition. While we give everyone a few moments to get settled in before we start, I'll introduce myself. My name is DeMei and I'm a Customer Support Specialist here at ComplYant. Myself and my team answer user questions and service requests through live chat and email. And we also reach out to users directly to learn more about their businesses and their business needs so we can continue to grow this platform in the ways that will best support them. If you're not familiar with ComplYant, it's a must-have tool for business owners that helps them to save for and pay their tax payments on time. In today's conversation, we'll cover lots of things freelancers should know to be fully prepared for tax season. If you're a freelancer or an independent contractor, we're confident you'll take away a few things from today's conversation that should help you save time and money where your taxes are concerned.
So you can get signed up for a ComplYant account in minutes at www.ComplYant.co. That's C O M P L Y A N T.co to begin receiving reminders if you haven't done so yet. You can also find us on Instagram at @complyantapp. Again, that C O M P L Y A N T A P P. And on Facebook at www.facebook.com/ComplYantApp. Again, C O M P L Y AN T A P P. We're gonna get started momentarily once Ro is ready to go. But we love to see engagement in the chat, so please feel free to drop your name, your business name, your location, and also any questions that might come to mind while we're having our conversation. We'll be happy to answer those questions on the fly if we have time. Thank you again so much for tuning in. Thank you. Thank you.
Ro (02:02):
Hello, everyone, thanks for that DeMei. Alrighty. I am Ro, I am the Tax Technology Manager here at Complyant. What that means is I basically manage all of the tax rules and regulations for each state and over multiple business structures. So today, we're gonna jump into the tax season survival tips for freelancers and contractors. And I wanna add that these tips are for small business owners as well. Some small business owners aren't corporations, they're not multi-member organizations. So if it's just you, if you're just a sole proprietor or a single-member LLC, this will apply to you as well.
Tax Season Tip: Decide if this thing you are doing is a business or a hobby (2:42):
So the first tax season tip that I have for you is to decide if the thing you're doing is a business or a hobby, and that's more so configured towards freelancers and contractors. I attend a ton of Small Business Expos and a ton of different organizations' conventions and conferences. And something I notice is freelancers and contractors sometimes don't identify themselves as business owners. And if you don't identify yourself as a business owner, the IRS won't identify you as a business owner.
So the first thing is if you're gonna do this thing, then do it the right way. Say it with your chest. You're a business owner, this is your business, this is your thing. And so if ever you are audited, that's the first thing out of the IRS mouth. Are you a business or is this a hobby? And you can fully say, this is a business that I've been pursuing for X amount of years.
(03:40):
Now, once you decide that you are an actual business, something to think about is business entity structure. I don't want people to jump into this decision lightly. There are different facets and different things that your business has to do before you should structure yourself. But a business entity structure, one helps legitimize your business. It helps people to know that, hey, this is an actual business that not only they should take seriously, but you take seriously. But it's super important when you have to sign up for things such as banking or something like that. It's just so much easier if you have the right entity structure and the right things in line to open up the things that you need in the future or even qualify for the things that you need. For some grants, you can't qualify them until you actually incorporate, but there's not much difference between a sole proprietor and a single-member LLC. So just take a second and think about that before you jump right into it. And this is just a summary of the different organizations that most people jump into once they have formed their business. And you'll have access to these and you'll be able to also go back on the replay and look at this if you need to.
Tax Season Tip: Know your Income (05:01):
Ro (05:01):
Tax season tip number two, know your income. I think that's super important because once you become a freelancer or a contractor or a small business owner, then your income looks different than what it looked like previously. You receive a lot of just cash dumped through your bank account. So it's important to know what that income is from and how you obtained it because that's also a part of how you get taxed. In some states, you are taxed for services. In other states, you aren't. So if you are making money in a state that actually taxes for services, you need to actually pay that tax on that service. So it's important to know your income, know what you're bringing in, and know who paid you, and know where the payment came from. This looks a little different when you have an online platform such as an e-commerce store because you're selling goods and then the majority of states' goods are taxed. So your accounting system should have that aspect. Not your accounting, but your e-commerce system should have that aspect of knowing what you have to pay taxes on or where, like, which states which localities. But if not, it is definitely your responsibility to know those rules and regulations for your business.
