Independent contractors in America don’t have a lot of benefits: no safety net, no company-sponsored health plan, no 401(k) match. What you have is a tax deduction. So make sure to do it right in order to save real money every year, by following these 4 simple tips.
1. Open a free Lili account
2. Be diligent
A small expense here, a small expense there, they add up quickly. The way you track and manage your business expenses will play a big part in the financial health of your business. Sorting expenses by categories might not sound like the most fun part of entrepreneurship, but that’s where Lili comes in: a little swipe left, a little swipe right and you’re done!
3. Be proactive
Let’s be honest, we forget things. Lots of things. Procrastination is the enemy. With Lili, you can categorize your expenses immediately, wherever you are and see a live estimate of how much you’re currently saving on taxes. And if you do it daily (weekly is fine, monthly if you must!) then when tax season comes, you can download your yearly expense report, and just like that, you can calculate how much taxes you owe. Better than searching your brain until midnight to remember where that $43 expense came from.
4. Be precise
When it comes to business expenses vs personal expenses, you want to be specific. Not only to protect you in case of an IRS audit, but to be able to expense everything your status allows you to. Add a receipt to your transaction to remember what you purchased. Add a note if only part of that transaction was business-related. When things are organized, it feels good, sure, but most importantly it increases productivity. We can’t help you clean up your desktop, but we can absolutely help you keep your finances in order!