I promised Sebastian I would open tax return posts with prettiness and promises. So, butterflies for you, Sebastian, and, “Hey, this only took sixty seconds, twenty six times in a row!”
And now to the nitty-gritty.
In my money-tracking software, I record personal expenses as well as business expenses. This way, I’m opening only one window and can enter everything in one go. This approach also allows me to easily assign one portion of my rent and phone costs to business and the rest to personal, while still entering each expense only once.
My big move for 2017? Finally rename my business categories to match those used for my tax return! So simple. (Why didn’t I think of this before??) Up til now, I’d always made my own categories—domains, legal, etc. For a tax return submission, though, the government didn’t care about that level of detail. So at the end of each year, I spent too much time totalling multiple categories to fit inside the government’s minimalist list. Craziness.
The simpler and faster we make these money jobs, the more likely we are to complete them. And when we complete them, we get more money…free!
In YNAB, I can select all expenses under a given category and reassign them to the newly-named one. Domains, webhosting, file backups, and printer ink are now under “Office Expenses”, the way my government likes them. Budget lines formerly called “accounting” and “legal” are now smooshed together under “Professional Fees.”
Now when I print out my expenses, they’re already totalled according to what I need to enter on my return. Simple.
To apply this tweak:
- look at your professional tax return’s expense lines for 2015
- write its expense categories into your financial tracking software
- merge your previously-entered expenses under one of the new, tax-friendly category names
All done? Plant a butterfly-friendly plant. They need us.