(06:10):
And make sure you're adding up all your business income from each source you have given services to. The IRS will know your income and you'll ask like, well, how will they know my income? Because these forms that you get, such as the 1099 NEC, you receive a copy, the person who sent you one keeps a copy, but also the IRS gets a copy. And then not only that, but the IRS has access to your banking records. If they want it, they could subpoena it. It's not that hard. It's actually one of the easiest subpoenas ever. So just make sure that your income that you put on your tax form is equal to the income that you actually received. A way to keep up with this is to get an accounting system or bookkeeping system, or even just an Excel spreadsheet. Maybe you're not making that much money or maybe you're not running that many transactions a month where you need an accounting database. So maybe you can do an Excel spreadsheet. If you're using something like Square and accepting cash through Square, you can easily do a summary pull on Square. So just keep in mind that you should actually know your income, and know what's happening. It's fun to make money. Sometimes it's not fun to keep up with the money though.
Ro (07:29):
And another thing I just wanted to point out about income is this is your 1040. It is your federal 1040 individual income tax return. Most people in the US file this unless they fall under the no need to file category. Even if you know you have a corporation, you still have to file a 1040 because you have to file that on yourself. So something about the 10 40 that I want to point out for contractors and freelancers and small business owners is I always hear how do I file my business tax? And I feel like it's a good question, but it is a convoluted question as well because you don't really file a business tax return when you're not in an s-corp or a corporation. You file a schedule within your individual tax return. But for the sake of sake, let's go ahead and call what we know as a Schedule C, our business tax return.
So when it comes to the 1040, usually people will put their income, a W2 employee will put their income on line 1A, but because you are making outside income, let me caveat this. If you receive a W2, it still goes there, nothing changes with that, same old game. But once you start receiving other income, then you move down a couple of lines to line eight and on line eight, this is where your income will flow through from your Schedule C. That's a lot going on flow through. No need to worry about that because in your tax system what'll happen is it'll ask like, Hey, do you have any other income? And you'll put in all the numbers and all the things.
(09:08):
And when I say put in, I mean I want you to actually copy the information from this form, like copy everything onto your tax software. Don't skip off anything. Some people like to think that something isn't necessary but it is, everything is necessary. All the boxes may not be filled out, and usually, they aren't because the person you're doing the service for doesn't withhold any taxes. But just in case, make sure you fill out everything in your tax software that's displayed on your form.
(09:50):
So your W2 income would still go online one A if you have that. But if you have other income outside of W2 income, which is usually why people attend these webinars, that will flow through to line eight. And what happens on line eight is the amount of income is aggregated. So maybe you had 10 1099 NECs, all that flows through to line eight. So it'll be a combined number. You just won't see one number from one to 99. It'll be a confined number. So that's another reason why you should know your income because you should be checking to make sure the tax system added your income correctly and everything flowed through to line eight.
Tax Season Tip: Keep Track of your Expenses (10:33):
Ro (10:33):
The third tax season tip is to keep track of your expenses. You will spend money. That is the nature of business. Business requires you to spend money. It takes money to make money. When it comes to tax time, you need to make sure you have enough evidence and that means receipts to give to the IRS if that was ever the case or if your accountant needs something. Now, a small tip, but huge for accountants and bookkeepers, don't bring us all your receipts. We don't want that. That's not necessarily what we're asking for. So that's why I'm saying if you have time, put it into an Excel document and just have one line that says income and total that up because it's your business you should know firsthand how much you make on your business. If you know time gets away and life happens and you don't have time to add up all your expenses and all that jazz, no worries. That's what your accountant and bookkeeper are for. However, just don't take them a big box of receipts because that can be overwhelming to them as well. Maybe like separate into folders first, but whatever gets the job done, gets the job done.
