Outright - Your small business simplified.

When I began running Fritz & Fräulein, I was the one-woman show for everything from the branding and marketing to the design and production of my pieces. The last thing I wanted to think about was accounting - and to echo the sentiments of so many fellow small biz owners: who really has time to?

Enter my number crunching savior: Outright.

Outright is a cloud-based accounting software that helps small business owners organize their finances and prepares them for tax time in an easy, smart way by pulling accounts into one, easy-to-navigate place.  It seamlessly syncs with all your online e-commerce sites, such as Etsy, Big Cartel, eBay, your own personal selling site and the like, along with PayPal and your bank accounts. You choose what accounts to to sync it with and it will download and automatically categorize transactions all the various transactions on a nightly basis, in a way the IRS expects, to keep your taxes organized and you up-to-speed on where your money is coming and going.  Needless to say, it makes keeping track of your business financials clear cut and easy-to-understand.

One of my favorite Outright features is the business tracking portion, which has fantastic charts and graphs to help you keep track of who's buying, how much money you're making and sales by state.  Oh yeah, and by-the-way, this part is free (and always will be).  Even the tax portion, which breaks everything down for your Schedule C / 1099-K, is free until the end of the year and is only $9.99/mo starting in January.  This, to me, is so worth avoiding the tax headache of trying to do it myself or pulling transactions into one of the more complex programs like Quickbooks. No, thank you.

Not only is Outright incredible for helping so many of us simplify our small business accounting (10,000+ Etsy sellers and counting!), but they're one of our sponsors for this weekend's Etsy New York Holiday Handmade Cavalcade!  Click here to set up your free account and let Outright do the rest.

See you at the Cavalcade!

-Stacy / Fritz & Fräulein

Etsy New York thanks Outright for sponsoring the Holiday Handmade Cavalcade!

What: Holiday Handmade Cavalcade

When: Saturday & Sunday, December 1st and 2nd

Time: 11am - 6pm

Where: The Space, 50 North 3rd Street (between Kent and Wythe), Williamsburg, Brooklyn

More information about our other sponsors, goodie bag contributions, our awesome food vendors, and other Cavalcade news is coming up, so stay tuned!

I Filed a Tax Extension in April. Now What?

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If your finances were out of control in April, you may very well have filed a tax extension. While a tax extension doesn’t extend the time you have to pay what you owe Uncle Sam (darn!), it does give you until October 15^th to get your paperwork together and file your income taxes. Of course… October 15^th is now rapidly sneaking up!

So what the heck do you do now that the time is almost up? Well, first of all, don’t panic. There’s still time even if you haven’t given taxes a single thought since April. But make no mistake – it’s time to get moving!

Filing, Not Paying…Maybe

Remember when you filed for your tax extension back in April you still had to pay? That was because the tax extension only worked for the actual paperwork and not for the payment. However, also remember that you probably didn’t pay the actual amount you owe.

Why? Because you had to make an estimate on your payment and send that in. Now you’re going to have to figure out the real amount you owe(d). This amount may be much different than what you sent before since you may not have taken every expense or bit of income into account.

Once you figure out the real amount you owe to the IRS just send it in with your filed paperwork. If you overpaid back in April, you’ll get a refund.

Still Time to Get Organized

If you’ve barely looked at your taxes since April (or plain forgot about them), it’s definitely time to bite the bullet. Hopefully you’ve at least organized your receipts and other paperwork so you can pull it out and get started. If not, might as well start there!

Make sure you have everything you need before you start. There’s nothing more infuriating than calculating all your deductions and then discovering another box of receipts. You only want to do this once so you can get it done with!

Pro Tip: If you still need help, use your free account with Outright. Calculations are much easier when we do it for you!

After you figure out exactly what you owe, go ahead and file. The IRS suggests using efile, their online payment system. If you’re filing via snail mail, make sure it’s postmarked by midnight on October 15^th! If not, you may incur penalties and fees.

If you need more tax help, make sure to come on over to our Customer Care Center and ask away!

This post is brought to you by Outright.com, the easiest way to manage your small business finances online.

What to Do if You Catch a Tax Mistake

There’s probably no worse feeling than realizing you made a huge goof. And when that error is on your taxes? Forget about it – sheer panic. You already sent in your 1040 and Schedule C to the IRS, so game over. Might as well jump ship and move to Australia.

At least, that’s what you would do if you didn’t already know about the 1040X. Wait, you don’t know about it? Well, let’s fix that right now! The 1040X is one of the handiest of the tax forms as it’s practically saved thousands of people from having heart attacks for years. It’s definitely one to know about.

What Is the 1040X Form?

The 1040X, or the Amended US Individual Income Tax Return form, is a way for you to send in a corrected version of your tax filings. If you ever realized after sending in a form that you forgot to include a 1099 or include a deduction (or put in one too many!), this is the form for you.

This year, one of the big selling points of the 1040X is the existence of late 1099-K forms. Some online sellers have even gotten them only a few weeks before the deadline! This meant that they had most likely already filed and now had a completely new form to file. Luckily, the 1040X was there to save the day.

