• How to Renew your LLC / PLLC (aka make annual report)

If you have an LLC or PLLC, you must ‘renew’ it each year to keep it going. Officially, it’s referred to as making your Annual Report. It’s quick and costs about $60. It’s due on the anniversary month of when you opened it.

Some reminders

This is different than your business license. Your LLC / PLLC is a legal entity that you created. It has its own limits, responsibilities and protections. It’s separate from you (like an 18 year old child). It can only practice business if you keep it alive and it is properly licensed. To keep it alive is a legal issue (vs. financial), that’s why we’re dealing with the Secretary of State.

Basic Info to Renew / Make Annual Report

TIME: 2 - 10 minutes
COST: $60
DUE: On the anniversary month when it was formed
Frustration Factor: 4 out of 10
WEBSITE: ccfs.sos.wa.gov/#/
GOVT: Secretary of State
HELP: 360.725.0377

Summary

Set up a profile if needed. Log in. Double check that your name and address is filled in for every role (governor, registered agent, executor, etc.). Get to the end, pay $60. Mark off your Important Dates List (Annual, Quarterly). Reward yourself!

Why?

LLCs / PLLCs were originally created for groups of people coming together to do business. Each owner is actually called a Member. The annual report is saying, Yes, it’s still going. Here’s who is doing which role. With bigger groups, this matters! For a single-member LLC / PLLC, it feels a little silly because generally we serve all the roles! By making this report, we confirming that all this info is the same.

Steps - Screen shots below

1 Go to SOS.wa.gov
2 Click on CORPORATIONS in the Top Nav to open the menu
3 Find CORPS & CHARITIES FILING SYSTEM
4 Sign in ….or create a profile, then sign in when directed
5 Find ANNUAL REPORT on the Left Nav
6 Search for your Business using your UBI or Name
7 Select your name from the List
8 Confirm all your information, make changes or additions if needed
9 Review
10 Add to Cart and Pay
11 Optional - print or save the pdf for your records
12 Mark as done on your Important Dates List
13 Reward yourself!

Screenshots


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Voila! All done for another year. Great job on getting another business chore finished. Having said that, I hope it was kind of fun and rewarding! Your work is still alive and kicking!

: ) Jenny Girl Friday

♥ ♥ ♥ ♥ ♥

P.S. Was this helpful? I sure hope so! If YES, please consider leaving a Tip in the Tip Jar. (Unless you’ve already given an Annual Donation.)

Have any friends with an LLC / PLLC? Forward freely!

Why tips and donations? I’m currently doing all of this work during evenings/weekends. It’s slow going to build this Apothecary on the side. With more funds, I can ‘buy’ more time each month to grow the collection faster. I’m hoping to some day earn enough so it can be a one-day-a-week job.

If NO, then send me your questions, or let me know where things are confusing. I’d love to clear it up for you and other folks! jennygirlfriday@gmail.com

• How to CALCULATE numbers for IRS taxes: pen and paper, spreadsheets, software

[Note: This is step three of the Prep for IRS Tax process.  To see all the steps, click here.]

In a nutshell

You need to report some numbers related to your business AND have some evidence to back them up (receipts, bank statements, etc.). How you add up the numbers is up to you! 

The numbers (eventually) get reported on the Schedule C.  If you use software or a tax preparer, they will ask you questions, then put those numbers onto the Schedule C for you.

Consider using the handy worksheets below to keep track of your numbers.


Alert: This blog post may look really complicated, and I apologize for that! It's tough because every situation is different, and I'm attempting to speak to a variety of situations in one post. ♥ Please know: once you get into the material, it usually starts to make sense. Also, I invite you to email me with any questions! jennygirlfriday@gmail.com

ProTip: Print the Calculate-Basic worksheet, and just start filling in what you know. Then come back to the post for more ideas when needed. 

ProTip: Get a friend to help you with this. They can read the instructions, then together, you can figure out how to proceed.

