As one year ends a new one is beginning it can be a fun but overwhelming time. As you review how the past year went and prepare for a new one there are tons of things that need to be done.
If you’re trying to figure out you need to do before the end of the year, get your freelance business ready for the upcoming year with this New Year checklist.
1. Estimate Next Year’s Taxes
Before prepping your taxes for filing get a clear picture of what your taxes will look like. Nothing is more stressful than not knowing whether you’ll owe money or be getting a refund.
Start by categorizing all your income and expenses. Hopefully you’re using a bookkeeping software or have someone who helps you with this. If not, I highly suggest you find one or hire someone!
Next, print off a Profit and Loss report or pull up any other income/expense graphs so you can see your entire year’s worth of income and expenses. GoDaddy’s Bookkeeping software allows you to pull up a Schedule C which has all the information you need to estimate next year’s taxes. Which is one of the main reasons I love using it for my freelance income.
You just need your entire gross income for the year plus all of your expenses, including big purchases, equipment, payments to contractors, health insurance, and the like.
You can also use a free tax calculator service to estimate what your taxes come tax season. Here’s one from H&R Block that’s simple to use and works great.
When you’re estimating your taxes for next year, these tips only apply if you’re a sole-proprietor or single-member entity LLC. If you’re a traditional LLC or partnership schedule a meeting with your CPA to do a tax estimate session, and make any additional tax payments or purchases if necessary.
If you need help estimating your taxes and keeping up with quarterly payments, check out my Tax Toolkit for Self-Employed Biz Owners.
2. Make Any Last-Minute Purchases
Depending on what your estimated taxes turn out to be, you may want to invest a bit more money into purchasing some courses, a new service, or launching a product. This will help offset any surplus of income you expect to earn this year, so you can pay less taxes.
I’m doing this with the new Client Connection membership library which is going to be it’s own site and video vault coming in January. I’m working with a developer to create the membership site and I paid a cartoonist to create a custom video for me.
This way I can invest in something I was going to create any way, without having to wait until next year to claim the deduction. It will help reduce my taxable income this year, since I earned a lot more than I did last year.
3. Evaluate Bookkeeping & Invoicing Software
Speaking of balancing out your expenses for the end of the year, do you have unpaid invoices from clients? Do you need to bill out any hours for client work you recently completed? Now’s the time to do this, along with evaluating whether or not you like your current bookkeeping software.
I actually use and recommend FreshBooks and GoDaddy Bookkeeping because they cater to freelance users and clients, have the ability track your time, print reports and estimate quarterly taxes and record payments. If you’re unhappy with the bookkeeping software, now’s the perfect time to switch.
The start of a New Year will allow you to organize your books and transactions from the beginning, without having to waste time transitioning everything later. Not sure which bookkeeping or accounting software is right for you?
Check out our in-depth reviews:
FreshBooks Invoicing Software
GoDaddy Bookkeeping Software
4. Review Your Health Insurance Policy
It’s not a fun process, but renewing your health insurance policy is a necessary evil. If you aren’t covered you’ll have to pay a pretty steep penalty when you file your taxes this year. But there are a few ways to get out of it.
However you don’t want to not have health insurance coverage and find yourself out of commission for a good period of time. You’re the one who brings in the money and pays the bills, so do yourself (and your family) a favor and get coverage. Or if you already have health insurance policy, review it and make sure it still covers your needs.
Since my husband and I just moved across the country, from Texas to Colorado, I’m researching a new health plan for our family. We may end up having to get separate policies since my doctors are still in Texas and he has a doctor here in Colorado.
If you don’t enroll in a 2016 health insurance plan by January 31, 2016 you won’t be able to enroll in health insurance for this year unless you qualify for a Special Enrollment Period.
5. Update Your Retirement Accounts
Much like making any last minute purchases, you may want to max out your Traditional or Roth IRA accounts to help offset any high gross income. In addition, it may be the perfect time to rollover your IRA or other retirement account to a Roth.