The actual form takes a little while to complete. This is mainly due to basically having to do everything twice. You have to include the information that was incorrect on your original filing, also making sure you include the corrected version of everything.

You have up to three years after the initial filing was due (for instance, for 2011 taxes you would have to file the 1040X by April 17^th, 2015), so there’s no huge rush. Take your time and get everything right the first…well, second time.

Particulars of the 1040X Form

There are a few particulars about the 1040X that are worth mentioning. For one, we mentioned taking your time to get everything right. Well, the IRS even says they recommend you wait until you get your refund or later before filing the 1040X. Why? Who knows, but it shows they’re not worried about getting your amendment instantly.

Also, there are a multitude of reasons to file an amended return. Did PayPal send a really late 1099-K? How annoying, but at least you can fix it. Just realized you could’ve deducted a portion of your mortgage and utilities because you operate your business out of a dedicated home office? That might result in a much larger refund – send in a 1040X as soon as you can.

If any of your fixes include a revised schedule such as a Schedule C to detail self-employment income and expenses, it’s a good idea to fill out a new one and send it in with the 1040X. Finally, make sure to be as detailed as you can when explaining the changes just so there’s no confusion on either end.

Need more time for taxes? File a tax extension!

Oh no! Taxes are due and there’s no time to complete them! My deductions aren’t ready and I don’t even all the receipts I need in anything resembling an order! What am I supposed to do?

If you found yourself saying these very things with the tax deadline approaching, it may be time to file for a tax extension. Yes, they exist, and work surprisingly well. All you have to do is file one simple form and voila, you have a lot of extra time to get everything ready!

But is it really that easy? Does filing a tax extension come with unforeseen consequences? Let’s take a look.

Filing

Presumably after reading the opening you probably just want to know how to file for an extension, so we’ll cut to the chase. The form you want is Form 4868. It’s an astonishingly simple form for one with such power, and only takes a few minutes to fill out. You can also file your tax extensions using online services like Turbotax Easy Extension. Though those services do charge you a small fee, they can save you the effort of finding and mailing the 4868 form. No matter how you file, you can buy yourself a six-month extension on the time you need to pay your taxes.

But there’s one major caveat you must remember when filing a tax extension. As you fill the form out, you’ll notice the information you provide is pretty basic: name, address, etc. However, the second part of the form asks you how much you owe.

Wait, what? How are you supposed to know how much you owe if you haven’t filled out your forms yet? The whole point of this was that I didn’t have time to file!

The problem is the tax extension covers your actual tax filing and nothing else. So when you send Form 4868 into the IRS, you must also submit a payment toward it by the tax deadline – this year that’s April 17^th. However, you don’t have to have an exact amount. You just have to figure out how much you estimate you owe. (Outright.com can help… sign up for a free account and estimate how much you owe in taxes today!) When you do file, you will either pay the remainder of the amount you owe or receive a refund.

What To Do After

Now that you’ve sent in the paperwork to push back your due date (and a check how much money you owe, right?), what do you do now?

You’ve been granted a six month pass on your taxes, so use it wisely. Get as organized as humanly possible. Find all those missing receipts and count up every last penny you think you can deduct on your taxes.

Don’t waste this time as it’ll be over before you know it. You want that estimated payment to be either on the money or too much so you get some in return and avoid penalties. Plus, the IRS doesn’t exactly hand out free passes all the time, so when they throw you a bone, milk it for all its worth!

Getting organized during this time can also help you in the long run. After all, you’ve probably always wanted to get your business into tip-top shape, so now’s the opportunity! Get all that paperwork into order and keep it there. Then come next year there won’t be a need to file for an extension.

This post is brought to you by Outright.com, the easiest way to manage your business finances online. Sign up today for a free Outright account!

Money – It’s not a Dirty Word!

Wallet by LolaFalkDesigns

Last week, I was speaking to a crafter who sells on Etsy. I asked her how she manages her money. Her response may sound familiar: “Oh, yuck! I’m not a corporate type – I don’t pay attention to that stuff.”

In my job working with Etsy sellers at Outright.com, I see this happening again and again – many crafters don’t want to think or worry about money. It is scary to them and is something they avoid.

Yet, knowing where you are spending and making money in your business is critical to making a crafting business work. By keeping an eye on your finances, you can make decisions about what expenses to cut, how much to charge customers, when you can afford to invest more in your business, and what products you should be selling.

It doesn’t have to be scary and it doesn’t have to be avoided. In fact, paying attention to your business’ money situation can be rewarding and helpful. If you simply pay attention to two things: 1. Where is your business spending money and 2. Where is your business making money, it can mean the difference between a great business that supports your lifestyle versus needing to close down shop to take a “corporate” job. (And, who wants to do that?)

So, don’t avoid your money situation – take a small amount of time each week to take a quick look how you are doing financially. Your business will thank you.

About the Author:
Laura Messerschmitt is the Vice President of Marketing at Outright, a free online accounting software for small businesses. She loves helping the self-employed and small businesses to be more successful and grow their businesses.