The fact that I spent Saturday morning on a course on the subject of tax with several other freelancers, says a lot about how much my life has changed recently.
The fact that I found myself thoroughly enjoying it and feeling it was the best money I’d spent in a long time says a whole lot more.
Upon starting freelancing I made the bold decision to do my own taxes. The forms seem relatively simple and by reading up online in various sources I’ve been able to piece together what I should/shouldn’t be claiming for.
Honestly, I’ve avoided using an accountant for fear that any money they may save me may have simply ending up being their fee. So it was great to have some questions answered and for the most part, to be told that I (along with the other participants who filled in their own returns too) were doing it correctly but could probably save a few more pennies as well.
With regards to the tax the second best thing I’ve done is to keep quite meticulous records of how much money has been coming in and how much money has been going out in the form of expenses. Keeping hold of all those bus tickets and purchase receipts is an arduous task that I’d rather not have to do but I’m rather do it as I go along instead of collating it all a week before my tax is due.
Without a shadow of a doubt, the best thing I’ve done is to save all the tax money in advance. Whenever an invoice is paid I automatically put a percentage of that away into a separate bank account and
do not try not to think about it. I even, and this is where you’ll hate me, put in more than I need to — roughly I should be saving 25% but I very strictly save 35% which is admittedly a struggle but that extra money is a welcome bonus at the end of the tax year when I need new equipment or a holiday.
I also try my best not to think of an invoice’s value as being all mine. If the invoice is worth £1000 I do my damnedest to only think of it as £700 (or even less). Sitting there thinking ‘I’m getting paid £1000 next week so I can go and spend £1000‘ would only lead to a tragically short-lived business career.
Admittedly, it can be an absolute wrench to be paid a sizeable sum of money only to realise a significant portion of that simply is not mine. This way of thinking definitely has to be factored into the rates I charge to people which is another reason why I turn away requests for websites at rock bottom prices.
I was very happy with the course and I’d be very interested in similar courses offered by the Accounting Firms in Atlanta that I found quite interesting, hopefully this helps with my business. I got to meet some very interesting people who weren’t web designers including make-up artists and TV directors and that made it even more interesting.