Tax Season Tip: Keep your Books Up to date (11:43):
Another tip is to keep your books up to date. And this goes in line with your income and your expenses. Get an expense tracker or accounting system. Just get something to keep you at ease with knowing what's functioning and going on with your business. A lot of people nowadays like to hire virtual assistants to do these tasks, which is perfect. That's an awesome resource. Just make sure your virtual assistant understands what's happening in your business. Make sure the streams of income are separate. Make sure if you do have separate streams of income, the expenses are matching up with those identified streams of income because something for one stream of income could be expendable, while it may not apply for the other. It's a little convoluted, let me break it down. So, someone that works from home, just a regular, regular person works from home. Let's say they're a customer service agent, they work from home and then we have someone over here who's a photographer. They work from home also. These work-from-homes are completely different. One of these people can actually write the mileage from traveling from their home to their site where they do the actual photography, whereas the other person if you leave out the house, you cannot write off anything going on over here. So just make sure you're categorizing the expenses with the stream of income where you can deduct the appropriate things.
Tax Season Tip: Separate Banking Accounts (13:11):
Ro (13:11):
Another tip for accounting purposes is separate banking accounts. I am a huge proponent of separate banking accounts and I mean for everything, I love to see an operating account versus a payroll account, for instance. You have to pay payroll every month. It's probably $60,000 coming out of that payroll account. You should just keep that separate from your operating account because in no day will you ever be able to pull that income. And this is where certain things like forecasting and projections come into play and are great resources because you're able to keep that amount. But also once your business grows big enough to have payroll, that's a whole separate ball game and we have a ton of information on our site about that. So make sure you check that out.
Tax Season Tip: Know your Forms (13:59):
Ro (13:59):
Tax season tip number four is to know your forms. I'm a big proponent of knowing your forms because I like for people to understand what is being said to them. Your accountant may handle your books, but again, it's still your business. You should know everything that's going on about your business. You may not know all the details, but if someone comes to you and says like, “Hey, this 1099 NEC came up and it's from Brooks Brothers”, you should know that, “Oh, this 1099 from Brooks Brothers, that's one of our clients that does X, Y, Z. And so this goes over here”, you should know how your business flows. It can be quite overwhelming and that's why there's virtual assistants and executive assistants and all those things. But when it comes to your money, you should know your money. So the common forms that you should know are the Schedule C, the 1099 NEC, and the 1099 MISC. A couple of years ago, the 1099 MISC - the 1099 miscellaneous was actually the main reporting form for contractors and freelancers and people of that YouTubers those that do Twitch, and UGC creators, that was the form. That's not the form anymore. The form is the 1099 NEC, that's the 1099, the non-employee compensation form.
(15:21):
So this is where all of your service income should be going. You will receive a 1099 MISC from somewhere like Twitch, where you're getting royalties back. And that royalty is actually a royalty. So don't put it as income because it's not income, it's a royalty, it's a certain type of income, but it's not the income that we're calculating taxable income off of. That's super important. So when it comes down to the 1099 NEC all this information will be filled out for the most part. What won't be filled out typically is the federal income tax withheld or the state tax withheld, because typically those people you are providing services to, they're not your employers. Usually, no reason for them to withhold income tax unless you ask them, payroll tax unless you ask them. So your non-employee compensation will go in box one. So you take the amount from box one and you'll put this amount specifically into your tax software, and your tax software should definitely replicate this form. If it doesn't and you're confused, drop us a note. We have a chat on our site, you can drop us a note and we'll definitely reach out and help you, no problem at all. But this is the box that should hold the amount of income that you made and you just transfer this amount into the form section that you're filling out inside your tech software.
