Starting a small business or deciding to leave the 9 to 5 and become self-employed brings about a whole new set of challenges and responsibilities.
One new experience is that of dealing with taxes.
Without an employer to handle withholding of Federal and State taxes, FICA and Social Security, etc., that responsibility and obligation falls squarely on the shoulders of the individual. This change requires new knowledge and understanding of the tax laws associated with businesses.
For the most part the tax laws for a business can be a benefit to the taxpayer IF they understand how they can reduce their taxable income by claiming allowable business expenses as tax deductions.
The key to justifying any deduction claimed is consistent tracking and documentation of those expenses throughout the year by keeping receipts, maintaining good bank records, or using web or mobile based tool designed specifically for expense tracking.
With that in mind Intuit, the makers of Quickbooks and Mint, commissioned a study by the Receipts Team at Quickbooks Online to survey 500 self-employed individuals and small business owners regarding their current expense tracking and receipt capture habits.
Questions ranged from what types of deductions self-employed individuals take to how expense receipts are stored and organized to what types of challenges they deal with while trying to keep track of it all.
Of the 500 respondents, 60 percent said they were self-employed, while the other 40 percent were small business owners. Sixty-five percent of these individuals said they have between 1 and 5 employees, while almost 20 percent (19.2) have no employees.
Here are some of the highlights:
Of course Deductr was created 10 years ago to help business owners and self-employed individuals overcome the challenges expressed in the survey and make expense tracking more consistent and documentation easier and more accurate.
To see the full study including graphs and statistical data you can go here.
Special thanks to Intuit Quickbooks for sharing this study with us.