Recordkeeping Fundamentals: NEW! Online Module for Self-Employed Taxpayers
Few entrepreneurs go into business because they love keeping detailed records of their business finances. Many, instead, launch a business in pursuit of self-fulfillment, independence, personal satisfaction and even necessity. Still, sound recordkeeping is essential for tracking business performance, making critical adjustments to improve performance and for tax purposes. Even the most talented entrepreneurial makers and doers often need some guidance when it comes to keeping accurate, timely and organized records.
The tax filing season is a built-in, structured opportunity for self-employed individuals to get organized and learn good recordkeeping habits. Preparing for tax time, though a hassle in the short-term, can reward entrepreneurs over the long-term in ways that eclipse the brief stress and complexity brought on by getting and staying organized. Not only does early and thorough preparation for tax filing help entrepreneurs acquire and maintain better control of their business finances, a study on the behavioral triggers that incent business owners to keep better records showed a significant correlation between preparedness and clients’ tax refunds: the more prepared a client was, the higher their tax refund.
CFED and the NCTC have partnered to develop “The Fundamentals of Recordkeeping,” a brief online NCTC University course that takes self-employed individuals from start to finish through the recordkeeping process. The material guides the client from the basics of determining their self-employed classification, to the rationale behind keeping good records, the types of necessary supporting documents, the details of tracking expenses, depreciation, business use of home and more, testing their comprehension through quick quizzes along the way.
VITA programs and other community-based tax assistance programs are powerful intermediaries that can help microbusinesses get a handle on their finances at tax time and introduce them to a host of products and services that support small business development and asset building. We encourage programs to inform their volunteers and clients that this course is available and to keep an eye out for flyers and handouts they can provide to their clients.
Guest blog post by Lauren Williams, Program Manager, Affordable Housing & Entrepreneurship at CFED.
CFED empowers low- and moderate-income households to build and preserve assets by advancing policies and programs that help them achieve the American Dream, including buying a home, pursuing higher education, starting a business and saving for the future.