Working for yourself comes with an unlimited amount of “pros”, including working from home, a flexible schedule, and unlimited earning potential. However, according to some self-employed people, doing your own taxes isn’t at the top of this “pros” list. With an accountant costing anywhere from $300-$500 (and up!), many accept this rate as simply the “cost of doing business”, however, that doesn’t have to be the case for all.
Why I Use TurboTax
I have used TurboTax before when I was out of college and in the working world with a straight-forward W-2 job, and TurboTax definitely made filing my taxes a seamless, pain-free process. The last few years, I’ve been using an accountant while working for myself and because I had several complicated state tax credits for the renovation of my historic home, now rental property.
With recent updates to the TurboTax software, I was excited to give it a try and see if it really makes doing your taxes easier. Easier than just handing off papers to an accountant? No, but the cost savings are pretty significant as you can file your taxes, even if you’re self-employed, for just $89 bucks, and I definitely felt this was worth the price and there wasn’t any hassle involved.
There’s a tutorial for you below + my tips and tricks for how to file your taxes with TurboTax.
How to File Your Taxes with TurboTax – The Complete Tutorial
Step 1 – > Create an Account.
Step 2 -> Tell them about your tax situation
As you can see, TurboTax is stepping up their game quite a bit, and you can now select a variety of options. This is way more advanced than what they offered even just a few years ago, and I was excited there was a button for every scenario I encountered this year, between my multiple streams of business and rental income.
I selected “Single”, “Own a Home”, “Own a rental property,” “Maximize Deductions” and “Own my own business/independent contractor.” PHEW!
Step 3 -> Select Your Plan
Based on what you’ve told them about yourself and your filing status, TurboTax will make a recommendation on the type of product you should use. I selected the “Self Employed” product for just $89.99.
Step 4 -> Tell them More About Yourself & Your Financial Picture
You can already see how easy and self-guided this is.
On the next two screens you’ll answer questions about marital status, and the kinds of financial transactions you engaged in over the course of 2016. One important thing to note is that if you are self-employed and did not work with a company as a contractor, you won’t select the “I Had a Job” button.
Pro Tip: If you had one of those years where you worked a job at a company and then left to work for yourself, you’ll select the “Had a job” button, and be prompted to enter in W2 information later on in the “Personal” section.
Step 5 –> Enter in self-employment information.
At this point they’ll do a “check-in” and it looks like this. If all looks good, continue. (But don’t worry, you can change it later if you need to!)
P.S. I’m really loving all the gamification TurboTax has done to their software. It makes doing my taxes fun!
Step 6 -> Finish entering in your personal information.
When you’re finished, TurboTax will recommend a filing status for you and do a summary of all your personal information. If all looks good, click continue!
Step 7 -> Choose How You’d Like to Enter in Your Information
Okay, here’s where you get to pick and choose. In one option, you can have TurboTax self-guide you, or you can choose what you want to work on. There’s no “bad” choice!
Which one you choose really depends on if you’re the type that sits down, files their taxes, and has all the paperwork organized and ready to go so you can answer the questions. If you’re working on your taxes little by little, you can choose your own sections to work on as the information becomes available to you.
Pro Tip: For convenience sake, I recommend selecting the “walk me through everything” button and if you don’t know something you can come back to it later.
Over the next few pages you’ll confirm your business name and address, and if you paid any wages. Wages apply if you have full time employees you pay with a W-2, or if you pay contractors (they’ll need a 1099.) TurboTax has the option to create these for your staff if you haven’t already done so.
Pro Tip: If you’re unsure of something, TurboTax has a lot of links to click on with thorough answers to your questions. See the “What paperwork do I need?” link above. Each step of the process has links like this on the page so you can proceed with confidence!
Step 8 -> Enter your EIN, Lookup Your Business Code, and Answer Questions About Your Accounting Method.
Keep going until you hit the business summary page. It will outline for you all the sections you still need to work on!
Step 9 -> Enter in Business Income
So, here’s where it gets a little more involved, but TurboTax still makes it super easy. If you’re a business owner, you should keep a simple Profit + Loss sheet totaling up how much you make and how much you spent on the business for each month of the calendar year.
Pro Tip: I know it can get a bit tricky, especially if you freelance or own a blog business. For myself, I entered in all of the income I got a 1099 for, and then subtracted that from what I earned and claimed the other as “General Income.”
Step 10 -> Enter in if you have any inventory.
Step 11 –> Enter in business expenses you’ll be claiming.
They’ve listed all of their “common” business deductions so you don’t have to worry about remembering them all. TurboTax will walk you through both mileage and home office deductions with ease.
Step 12 –> Enter information about your business assets.
Step 13 –> Continue to Personal Information, State Taxes, and Review.
Step 14 -> Now You’re Ready to File!
Pro Tip: TurboTax really does make filing your self-employed taxes a snap, but the process will go a lot smoother if you organize your records: The P+L, the receipts, and the 1099’s (if any) in one place before you get started.
Cheers to saving money and leveraging technology to make running a business easier in 2017! Were you surprised by how easy this process is?
*thanks to TurboTax for sponsoring this post.