Content creation can be a great way to generate some extra income but if you’re considering taking it to the next level and turning your content creation hobby into a full-fledged business, there are a few things you should know to make the transition as easy as possible. Here are five essential tips to simplify accounting for content creators and help you avoid problems in the future.
1. Record Every Transaction
When it comes to keeping the books and preparing for tax time, it is important to have every transaction documented, including supply purchases, utility payments, contractor payments, merchandise sales, endorsement deals, sponsorships, affiliate income, advertising expenditures, gifts, and more. This will help you to know where your business stands, provide accurate financial reporting for loans and financing and ensure you have the documentation necessary to maximize your tax savings.
2. Open a Business Account
Mingling your personal funds with your business assets is never a good idea, even if you are the only person working for the company. Mistakes could easily lead to costly fees, fines, or worse. To make sure your business runs as smoothly as possible, open a separate bank account for all your business needs, from accepting client payments to paying bills or purchasing supplies.
3. Form a Separate Business Entity
If you run your business as a sole proprietorship or a partnership and your company is sued, your personal assets like your house or car may be at risk should you lose the case. By forming a separate business entity for your company, like an LLC or S-Corp, you can keep your personal assets protected. Plus, with a pass-through entity like an LLC, there is no additional tax burden as there is with a C-Corp.
4. Prepare for Taxes
One of the most challenging things about accounting for content creators is preparing your taxes. The process can be quite intimidating, especially if you are not used to itemizing deductions. By keeping receipts and listing every deductible expense for your business, like supplies, utility payments, travel expenses, and more, you can keep your tax obligations as low as possible and maximize your profits. For the most savings while remaining compliant with all tax statutes, its be best to work with a qualified CPA.
5. Invest in Accounting Software
Quality accounting software like Xero, QuickBooks, or FreshBooks can make it far easier to keep track of income, expenses, payroll, and more, and it is a valuable tool even if you are working with a professional CPA firm. The software makes everything easier, from filing taxes to making payroll or generating financial reports, and it can help your accountants do their job better.
Professional Accounting for Content Creators in Dallas
When you need a qualified team to help you with bookkeeping and accounting for your content creation business, call Gurian CPA in the Dallas or Houston area. We feature in-depth industry knowledge so that we can provide accounting for content creators that is tailored to your specific needs. We offer everything from basic business accounting and tax prep to business entity formation, payroll services, financial analysis, and more.
Call (469) 306-9866 today to schedule a consultation with our content creation experts at Gurian CPA in Dallas or Houston.