The Calculate-Basic includes everything you need for MOST situations.  The Calculate-Next Level is helpful if you're planning to file using paper forms, or if you want to predict your self-employment tax amount.



Gross Sales

AKA Gross Income / Total Deposits

Important: This number NEVER includes any sales tax collected. 

You need to have a total Gross Sales number, and a record to back this up. Perhaps you already have this total, or parts of it.......or perhaps you have to create it still.  Here are some options.


Different Ways to Keep / Create a Gross Sales Record

If you already have this record, great!  If you need to make one up for last year, read on! The basic process is:

1   Find the payment amounts
2   Make a Record
3   Find the Total
4   Format for the IRS

 

1 - Find the payment amounts

Here are all the places to look: 

- Bank Statements - look at deposit records
- Deposit Slips
- Copies of Receipts/Invoices
- Reports from Commerce sites
- Calendar - find all appointments and mark what you got paid for each

2 - Make a Record

Ideally, include the date, purchaser name, and amount of each.

These are options for you to choose from:

- Keep a list of all payments in a notebook
- Record payments in a spreadsheet
- Print out all summary reports from websites you use, keep as your records
- Use software or an app (such as Quickbooks or Fresh Books)

3 - Find the Total

Add up all your numbers to find your Total Payments by customers. This is your Gross Sales.
Do NOT include any sales tax collected.

- Use calculator
- Put into a spreadsheet, and use formulas to add
- If using software, go to the Reports section to get the totals

4 - Format for the IRS

Did you get any 1099-MISCs or 1099-Ks for your business? These are simply proofs of payments that someone else made to your business. The numbers on these forms should already be included in your Gross Sales amount.

> If you're filing with Paper Forms, then you just report your Gross Sales, which includes the totals on these forms. You do NOT need to list out their amounts separately. 

> If you're filing with software or an accountant, they will ask you for your Gross Sales in parts. So you'll need to find the subtotals for:

___1099-MISCs
___1099-Ks
___ All other payments (including barter)
___ Total of Gross Sales


Expenses

Okay, options! Here are three of my favorite. There are more options and variations. Hopefully this will give you an overall idea, and you can create something that works for you. 

Note: For evidence of our business expenses, receipts from the purchase are best. The IRS will also accept bank and credit card statements.

Pen and Paper

With Receipts

1. Look at the categories of business expenses (on the Calculate-Basic sheet or the Schedule C)
2. Make piles with your receipts in each category.
3. Add up the totals for each, and fill in the chart. Perhaps write these amounts on pieces of paper to keep track, one for each category.
4. Suggested: staple each stack of receipts together.

With Bank Statements

1. Look at the categories of business expenses (on the Calculate-Basic sheet or the Schedule C)
2. Get a piece of paper for each category, label at the top.
3. Go through Bank Statements. Find each business expense. Highlight, circle, or underline it on the statement.
4. Decide which category the expense falls in. Write each expense on the corresponding piece of paper. (For example, if you see a line for "Office Max", write the amount on the paper that labeled "Office Expense".)
5. When all expenses have been recorded, add up to get the totals. Record on the Calculate-Basic worksheet by category.

Spreadsheet

1. Look at the categories of business expenses (on the Calculate-Basic sheet or the Schedule C)
2. Label a column or separate tab with each category. (Depending on how you like to work.)
3. Go through your receipts and Bank Statements. Find each business expense. Highlight, circle, or underline on the statement.
4. Decide which category the expense falls in. Add it to the column or the tab.
5. When all have been recorded, add up to get the totals. Record on the Calculate-Basic worksheet.

Quickbooks or Other Software

1. Finish inputing/uploading all expenses for 2017
2. Find the Reports page
3. Select Profit and Loss statement
4. For the time period, select Last Year
5. Look at the report. Review each category.
6. Make any adjustments.
7. Print the Profit and Loss statement. Or, record the amounts on the Calculate-Basic sheet.


