or, How I Learned to Stop Worrying at Tax Time by Embracing the Bookkeeping There are three things guaranteed in life: Death, Taxes, and yep… Mondays. Around this time every year, folks (especially freelancers) start wondering: “Why did I...

or, How I Learned to Stop Worrying at Tax Time by Embracing the Bookkeeping

There are three things guaranteed in life: Death, Taxes, and yep… Mondays.

Around this time every year, folks (especially freelancers) start wondering: “Why did I save all my bookkeeping until the last minute, AND OH MY GOD I HATE DOING MY TAXES!!!“

I have a tiny confession to make: I love doing my own taxes. I used to have a big time fancy accountant (because I used to have a lot of big time fancy money), and when I suddenly didn’t have either, I was forced to learn how to do it on my own.

I’ve going to save you a lot of eye strain (and me a lot of keystrokes, so that I may reserve them for the financial memoir I will eventually write… one day… probably…maybe) and get right to the point:

It sucked.

HOWEVER, I figured out how to make it fun (-ish), and created my most detailed Google Sheet ever (you had to know that was coming), and now, I’m going to share the template with YOU.

CLICK HERE TO DOWNLOAD THE TEMPLATE

Am I a Wile E. Coyote level super genius? A math[s] whiz? A financial guru?

HELL no.

I started small, made a zillion adjustments over the years, and the biggest thing that kicked my bookkeeping butt from drudgery to dazzling (okay, that might be exaggerating, but never let it be said I’m not alliterate), was taking a 6-week financial empowerment class last fall from Morgan Garon, founder of Vibrant Money.

What this course did, in a nutshell, was teach me how to turn the toxic relationship I had with my money into a healthy one.

One of my biggest takeaways, was not to fear, but to embrace my bookkeeping and not only input what happened at the end of each month, but to create a Spending Plan to stay on the track at the beginning of the month, rather than randomly careening down a hill in a driverless car.

If you take the course (which I highly recommend if you have ANY fear around money–especially as a solopreneur/freelancer), Morgan will go into ALL those details. I can’t possible go into all that in a single blog post (nor am I an expert like she is.)

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Now, there isn’t enough time for me to get into all the little intricacies of how this chart works, but here are the basics:

SHEET ONE: MASTER

It’s based on simple data entry. Put the amounts you earn/save/spend into the corresponding box. If the box has a [$ — ] in it, it means there’s a formula, so don’t enter data there.I left my personal categories in there as an example for you. Alter as you wish, but do be careful about adjusting the formulas if you delete/add rows beyond what’s included.This chart includes both Personal and Business spending in a single chart, because I like everything in a single place. It also includes a section to note what I need to be putting into savings, so I am reminded to PAY MYSELF FIRST! (For the first time in my life, ever!)Because it’s so gigantic, I grouped each section so you can open/close them. Simply click the little plus [+] or minus [-] to the left of the group to expand/hide.When you look to the last two columns of the chart, you’ll notice your annual breakdown per category, as well as the amortized average per month (to help with next year’s Spending Plan!) This is what makes tax time a breeze – specifically, when it comes to breaking down and adding up your income and expenses! I’ve done my best to group each category into the same categories Turbo Tax asks for, so it’s a simple cross-reference, and voila! Amounts are already tallied and at the ready!

SHEET TWO: DAILY INCOME TRACKER

You’ll notice a second sheet, labeled “DIT” or Daily Income Tracker. This, admittedly, is kind of complicated when you first look at it. However, given the multiple income streams of most freelancers today, and delayed payments on invoices, and money earned vs money received each month, this was the easiest way for me to keep tabs on ALL OF THE THINGS in a single place.

Again, there is A LOT in here, but here are a few basics:

YELLOW SECTION: I track what I earn every single day when I do something that is invoice-worthy. (I work pretty much every weekday, but there’s not always something that has a quantifiable financial amount tied to it.) TEAL SECTION: Here’s where I put the stats: If there’s a finished hour component, I log the finished hours/seconds/minutes and my rate (and the labor hours, but that’s just me – that number won’t factor into the formula) which then calculates the green “$$$$ Earned” box. If it’s a single amount, I just plunk a “1” into the FH box and the invoice total, which will then auto-calculate the same way.GREEN SECTION: Once money goes into my account, I check the box, which then triggers the “$$$$ Rec’d” (money-received) parts of the chart. At the beginning of the year, I set an Earned Income Goal for myself, and then divide that by month and anticipated working day, so I know how on or off track I am to achieve my goal. For the sake of this chart, I chose $60K as an annual earnings goal. PINK SECTION: If you scroll right, you’ll see that this is where the monthly totals for each income stream live. You have to manually enter each amount you receive into its corresponding column because I haven’t figured out how to make the chart do that for you, but once I do… I’m pretty sure there’s an honorary doctorate out there for me.

WHEN YOU’RE DONE:

With each sheet, once your data is entered and you close all the grouped tabs, it makes a lovely tabulation that you can easily see at-a-glance; allowing you to make adjustments as needed, or, over time, reflect on your mad spending and earning skillz and treat yo’ self with a little dance party for being such a badass at data entry, and breezing through your taxes with all that information at your fingertips!

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Okaaaaaaaaayyyyyyyyyy… now that I’ve shown you my belly insofar as the true depth to which my obsession with spreadsheets lie (I warned you… the well goes DEEP), once you start playing around and run into any questions, plunk ’em in the comments below (to help others navigate the minefield) and I’ll pop in with (hopefully) the answers you seek!

Happy mathing! See you next week!

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