(16:46):
If you get overwhelmed, it's okay to take a break and step back, but it really shouldn't be that strenuous. If you find yourself just not knowing what's going on, walk away. It's not your thing, it's okay. It does not have to be your thing. Everything doesn't have to be everybody's thing. Go get some help. I'm a big proponent of if you need help, go get it, I don't care if you need help bringing groceries up the steps, hire somebody to do it. So if you need help doing your taxes, reach out to someone. I would prefer that business owners, small business owners, freelancers, and contractors reach out to an accountant or a CPA, somebody that's qualified. Sometimes a bookkeeper can't get you where you need to go and that's important to know. A bookkeeper is different from an accountant. So just keep that in mind.
Ro (17:33):
So this is your schedule C. Well, it's some of it, did the best I could. This is your Schedule C. The information from your 1099 will flow to your Schedule C. It'll actually go in this box line. So that's where that'll go.
Tax Season Tips for your Clients (17:55):
And tax season tips for those with clients that’s not actually the freelancer or the contractor or the small business owner, but maybe the person providing some essential help for these people. Deferral tax and liability provisions can be a cost-saving opportunity for clients. Make sure you look into that. Not only can they be a cost-saving opportunity, but it's just a great forecasting tool to see how much tax you may benefit from or you may have to pay. In the future, set up an EFTPS account. A lot of letters happening. This is the official IRS account where you deposit your income tax payments, your estimated tax payments, or your payroll withholdings, all that jazz. I feel as though it is super important for you to set up this type of account because this is where all of the information is. You will be able to go back and pull records instead of doing something like direct pay, where they don't have the record of the payment. Like they probably have it somewhere on a server, but you can't easily access it. Where EFTPS is like your official IRS transaction account outside of your tax transcript of course.
(19:09):
And also determined tax credits that your client was close to getting but didn't qualify for and come up with a plan on how to get those credits next year. Make a plan for bonus depreciation, although it's not as bonus-y as it was. We can still benefit from it, you can still use it. Make a plan for a 179 deduction. Make a plan for a French benefit plan if someone has payroll. I think it's so important to plan ahead of time and it pushes you more on the side of the field where you're looking for opportunities before they happen instead of trying to catch up with the opportunity. And that is all I have for today. I believe we have some questions that we can run through and if you have any questions, feel free to drop them in the chat and we'll answer them.
Question and Answer (20:01):
DeMei (20:01):
Thank you so much, Ro. That was extremely informative per usual. You're just the best. You're such a resource and just a bright light. I feel like you answered so many questions for me on a daily basis. So just wanna make sure I'm giving you your flowers as usual. But yes, we do have some questions it looks like we can pick up with. And I think actually this first one that I'm seeing you kind of touched on when you were mentioning people always asking like, “How do I file my taxes or what does that look like?” The question that I had or one of our users one of our viewers had, what should new business owners know about filing their taxes or filing their business taxes for the first time? And I guess we're speaking specifically to LLC owners.
Ro (20:55):
Okay, so it looks different if you're a single-member LLC versus a multi-member LLC. For the sake of this webinar, let's just say it's a single-member LLC. Single member LLC, again, you'll file the same tax form that you normally do. You'll file the 104 -, inside of the 10 00 you'll have something called a Schedule C. And a Schedule C is the profit or loss form. And I know it's a lot of words, but if you have an accounting system, your accounting system should have a report called your profit and loss and you can put that information right on in here. Don't even have to worry about it. That's why it's easy to have an accounting system when tax season rolls around. That's why your accountant will always ask you for your PNL and your balance sheet, you should always have those two. But this goes inside of a 1040. And you can't submit it without the 1040 either. Something else is to make sure again, all your streams of income are separated from your expenses. Make sure everything that qualifies for one business is lined up with that business and don't cross the river to get something to qualify. If it doesn't qualify, it doesn't qualify.