There will be some tax consequences with this (so be sure to speak to a financial advisor before starting this process) but having a Roth IRA is an awesome deal. You can withdraw money for qualified purchases without paying any penalties, and any interest you earn on the funds is tax free!
Review your retirement accounts, rebalance them as necessary, or initiate a rollover transfer so you can start the New Year off on the right financial foot. Your future will thank you for it — especially because you’re self-employed and don’t have an employer to help pay for your retirement.
6. Create Next Year’s Business Plan
As a writer and blogger I like to create my content plan for upcoming year a few months in advance. I do this in my quarterly reviews, but it’s also important to evaluate the big picture before the New Year starts.
What are your income goals for next year? Do you want to increase your traffic, subscribers, etc? Are you planning on diversifying your income by building your own brand and launching products? Do you want to book speaking gigs, or start hosting monthly workshops?
Write down the exact numbers for these goals. All of these things take time to plan if you want to execute them properly. This is something I’ve been working with all my freelance coaching clients about and we’ve created solid plans for the first few months of next year. This will help them reach their income goals as well as see their business grow.
I use and recommend the EPIC Blog Planner by Regina or The Badass Blog Planner by Sarah Morgan. These are planners that will help you create a solid marketing and blogging plan for your business and help you stay on track with your income goals.
7. Establish Personal Goals
While you’re working on your freelance business goals for the New Year, don’t forget to evaluate your personal goals too. Here at Careful Cents I’m a big believer in self-care and making sure you don’t get pushed to the bottom of the pile.
Do you have health goals, a personal milestone, want to buy a house, or move to a new city? These are all things that your business can help you achieve but you have to make them a priority. Just like your new business plan you need a plan of action for your personal goals as well.
List them out and write them down too. Be specific (but realistic) with your numbers and your plans to achieve them.
Don’t let them keep getting pushed to the back burner!
8. Make a List of Tasks to Outsource
You want your business to continuing growing right? You want to be able to earn more money but not necessarily work more hours. In order to do that you have to be open to outsourcing some tasks and certain projects to a Virtual Assistant (aka VA).
I know, you’re probably thinking you don’t have the time or money to hire someone to help you. Well, I’m here to tell you THAT’S NOT TRUE! I’ve had several team members and VAs even when my business was still a side hustle.
Yep, I was only earning an extra $2,000 from my side hustle ventures when I hired my first assistant to help manage my Facebook community. You don’t have to start out with a huge list and a mega organization plan, just start small with one task and then grow from there.
Get out a piece of paper and write down 3-4 tasks you can outsource right now. Maybe they’re things you can’t do, or projects you just can’t seem to make time for. Put them on the list. I promise you, once you start hiring help it will be addicting because you can get so much done in such a short amount of time.
If you’re ready to get started with a Virtual Assistant check out my new course, Clone Yourself: Outsourcing for Control Freaks and Cheapskates.
9. Find a Coach or Accountability Partner
This should probably be #1 on the list because of how effective it is and the return on investment you’ll see right away. If you’ve been thinking of hiring a coach, now’s the time to test it out. Or if you’re not quite ready for that seek out an accountability partner who can help you stay on track.
I’ve worked with a business coach for the past 3+ years and I also have several mastermind groups and accountability partners. And not just for my business either. I have an accountability partner for my weight loss and health goals, as well as a mastermind group for the new book I’m writing.
Where can you find a coach or accountability partner? There are lots of places but I’d recommend asking a fellow blogger, freelancer, or friend who works with someone. See who they recommend and why.
You could also join a private Facebook group, like The Careful Cents Club, and find other business-minded people who are looking for an accountability partner.
Get the End of Year Checklist
Ready to get your end-of-year finances and freelance business in order? I’ve created a simple New Year checklist you can download for free.
Get the New Year checklist!
Get a handle on your business before tax season sneaks up on you and takes you by surprise. Use these tips to be prepared for next year, so you can pay less taxes and keep more of your hard-earned money.
The post Is Your Freelance Business Ready for the New Year? Top 9 Things to Tackle appeared first on Careful Cents.