Organizing Court Reporting Expense Receipts for Tax Time

court reporting tax expensesAs a freelance court reporter, you’re in full control of your financial situation.  This means you’re responsible for paying your own taxes every year.  Filing your taxes is not a difficult task as long as you understand what records you should be keeping throughout the year.  If you plan and are well-organized throughout the year, doing your taxes at the end of the year will become much easier.

There are expenses that you’ll incur during the year that will need to be reported on your tax forms.  Here are the categories of expenses you can anticipate.

Advertising

When you have business cards printed, these are considered an advertising expense. Be sure to keep your receipt.

Insurance

This category includes any insurance that you purchase, such as health insurance, life insurance, business insurance, liability insurance, errors and omissions policies and disability insurance.

Legal and Professional Services

If you are working with an accountant to file your taxes (and you should), their services are a professional expense. Keep track of what you pay for accounting services.

Office Expense

Ask your accountant if your home office is eligible as an expense. If it is, he or she will likely ask you the size of your home office and questions about your utility bills, so be sure to track those expenses as well.  Keep track of any furniture you purchase throughout the year for your home office.

Repairs and Maintenance

If you have a need for repair of your computer or stenographic equipment, be sure to keep records of the amount spent and the repair that was made.

Office Supplies

This category includes all of the usual items that are used in an office, such as paper, pens, pencils, notepads, et cetera.

Travel

Keep good records of the miles you drive to and from freelance jobs. These miles add up, and can be taken as an expense.  Travel to conventions or out-of-town workshops can also be taken as an expense.

Dues and Subscriptions

The dues you pay for your state and national associations can be used as expenses. Be sure to keep the receipts of those fees.

Business Telephone

As a business, your telephone bill can be taken as an expense.  If you have a bill that includes fees for other family members, break out the amount you pay for just the business phone and use that number on your taxes.

Equipment

If you purchase a new stenographic machine or computer, these expenses can be taken. Also keep track of any of the accessories that go along, such as computer cases, cables, hard drives, et cetera.

Organizing Tax Receipts

Plan at the beginning of the year for how you’ll organize receipts as they come in.  That way you already have a place assigned for the receipts and are less likely to stash them in a drawer or box to take care of later.  If you’re the type who puts receipts in some random spot to sort later, this will be a major task at the end of the year that you’ll likely dread.  An expandable folder with many pockets is a great way to stay organized. Label the pockets with the categories above. Then, as the year progresses, you’ll be able to slip the receipts into the right pocket and avoid the day (or week or month) of sorting at the end of the year.

Write Details on Receipts

When you receive a receipt, make it a habit of writing on the receipt what it was for before filing. It may seem obvious to you right now what the receipt is for, but often details can be forgotten that you’ll need later.  Leave nothing to memory when it comes to receipts.

Long-Term Storage

Once you have filed your taxes, you’ll still need to keep your receipts for a few years. If space is tight and you don’t want to keep boxes in your office, you can scan receipts and keep the digital files on your computer or a hard drive.  You can even take pictures of receipts with your smart phone to store digitally.  The NEAT program offers easy scanning of receipts along with a filing system for categorizing each one.

Enlisting the Services of an Accountant

Paying for the services of an accountant is some of the best money you’ll spend as you manage your freelance business.  An accountant will be able to answer all of your questions about taxes, and what qualifies as an expense.  And don’t forget, you can also include the price of their services in your list of expenses.

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