Something that I read recently was... Well, most accountants know how audit processes go. One thing about audit processes is they target people with earned income credits, child tax credits, and small business owners because they are just the easiest to audit. That's just a fact. It's harder to audit a larger corporation. So if your business lost $10,000, in my head, that's an easy audit, right? And it goes through an automated system. So don't think that the IRS is picking on you, the machine might be picking on you, but the people, they're definitely not, they don't handpick returns unless you give them a reason to handpick your return. And that's a different story for a different day. But yeah, if you need any other help, feel free to reach out to us through a chat and we'll get you hooked up with me and we'll figure something out.
DeMei (23:15):
Absolutely, yes, Ro is always very available to answer questions. She's amazing. Please, please get in touch with us after this webinar if you do have additional questions and we'll do whatever we can to help. I guess the second question kind of piggybacks off this one just a tad. What things should small business owners, and independent contractors know about becoming qualified if they wanted to register as an S-corporation? It looks like maybe the initial question, this user might be like an LLC owner, but maybe they're hoping to be able to qualify as an S-corp sometime in the future. So are there maybe things they should know about that?
Ro (23:58):
So the biggest one is there are qualifiers to become an S corp. One of the qualifiers, it's like you can't have foreign people or things or businesses. It's called a person and a person can be a business or an actual person, but that's usually not an issue. The real issue is the income. I think people have this idea that you can become an S corp and you save all this money and it's not really true. You can become an S corp, you absolutely can and you will absolutely save money, but you just can't walk up and say like, I wanna be an S corp. You have to have the income to provide a basis for you to be an S corp. If you're living in California and your income for your business is $50,000, you can probably shake it, probably can. But if I was your IRS officer, I'll be like, are we really doing this? Is that really how much you can live off of in California? Because what it comes down to is, is it a reasonable salary? It may be a reasonable salary, I don't know. But that is the first step. Are you taking a reasonable salary? And when I say a reasonable salary, I'm saying like, can the average American person, not the person living in poverty, not 80% of the US people, we're talking about the people who are making decent money. Can you live off this, right?
(25:23):
Not penny pension, not eating Raymond noodles for two weeks trying to make it pass. Can you absolutely live off that reasonable salary? So before you become an S corp, that's something you should think about because you can get approved and then five years later you can get denied. So the money you thought you were saving, you're no longer saving. You have to pay it and no one's gonna help you with it. So I mean a tax attorney will. But just make sure you are qualified to become an S-corp before you cross that bridge. If you are qualified to become an S-corp, there are a ton of benefits, especially the ability to save on payroll. But something else about that is when you're a sole proprietor or a single-member LLC, you can't draw payroll, we know that. You cannot take payroll if you're a sole proprietor or a single-member LLC. However, once you pay your self-employment taxes, you can write off half of that. You should be writing off half of that because a W2 employee usually their employer pays 7.65% and you pay the 7.65% as that employee. But now as a business owner, you're paying both. So you do get the benefit of writing half of that off.
DeMei (26:39):
Excellent. Thank you so much. That was great. So much you shared, extremely informative. The third question and then it looks like we maybe have a few in the chat, so I'll try to speed it up. Are there habits that small business owners can adopt that will help them to maximize their refunds?
Ro (26:59):
So this is where planning comes into play cause it depends on what the refund is, right? We have deductions and we have credits. Is the refund decreasing our taxable income or is the refund going after credits, which is like money that's out there that the IRS is giving you for whatever reason? So I think first we have to plan on what's going on here, what are we doing? Of course developing habits, bookkeeping habits is extremely important. Separating bank accounts, again, I cannot harp on that enough. Keeping receipts and the way you keep them is up to you. I like for people to take a picture of them and throw them away. So there are some programs out there that allow you to take a picture of the receipt and it uploads to like certain folders. You have to find that out. I mean, you probably can reach out to us and we'll give you a listing, but I appreciate more so of the take a picture of your receipt so your accountant can match it. You don't have to call your accountant or email them and clog up their inbox. So that's one. Keeping up with your expenses through technology, I would say.
