No sooner have you put away the holiday decorations that it’s time to start thinking about taxes. It’s never fun, I know, to pull together all your important tax documents and receipts. Believe me, I’d much rather bury myself in my next writing project than deal with Uncle Sam. But with some sound advice and resources, tax prep can go smoothly.

In this post, I’ll cover several things writers and creatives should consider when planning for taxes, such as whether to hire a tax expert and how to keep your receipts organized.  

I’ve found in my 12 years of freelancing that the key to a seamless tax prep session is keeping good records and having a system for organizing your receipts. Trust me when I tell you that keeping good records will make your preparation easier and save you a lot of headaches later on. It’s surprising how many people don’t keep track of their income and expenses for their writing business.

Once I became a homeowner, I knew I needed help at tax time. So I didn’t hesitate to ask around for referrals from friends and colleagues. Working with a tax expert has been a godsend because they know the tax laws best and they provide guidance on how to reduce expenses and improve my tax deductions for the following year.

“A tax expert is not just for filing taxes. They also help you plan to reduce liabilities,” says Julia White, a Certified Financial Educator, Accountant and Tax Strategist, speaking to members of the American Society of Business Publication Editors as part of their Solopreneur educational webinar series.

White suggests hiring a tax expert when you have:
* Multiple income streams
* Significant business growth
*Complex deductions, such as a home office, vehicle usage, and retirement plans.

Conversely, you can try doing taxes yourself if you have a single income stream, a limited number of deductions and a simple tax situation. The more complex your situation becomes, the more likely you can benefit from getting professional tax advice.

No matter how you plan to do your taxes, White cautions against committing some of the common mistakes that people make. For example:

* Mistake 1: Not separating personal and business expenses. It’s helpful to track expenses on a spreadsheet, but make sure to keep the business expenses in their own categories. I also keep my business receipts in a file marked Tax Receipts, so I know where to find them at tax time.  

* Mistake 2: Ignoring quarterly tax payments. This is more important if your business is set up as a C corporation or an LLC. If you operate as a sole proprietor, like I do, you’ll likely pay taxes annually and file using Schedule C. Having a tax expert can help you with this.

* Mistake 3: Poor record-keeping for deductions. Any expenditure you make for your business should be recorded, either on a spreadsheet or some other platform like Quickbooks. At tax time, it will be easy to refer to that data when you need it.  

For example, after recording my business expenses on my monthly budget worksheet, I save the receipts in a file folder called Tax Receipts. At tax prep time, I sort through them to make sure I have everything I need for my accountant. While I may still have to track down additional receipts, mainly from online purchases, I know I have most of what I need at my fingertips.

Obviously, while there are common mistakes, there are ways to create healthy savings habits for success. In addition to regularly tracking income and expenses, White suggests obtaining professional advice early on and to be proactive rather than reactive when it comes to making financial and tax planning decisions.

White also offers these professional tax prep tips:

1. Keep a personal budget. This will help you know your spending habits and see where you can cut unnecessary expenses.

2. Invest in business bookkeeping software. This will help you track your income and expenses for the year and prepare for tax season.

3. White recommended software programs like Quickbooks, Wave, Monarch Money or even a simple Excel spreadsheet. With Excel, you can create your own spreadsheet with categories customized for your business, or download a pre-formatted form from Microsoft.

Planning for tax time is never fun. But with the right tools and strategies, and an organized mindset, tax prep can be a breeze.