But, navigating taxes as a self-starter isn’t all bad. One perk is that we can write off a lot of the expenses that keep our businesses running.
“Write-offs and deductions are very important as they help reduce your taxable income, hence [you] pay less taxes,” explains Yahaira Krahmer, founder of a virtual tax and accounting company called AccountHer.
Naturally, accountants are very busy leading up to the big tax day. But, I am so appreciative that Yahaira broke down everything you need to know about tax write-offs. Whether you’re racing to finish your latest return or want to pocket these quick and easy tips for later, I hope our conservation will make this tough task a little easier.
What are some general things self-starters can write off?
Yahaira: Some examples are home office deduction for those [who] work from home and have a dedicated space. Also, subscriptions like Canva, Adobe, Gmail, Audible, or a website server. Another one is investments for education and business development. Think: courses, seminars, books, coaching, and business conferences, for example.
Of course, write-offs can depend on your job. What’s your advice for those who are trying to figure out what’s a write-off for their business?
Yahaira: You can write off an expense as long as you can substantiate that the expense is ordinary and necessary in your industry or business, as per IRS guidelines.
How has the pandemic and shelter-in-place order affected what can be written off?
Yahaira: During the pandemic, many business owners were ‘forced’ to work from home, so the home office deduction was a very popular deduction for tax year 2020. On the contrary, the business travel deduction was very minimal.
How can self-starters keep tabs on their expenses and potential write-offs throughout the year?
Yahaira: Having your bookkeeping in order and reviewing [it] on a monthly basis is a key component [for] building a profitable and sustainable business. Also, hire a professional. When you don’t work with a tax professional, you oftentimes miss deductions and credits that can help reduce your taxes.
Hustler of the Week: Katie Gatti
What inspired you to become your own boss?
I should clarify that I haven’t made the leap *yet*, but I can already speak to why I want to. I’ve learned so much from Corporate America: the importance of process, strategy, and the basics of business. But, man, the bureaucracy, politics, and sometimes non-sensical nature of working in a giant corporation is stifling and frustrating.
As soon as I found work that made me lose track of time and stop watching the clock for once — a.k.a. writing about money — I knew it was what I wanted to do. I’m putting this out into the universe now: I want to take Money with Katie full-time by EOY 2021.
What is your favorite part about being your own boss? Least favorite?
When it comes to running Money with Katie, my favorite thing is that I hold the reins. If I want to launch something new, I do. I don’t have to run my ideas past anyone else, which has taught me to trust my gut implicitly. If something feels even a little off, I don’t pull the trigger. When ideas really excite me, I know I’m onto something that has the potential to take on a life of its own.
The downside, of course, is that the accountability falls squarely on your shoulders. There’s no senior manager or director looking over your shoulder [or] having charted the path before you. That’s why I think it’s so important for peer mentorship and having open, frequent conversations with other people running small businesses. Never stop learning.
What’s the biggest lesson you’ve learned since becoming your own boss?
The biggest lesson I’ve learned is that comparison is toxic. I struggle with comparing my content and offering to others in the space who may be growing faster or have larger followings. But, my friend Ella said it best: “A follower count on Instagram can’t measure depth of trust.” In a space as vulnerable as financial media, trust is paramount — and that’s why I’ve always found that trying to quantitatively measure myself against other creators is totally fruitless. There’s enough room for everyone.
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