Special Expenses

These get calculated in special ways, so deserve their own section.

Special Expense - Mileage

There are two ways to deduct driving expenses. For each vehicle, choose one method and stick to it each year.

Option A:  Actual expense. (Less common)

With this option, you collect and report ALL costs associated with your vehicle: gas, insurance, repairs, maintenance, and tab renewals. If you use it part for personal and part for business, you need to calculate what percentage is used for business. Then take that percentage of the total costs. 

So, if you use for business 30% of the time, you'd deduct 30% of all costs associated with that vehicle.

Add this expense to the Car and Truck Category.

Option B: Mileage Deduction (most common)

For every mile that you drive for business, you get to deduct a specified amount. In 2017 it was 53.5 cents per mile. With this method, you need to know your total business miles. Additionally, you're required to have a record. The easiest way is to use an app, such as MileIQ. Or, you can keep a log book.

For most forms of filing, you'll be asked for:

___ Starting Odometer reading, on January 1
___ Ending Odometer reading, on December 31
___ Grand Total of All Miles
___ Total of Personal Miles
___ Total of all Commuting Miles (driving to and from an office)
___ Total of all Business Miles

To Claim the Expense:

If using Paper Forms
A. Calculate Total Business Miles x 0.535 =____________.
B. Add this to your Car and Truck Total

If using Software or Working with a Tax Pro
A. Have all of your Mileage Totals Handy
B. Do NOT include in Car and Truck expense
C. Provide information when asked, and they will calculate and deduct

Special Expense - Home Office

If you have a home office that meets certain requirements, then you can make a deduction. There's a Regular Method (that's complicated) to do this, and a Simplified Method.  I will only speak to the Simplified Method. To learn more, go to IRS.gov, or ask your accountant.

A. Decide if you meet the requirements: the space is ONLY used for business, and it is your principle work space.
B. Measure the Square Footage.
C. Multiply Square Footage by $5=_____________
D. If using Paper Forms, claim this expense on the Schedule C on Line 30. (It is in a separate place than other expenses.) Also, consider researching or asking someone about Schedule A. I have yet to learn about this.
E. If using software or working with a tax pro, input when prompted.

 


♥ If this is your first year..........hang in there........and just try your best! If you find out in the future that you did something wrong, or forgot some major deductions, don't worry, you can amend tax returns from previous years.

Actually, that goes for everybody. Just try your best. Take things one step at a time. Do what you can. Reach out for help: from a friend or colleague, email me, meet with a tax volunteer at the library, or your bookkeeper or accountant.

To read about options for Filing, click here.

For the next Tax Help Pop-up Shop, click here.

: )  Jenny Girl Friday

P.S. Know any other self-employed Seattleites who could use this information? Please forward freely!
P.S.2 Are you already signed up for Sidekick Services? If not, click here and join the list to receive tax + license reminders, how-tos, inspiration and more delivered to your inbox.

• IRS Taxes - Different Options for Filing, from Paper to CPAs and in between

Please note: this is an evolving blog post.

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I'm hoping to do continued research on this topic! (Perhaps with your help.) What you see below is what I know currently,  I'll continue to revise and refine this post over time. If you have any information, feedback, input, or questions, please get in touch!  Email me at:  jennygirlfriday@gmail.com.

There are several great options for filing your IRS Taxes.  This year, they are due on Monday, April 15th.

When you're self-employed, there are just two additional forms that get added to your normal taxes.  The Schedule C and the Schedule SE. They're not too complicated. (Schedule SE looks a bit crazy, but really, there's only a few lines that you need to do!)

If you're filing with software, online, or with an accountant, usually, they will ask you a lot of questions, and then put your info into the forms. (Coming soon....Click here to read more about the forms, and what information you'll need for each.)

Filing Options

Here's a list, from the most basic to the most formal. More details about each below.

