When you start a consulting business and work out of your home with no accounting background, taxes that first year seem a bit daunting. I’d been using TurboTax for as long as I can remember, and I don’t own any real estate or foreign investments, so tax time has always been a breeze. I decided this year, since it would be a little more complicated, to hire an accountant.
Tiller keeps my spending organized
When my accountant started explaining what I needed to keep track of in order to do taxes as a self-employed work-from-home consultant, I was relieved to be using Tiller. I was already organizing my transactions with categories like utilities, Internet, cell phone, and rent. The ability to quickly get a total amount spent for these various categories within a specified date range proved to be immensely valuable.
We had an initial projection consultation meeting in November. I zipped off the amount spent for each relevant category needed. I gave him details about the square footage of my home office. He used that to calculate the percentage of my expenses on rent, utilities, Internet, cell phone, and maintenance that could be written off on my self-employment taxes.
Tiller made it so easy because I had taken the time to categorize and keep track of my spending. The same went for my business expenses too. I have my business debit card linked to my Tiller Sheet so I always mark purchases from that account as business expenses.
When we were finished filling in the details he asked, “What’s the name of that tool you’re using? I want to recommend it to some of my other clients.” I explained Tiller’s solution and he followed up a few weeks later asking me for the name of it again.
Between that initial meeting and the end of the year (and of course into 2016 too), I diligently tracked my spending from both my personal account and my business account. At his direction I also began to add a note for each transaction I categorized as a business expense describing why it’s considered a business expense.
Gathering my tax data was a breeze
In February, when it came around to actually completing my returns and filing my taxes, I created a separate spreadsheet that I shared with my accountant. I used my monthly pivot table to get the updated expense totals for each of the relevant categories for all the 2015 months in which I was self employed. I created a separate tab for the business expense line item transactions and notes, which I pulled from my Tiller Sheet transactions tab. My accountant had everything he needed to complete my taxes and it only took me about 15 minutes to pull it out of Tiller.
There are many tools to track personal finances, but Tiller’s biggest value to me is that I can create a finance spreadsheet that reflects me, my values, my business and personal finance goals, and how I think about and spend money. When it’s time for me to file taxes or check on my spending, the data is waiting there for me, organized just the way I want it. That is priceless to me.
*Heather is a member of the Tiller team and also manages her own digital strategy consulting business.