(28:13):
And keeping track of your business through automation. I believe automation saves you a lot of time and it also takes off that burden. So if once you develop that habit of setting up your business properly, I feel like things just naturally flow better. And this setup can be like through scaling and it doesn't have to be like horizontal scaling, it can be vertical scaling. It can be through scaling or adding someone to your team because you don't need to be everything. You were not made to be a tax accountant, if you were I feel like you would be pursuing that. So just let it go. But you have to develop healthy business habits in order to, I feel like, keep your business viable and sane.
DeMei (28:57):
Excellent, excellent. Really essentially it's gonna be about how you plan, plan for your taxes to be able to get them the maximum refund. So yes, absolutely those separate accounts, all those kinds of things will help make that simpler. And you just touched on it briefly, I guess when you mentioned scaling. The next question I'm seeing is how can business owners set their businesses up for success in preparation to scale and streamline their operations.
Ro (29:27):
Awesome question. Setting your business up for success, I guess it all starts at, you have to have some sort of plan in place. But there is vertical scaling and horizontal scaling so you have to determine which one you're doing in order to get on the path that you need to go on. So sometimes you have to work that backward. So for instance, if I want to vertically scale my business, let's do horizontal, it's just easier. Horizontal scaling is just growing your business, not trying to add a stream of income or revenue or anything like that. You are just trying to put all the pieces in place so when it is time to add that vertical scale, it’s easier to scale. So setting up tasks, for instance, say you had a contract with a client, you received the contract signed and everything, you should have an automation that does that. You should have an automation to like once you send out the contract cause some contracts have to be edited. Once you send out the contract and the contract is signed, there are programs and automation for you to automatically get your clients to the next step.
(30:40):
I feel like that's part of horizontal scaling, but it's also important to do in order for you to scale because you can't scale if you are doing repetitive tasks all the time. A part of scaling is taking out those repetitive tasks, but you have to be able to see, okay, this I can offload to somebody else, this I can offload to somebody else. So I think to answer the question, the main thing is making sure the tasks you can offload are being offloaded so you can get what you need to get done and finished in order to scale the way you want to. Most scaling is vertical, and most people want to grow their business, but I think that a lot of people miss that horizontal part. So make sure you're capturing that part before you're trying to add additional streams and things like that.
DeMei (31:31):
Absolutely. Yeah, that's a great point and the automation that you bring up as well, I think just in our life, in general, is becoming so much more of an everyday thing that you're really kind of sleeping on opportunities if you're not using it in business as well.
Ro (31:47):
Yeah, I feel like automation takes up a lot of time that people used to contribute. I know that's one thing for bookkeeping. Bookkeeping at this point should be completely automated. Like there's no reason... I know bookkeeping can be overwhelming for business owners, but if the automation inside of the bookkeeping is set up appropriately, then it takes away that stress. Gone are the days when you have to actually go through each one of your banking transactions. You should have automation inside of your banking software that sets up those transactions to be categorized where they need to be categorized to without you taking the time to categorize each one. What's the point of sending all. I have 10 Amazon transactions here, they're all going to the same account. Why do I have to push the button on each one of them? But most bookkeeping software now they do have that in sight. You just have to look for it or connect with somebody who knows how to set that up for you. So don't be scared of bookkeeping software. It's not as bad as it used to be.
DeMei (32:50):
<Laugh> very much designed to help us now in this day and age. Love that. It looks like we have maybe two questions that came up in the chat and then just one more here.
Ro (33:00):
Do you wanna jump to the ones in the chat first?
DeMei (33:03):
Sure, absolutely. So it looks like Robin asked the question in the chat, thank you so much for tuning in Robin. And they asked what type of write-offs do you typically take for business owners?
