The Tax Time Do’s and Don’ts For Freelancers

With tax time just around the corner we took the opportunity to speak with Freelancing Gems member and Accountant, Jessie from JGNQ Accounting about her personal small business journey and her tax planning tips for freelancers, small businesses and sole traders. 

Spoiler alert – her biggest tip: Become best friends with your accountant. 

When did you go out on your own and what inspired you to start your own business?

I decided to go out on my own about three years ago. I made the decision when I realised that I couldn’t help my clients the way I wanted when working under someone else. 

Working as an employee at an accounting firm, clients would ring me personally to discuss things – I became their trustworthy accountant. I saw an opportunity to contribute to the lives of freelancers and small business owners, and here I am, enjoying every single second.

What are your most important tax planning tips for freelancers?

It seems very basic but my biggest tax planning tips for freelancers are to always ask for the receipts, keep them and file them. 

When tax time comes, you don’t have time to look for the receipts on top of your daily tasks. You would be surprised how many people actually forget to keep the receipts and then forget to claim those expenses.

Copying, scanning and filing are too much, right? You can make a new photo album folder on your phone, then name it “Receipts” or something similar. As soon as you get a receipt, take a photo and save it in the Receipt folder. And, don’t forget to back up your phone!

There are also some fantastic apps to help you keep track of your receipts like Dext Prepare or Hubdoc. 

What are your biggest do’s and don’ts for freelancers, small businesses and sole traders at tax time?

DO:

Be best friends with your accountant. Share your business plan, share your feelings about your business. This will help your accountant understand your business more and see what they can do for you. Your accountant won’t judge how big or small your business goal is, but they will help put you on the right path to achieve your goal. Catch up every three months and finish your BAS on time. 

Whilst your accountant can’t run your business, they can definitely look at solutions that will work for you. Please remember the goal at tax time isn’t just to pay less tax on your business, it’s a great time to reassess your business status as well. 

DON’T:

Please don’t leave it till too late. The majority of freelancers, small business owners and sole traders only see their accountant once a year, which is so old school! 

If you only see your account at tax time and they do your tax return on, say, the 20th August 2021 for FY2021, then the accountant doesn’t have too many options to help you. You missed out the chance to have them assist your business plan and to do something more for your return. 

So I suggest you ask your accountant for a tax planning session with you before the year ends. And if they say no? Well is that accountant the right fit for you?

What business win are you currently celebrating?

The most recent business win to celebrate is that I became a treasurer for the not-for-profit organisation, The Social Effect. Being part of this NFP organisation that supports local businesses to strengthen the community and economy we live in & being able to give something back to the community is the best feeling ever.

So, with tax time right around the corner, now is the time to start getting a little closer to your accountant. And if they’re not the right fit for you, or you’re in the market for a new best friend, connect with Jessie on the Talent Board.