♥ Paper Tax Forms
♥ Free Online Portals
♥ Online Portals / Software (For Purchase)
♥ Tax Preparers / Bookkeepers
♥ Accountants / CPAs


♥Paper Tax Forms

Prefer the Old Skool Way? Paper tax forms still work just great….though the new 1040 is a little more tricky. The IRS took 2 sheets……and turned them into 7 half sheets. Weird, right? Oh well, knowing you, you’ll figure these out like a pro since you’re used to figuring it out. A post coming soon showing the new 1040…In addition to those, you’ll also need to fill out the the Schedule C and Schedule SE. You can download these directly from the IRS.gov site, or find at many libraries. 

Variations

• Do on your own, using the instructions
• Get a friend for moral support and a 2nd set of eyes
• Use the Walkthroughs on the Business Apothecary, by Yours Truly (coming soon)
• Get free assistance at a Library, sponsored by the AARP
• Sign up for a Tax Pop-up Shop

Pros: You can see all your numbers. It's easy to double-check the information. It feels very satisfying and transparent.
Caution: Paper forms don't prompt you...so you might miss out on certain deductions, or credits.  Such as the state sales tax deduction. (I have to look into that one still!)


♥Free Online Portals

I believe there are a handful of free portals to use. Usually, these work for basic tax situations only. Some can handle self-employment taxes. 

One option is the IRS Free File.
Another is H&R Block, at hrblock.com
(Know any more good ones?  Please send my way!)

Variations

• Do on your own, using the instructions
• Get a friend for moral support, and a 2nd set of eyes
• Use the Walkthroughs on the Business Apothecary, by Yours Truly (coming soon) to help you prepare your numbers ahead of time.
• Sign up for a Tax Pop-up Shop to get assistance with the self-employment section

Pros: It's free! It'll know about current tax credits, deductions, etc. It will prompt you for all the information.
Caution: It can be hard to get support when you run into trouble. The graphics aren't as easy or pleasing to the eye. Sometimes, there are limits...such as you have to earn under a certain amount.


♥(For Purchase) Online Portals / Software ... like TurboTax

Have you already been doing your taxes online with TurboTax or something similar?  Then adding your self-employment taxes is pretty easy! The portal will guide you through a series of questions about your business, then it will do some of the math for you, and put all of your information into the proper tax forms (that get submitted electronically).

The golden standard is: TurboTax. A major benefit is....they are the same company that created QuickBooks. So, if you've been using those, it can be really quick to upload all your data right into TurboTax!

(Know any more good ones?  Please send my way!)

Variations

• Do on your own, using the instructions
• Get a friend for moral support, and a 2nd set of eyes
• Use the Walkthroughs on the Business Apothecary, by Yours Truly (coming soon) to help you prepare your numbers ahead of time
• Sign up for a Tax Pop-up Shop to get assistance with the self-employment section

Pros: It'll know about current tax credits, deductions, etc. It will prompt you for all the information. It's easy to use. Excellent help available.
Caution: Sometimes one can get lost in the process. The portals guide you through, but it's sometimes hard to go back to change things. There are often a lot of up-sells, and it's hard to know when you really need them or not.


♥Tax Preparer / Bookkeeper

Do you feel better working with someone? Is your situation fairly straightforward? Working with a tax preparer or bookkeeper can be a great option! These are folks who are trained in, and very experienced with, doing basic taxes. They are different than CPAs (Certified Public Accountants), and usually cost less. Want to know more about the difference?  Click here to read more on clearskybookkeeping.com.

Options:

H&R Block offers in-office assistance with using their portal, for a fee

(Know any more good ones?  Please send my way!)

Variations

• Go into an office
• Hire a consultant to come to your office
• Sign up for a Tax Pop-up Shop for preparation of very basic taxes, including self-employment

Pros: Working with a real person to lead you through the process. Get answers to questions. Preparers will prompt you for all the information. They know all the things to check for at the end. Gives you a natural deadline for your preparation part.
Caution: Different personalities (sometimes folks are not friendly), tax preparers/bookkeepers may or may not know some of the very detailed laws that apply to your situation. 