Ro (33:15):
One, it depends on what type of business you have, but two, I can give you a couple. And these are like common write-offs, typically each business owner has them it's just the way life works. So common ones I would say again I need to be something in order to do it. So I'm gonna be a photographer, right? I'm a photographer, I have a photography business. Common write-offs for people who own businesses. Cell phones, not a hundred percent because you don't use it a hundred percent. So if you wanna get another line and make that your business line, go ahead and do it. So cell phone, definitely, internet, definitely. Again, not a hundred percent if you wanna do separate, do separate. But when you become a business owner, I think people forget how much actual time you spend as a business owner. So typically I'll do like a 60-40 split on the yearly expense for internet or cell phone.
DeMei (34:22):
That's fair.
Ro (34:23):
So internet, cell phone, common supplies. You're gonna buy something off Amazon, you're gonna buy a notebook, you gonna get a new desk, you're gonna get some pencils and some pens because I don't know, that's a thing that we have to do. If you're buying books to learn your industry and learn the things you're doing, we're gonna write that off. Lights, light bills, a portion of your light bill, and things of that nature.
DeMei (34:55):
Mileage, maybe you mentioned that one already earlier though.
Ro (35:00):
Yeah, mileage if you are traveling for your work, yes. If you are not, no. Because they take mileage very seriously. I had a tax client one time and this was a different side of tax that people don't see, but they were being audited by the IRS and you go through the audit process, but it can eventually go to tax court. It's a whole big thing. But the lady was a paper carrier, like a newspaper carrier, like the people that come out to your house at like 4:00 AM and drop off the newspaper. And the IRS was contesting the mileage she put on her vehicle. And the thing about it is, yes, you are a newspaper delivery person, so it's implied that I have to drive in order to do my job. However, if it's not tracked correctly, they will contest it. And again, they do it because it's the easiest thing to do. Like we can go on Math Quest, we can put it in your address and the address to this place and if those miles don't add up, it's an issue. So just make sure the things you are deducting are qualified in your service line and are reasonable. They have to be reasonable as well.
DeMei (36:19):
Very important. Reasonable is key. Yes. Thank you. And then the second question that I'm seeing here in the chat from Katie, thank you so much for tuning in. It said that they started an LLC in July. They have no revenue as they've been working on setting up the business. Now that they're open in 2023, how do they file their taxes now? It says revenue or not and then it says schedule C, question mark.
Ro (36:49):
Okay, yes. Schedule C, revenue or not, you have to file it. And I'm only gonna say you have to file it because it gives record of when your business started. Now, in reality, it's not gonna change your taxes. So if you don't wanna file it, okay. But I would file it, I would recommend my clients file it because you could have spent expenses if you spent money, well you did, you spent money, and you started your business. That startup cost, you can deduct that right on off. So yes, file your taxes even if you have no revenue because you do have expenses and those expenses will assist you in some type of manner. So yeah.
DeMei (37:34):
Excellent, thank you. Honestly, I think you kind of touched on the other question that we had, travel requirements for freelance photography, but essentially we just hit on the fact that those mileages have to be right. We wanna be within reasonable parameters at all times. And those are key things to remember. Key is reasonable. So, excellent. I think that was everything. I didn't have any additional questions in mind, but it was a wonderful presentation. Thank you so, so much Ro for this tax season survival guide, the freelancer edition, also working for small business owners. Thank you, guys, so much for tuning in. Like Ro was saying, if you have any questions, any follow-ups that you have for us, webinar suggestions you might wanna share with us, please get in touch with us. We're always happy to take those. You can send an email to us at hello@complyant.co. Again, that's Complyant. C O M P L Y A N T dot C O. Again, topic suggestions, any additional questions you might have. If you're looking for resources, we're always happy to provide those to you. So again, we thank you all so much for tuning in. You will be receiving a link that you can rewatch this at a later date, so just keep an eye out for that. Thank you guys so, so much. Everyone, have a wonderful day. Thank you.