Fall is a time of reflection and slowing down, before things ramp up for the holiday season. So take an afternoon to set yourself and your business up for success! You’ll likely experience the payoff and feel more in control of your money before the December time crunch.
Track down deductible expenses
As a self-employed person, you already know that paying taxes hurts (the average contractor loses 25%-30% of their income to taxes). Thankfully, you can deduct most of your business expenses which lowers your tax bill. It’s by far the easiest and most effective way to preserve some of your hard-earned cash.
If you haven’t been consistently tracking your business expenses throughout the year, now is the perfect time to hunt down all those receipts and find them a home. And even if you have, go through your bank statements for any small purchases you may have missed — every dollar counts!
Speaking of things that add up to savings, if you drive for your business, mileage is tax deductible and solopreneurs constantly underestimate how much they drive — which means a missed opportunity to save.
Tracking mileage automatically with an app means you never have to touch a paper mileage log or scroll through a note in your phone. Besides tracking your drives, MileIQ also lets you create organized, easy-to-read reports that you can send to an accountant or the IRS as proof of mileage.
Review estimated tax payments
If you’ve been paying quarterly taxes throughout the year but your income changed, now is the best time to reassess. Track down all the self-employment income you earned so far, plus any income you expect to make before end of year, and re-do the 1040-ES form — if your income increased you may need to pay more in taxes for the fourth quarter, or less if your income decreased.
Check in on your savings
Saving for retirement is notoriously challenging as a self-employed person, but it’s absolutely essential since contractors don’t have access to 401(k)s with matching contributions. Fall — before the holiday season really kicks off — is the perfect time to learn about your options and set some attainable savings goals. Most freelancers are eligible for an individual retirement account (IRA) which can help you get started with savings.
If you already have an IRA, double check you’re happy with the amount you’re contributing and your investment choices. If you don’t, now is the perfect time to make adjustments. In case you find yourself in a particularly good financial position, it’s also the perfect time to max out your contributions for the year.
Reassess your income goals
Assessing your income goals is a good idea any time, and lots of people set new financial goals for the new year. But getting ahead of the end-of-year crunch means you can enjoy the benefits sooner — whether that’s higher income, a better work-life balance, or both.
Take a look at your finances, living situation, and any upcoming changes and decide whether or not the revenue you bring in makes sense. Then make a plan to start taking steps in the right direction, whether that means learning new skills, reaching out to new clients, or paring back your workload intentionally.
Plan for time off
Taking vacations as a self-employed person can feel downright terrifying — when there’s no work, there is no pay — but all the more essential because small business owners wear many hats. With the holidays approaching, now is the perfect time to design your own vacation policy.
Decide how much you’ll need to make, down to the dollar, so you can start making plans ahead of time, whether that means taking on a few more projects or setting aside more of your income into a savings account.
Incorporating at least some of these money habits into your business now has benefits well beyond the upcoming holiday season, helping you build a foundation for a more secure financial future.
Key takeaways
Many people associate new habits and goal setting with the end of the year. But when it comes to your financial health as a freelancer, getting started today can lead to more holiday savings and a calmer start to the year. Fall is the perfect time to:
- Track down your deductible expenses
- Review estimated taxes
- Check in on savings (including retirement savings!)
- Reassess your income goals and decide if the amount you bring in fits your lifestyle
- Plan for time off (and how much money you’ll need when you’re not working)
An important part of forming better financial habits is surrounding yourself with the right tools. If you drive for work and track your mileage by hand, you may be missing out on savings. MileIQ tracks mileage for you — there’s no extra work on your part, just get in your car and start driving, and the average driver sees 20% higher mileage deductions.