♥Accountants / CPAs (Certified Public Accountant)

This is the Cadillac approach! Accountants have a degree in their field, extensive training and experience with taxes, as well as a broader view of money in our lives, financial reports, investments, retirement, etc. They're who you need if you want to do any number modeling, get advice with decisions, do long-term planning, and more. 

Some accountants are also CPAs. CPAs have to answer some additional and very high standards! They must have a professional license, follow a code of conduct, and get continuing education. CPAs are a great choice if you: have a complex situation (own properties, stocks, divorce, etc.), if it feels reassuring for you to the highest level of training for doing taxes, plan to grow into an S-Corp or change to a non-profit.  

They will usually provide you with a questionnaire each year during tax season and a due date.

Options:

Many CPAs are moving to a subscription model, where you pay a monthly fee each month...and you get your annual taxes prepared + support year round. Some provide a quarterly check-in/tune-up plus annual filing. Personally, I think this is a great move!

Two CPAs with subscription models (that I've just learned about!) are:
• Timber Tax, with Luke Frye and Anne Chan at timbertax.co
• Hipster Money, with Alexandra Perwin at hipstermoney.com. (Website is still being developed.)
• Penny Smart Girl, with Meka West at pennysmartgirl.com

Some Accountants/CPAs are willing to do your once-a-year annual filing, and charge one fee for that job.

• Ballard Bean Counters, with Rose Westwood at ballardbeancounters.com

(Know any more good ones?  Please send my way!)

Variations

• Go into an office
• Work over the phone and online
• Hire a CPA who also handles your bookkeeping

Pros: Working with a real person to lead you through the process. Get answers to questions. They can give advice. They can often save you money by knowing all of the credits and special rules! Gives you a natural deadline for your preparation part. You can reach out for help via email or the phone.
Caution: Different personalities (sometimes folks are not friendly). It still takes work on your part to prepare for the Accountant. Sometimes the portals that accountants use can be confusing.


Heads Up ~

However you choose to file your taxes—and with whom—it'll still be up to you to have the numbers and evidence for them. That's where I've got you covered! (Coming soon - Click here for a workbook.)

A couple parting thoughts ~

*****You have the right to be treated well by whoever is helping you with filing your taxes!***** If you ever come across someone who's being severe, unfriendly, or acting like you should know this stuff........then I invite you to move on! Find someone else. You're hiring them to help you! Your job isn't to know this stuff! Your job is to do your work, then find the paperwork + numbers that they ask you to get.

+

It actually is rewarding to do taxes. :)  It sounds complicated. It interrupts your schedule. It can be confusing. Also, it is evidence of all the beautiful work that you did last year! Think about all the clients and buyers who benefited from your work! Look at all you accomplished! Every number represents income or expenses that you purchased to do your work. That's pretty cool.

Here's to a rewarding tax prep time!


Jenny Girl Friday

P.S. Know any other self-employed Seattleites who could use this information? Please forward freely!
P.S.2 Are you already signed up for Sidekick Services? If not, click here and join the list to receive tax + license reminders, how-tos, inspiration and more delivered to your inbox.

• Renew Your Seattle (City) Business License - December 31st

Your first TAX season hoop is here!  Renew your Seattle business license by December 31st.  Cost is $55 if you earn under $20K, or $110 if over $20K (plus fees if you renew online).  

Read More

• How to Set Up Your Business in Seattle - as an LLC 

A Bigger Splash , David Hockney • Credit below.

A Bigger Splash, David Hockney • Credit below.

Setting up an LLC business doesn't take much time!  ….That is, if you know what to do, what you need, and the right order of steps.  Here's where I've got you covered.  

(Not sure if you want an LLC?  Read Sole Proprietor or LLC:  Which is Best for Me?)

