Save Money! Last Minute Tax & Money Considerations for Creatives

Mara here – I handle the money & taxes here around Chase Jarvis Inc – chiming in with a few last minute year end accounting tips for all you creatives out there. In these moments of the year, I suggest you take an hour today before the parties begin to focus on your accounting paperwork and the financial status of your business. Here’s a few things to look at ASAP

Contractor or Assistant Payments. Review the payments made to contractors for the year and check that you have all the W-9’s you’ll need for your January 1099’s (they are due to be delivered in January!) If you paid an individual or single member LLC at least $600 in service income this year, you’ll need their Social Security Number or EIN. Send those emails out now, you’ll beat the end of January rush.

Profits & Losses. Look at your profit or loss for the year. Do you have a profit or a loss? If it makes sense to reduce your profit this year, buy something now!! Do you need some new equipment? How about just some printer cartridges or a new bag? Anything you buy this year will reduce what you send to the IRS. Alternatively, if you have a loss or think it would be better to reduce next year’s profit, you may want to wait to spend that money until after the first of the year. Remember, if you charge that purchase on a credit card, the purchase counts in the year you charge it, not when you pay the credit card bill.

Tweak it. Think about any small changes that would streamline the way your business runs. For example, we find that sometimes we work with models who don’t have experience creating invoices since they don’t work as an independent contractor very often. We’ve created a simple fill in the blank invoice that they can fill in on-site with all their relevant information. It saves us having to explain the process to them and potentially needing to chase down an address later. Is there anything that you can prepare now to simplify your life on projects next year?

Big changes. Start to think about whether you need to make any big changes in your business. Should you add a retirement plan? Is your accounting software working for you? Do you like your bank? How about your tax accountant, do you need to start shopping for a new one? January is a great time to make changes since most businesses run on a calendar year and there’s no time to consider that like right now. If you wait, I’ll be April before you think about this stuff again.

Tax status. A big decision, if you’re a sole proprietor, is whether it’s time to incorporate your business. I can’t advise you on this, you’ll need to discuss it with your accountant and maybe a lawyer. But if you think you’ve grown to the level where it makes sense to have that separation (protection from your personal assets), start to look at it now. Make the appointment with your advisor today! Roping in your lawyer/accountant at the beginning of January is a heckuva lot easier than April when everybody else is trying to get their taxes in.

That’s it. hope you’re enjoying family and friends and holiday cheer. And if you can act on at least one tip above this week, I’ll give you credit for crossing off a New Year’s resolution in advance!