“Don’t fear failure, fear being in the exact same place next year as you are today” (Unknown)
This is a quote that really encapsulates everything we want to remember throughout the entire year. We are a firm that focuses on growth in ourselves, and especially in our clients. We know from experience that it isn’t always the big changes that make the difference in our businesses, though they are great, there’s also a lot of focus that can be put on the small changes for big results. Here are a few important points to make note of towards the beginning of the year to ensure that your end of the year is smooth. The goal? Setting yourself up for success.
There’s a good chance that you do a lot of commuting to engage with clients or complete a task. Did you know that you can get a tax deduction for all the miles you drive, especially if you are self employed? Self employed individuals enjoy the highest deduction rate as well as the fewest restrictions when it comes to mile tracking…so why not take advantage of it?
The 2018 mileage rates are: 54.5 cents per business mile, 18 cents per mile for medical or moving, and 14 cents for charitable purposes. You could easily put thousands of dollars back into your pocket via tax deductions by simply keeping track of exactly how many business miles you drive. We suggest using an app to take care of this for you, and our favorites are MileIQ and Quickbooks Self-Employed.
There are a few conditions you must follow in order to get your full deduction:
- You must log how many miles you drove, where you drove, when you drove, and for what purpose. This process is made easier by using the apps noted above.
- While driving from your office to work sites, driving to meet with a client for coffee, and even driving to get office supplies counts as business miles, driving from your home to any of these places does NOT count (no matter how many business calls you take on the road).
Knowing the 1099 requirements
How many times have you gotten to January and realized you still needed to collect W-9s? By collecting W-9s from people you subcontract as you go along you are guaranteed to make your life easier once January 31st comes along, which is the 1099-MISC Reporting Deadline.
Reasons to collect a W-9:
- You pay rent to someone who is NOT a corporation
- You were charged legal or professional fees
- You received help from a subcontractor or vendor
If your purchase exceeds $600, you must issue a 1099 to the subcontractor/vendor and all W-9s must be submitted to the IRS by January 31st. If you were to be audited and you deducted the expense without collecting the W-9, you could face penalties and interest for non-compliance.
We know that it’s easy to get behind with the flurry of all things “new year,” but by keeping these two items in check is a surefire way to make your end-of-the-year easier every time. If you have questions about 1099s or Mileage tracking we would love to offer more guidance, give us a call, send us an email, or reach out to us here.