Below is the quick and dirty list.  Detailed notes are at the bottom of the post.  

If you know your business name(s), the whole process takes about one hour.

Go ahead, take the plunge!


Pro Tip:  Get a journal to record all your log-ins, passwords, IDs, and various notes as you go through the process.  Use in the future for all research and calls related to taxes and licensing. Read more in Make Your Life Easier! - Simple Tips For Keeping Track Of License And Tax Stuff

 

1)  Register your LLC.

Through:  the Washington Secretary of State
Click here to go directly to registration.
Cost:  $200
Time:  10 minutes

2) Pause + wait for your UBI

You'll need your UBI to go on to the next steps.  (Unified Business Identifier.) It's a lot like your social security number, in that it's a tax ID number assigned to you ... and banks and other organizations will ask for it to identify you.  It'll be provided along with your LLC documents.  Most often, it's in a 9 digit format.  Sometimes it'll be in a 16 digit format, where there are 0s and 1s at the end, noting your "business ID" and "location ID".

3) Apply for your state business license.

Through:  Washington State Business Licensing Service (BLS)
Click here to go to the Apply for a State License page on the BLS.WA.gov site
Cost:  $19 plus $5 for each DBA
Time:  15 - 20 minutes

4) Apply for your city business license.

Through:  City of Seattle
Click here to go to FileLocal-wa.gov, register then apply for a new license
Cost:  $110 for standard, $55 if you plan to make under $20K.
Time:  15 - 20 minutes

That's it!  You're in business.  …but you're not quite done.  To be legal, you need to ensure that you have all of the special permits and licenses for your line of business. 

5) Optional ~ Apply for an EIN

EIN stands for Employer Identification Number.  It's a tax ID number assigned to businesses by the IRS.  If you are a sole prop or a single-member LLC, you are allowed to use your SSN for business purposes.  Having said that, banks and online forms will often required you to have an EIN.  The issue is that the number formatting is different.  With your social security number, it looks like 000-00-0000.  With an EIN, it looks like 00-0000000. 

Good news!  It's easy, free, and only takes 10 minutes.  Here's the link:  Get EIN on IRS.gov.  Or, go to IRS.gov and search for EIN.  Heads up, this web service is only available during the daytime.

6) Do your due diligence.

At the state level, check the List of Licenses 
This is a list by trade, with links to relevant licensing agencies.  
Here's the list of Endorsements required by some businesses.
Or, call the BLS:  1-800-451-7985

And, at the city level, check the Regulatory Endorsements page.
Or, call the City of Seattle:  206.684.2489

Another nice tool is the WA Business Hub.  It's created to walk anyone through the setting up a business.  There's a TON on there.

7) Celebrate!

* * Please note:  The intent of this post is to get you started!  And, to provide you with the required framework for every business.  Your field may require additional permitting or specialty licenses not covered here.  For best results, call the city or state.  

Happy Working,
Jenny Girl Friday


Some Helpful Details

With the LLC Registration

Some things you'll be asked:  
        • the legal name of your company
        • 2 alternate names
        • start date - day of filing, or a specific date
                              (Tip:  pick one that's easy to remember or has meaning for you.)
        • perpetual or specific time period

Mostly, you will have to put your name and address in a million times.  Because, as a single-member LLC, you are the member, the manager, the agent, and registrar.  You fill all the roles.

Even though you will be a limited liability company, LLCs are handled along with the corporations.  

For the State Business License

Some things you'll be asked:  
        • the UBI - you get this when your LLC goes through - it is your Unified Business Identifier
        • what bank you'll be using
        • your SSN and your partner's SSN
        • description of your business:  1- 2 sentences
        • trade name(s)
        • which cities you'll be doing business in (you need a license for each one)

For the City Business License

Some things you'll be asked:  
        • the UBI - you get this when your LLC goes through - it is your Unified Business Identifier
        • estimated income