Thanks! Yeah, I’m prepared to put aside half of my checks for taxes. Accounting should be simple since I basically have no expenses other than a laptop. Are you recommending I should buy accounting software?
@remizidae I would use (or buy) some accounting software before taking any tax or financial step.
Sure, you can use a piece of paper and a pencil to write up a summary of your income and expenses. (Some of our clients basically do this. Not many but some.)
You can also use an Excel or Google spreadsheet. (More of our clients do this.)
But what's really best is to get some piece of software to track your income transactions and their timing. And all your expense transactions and their timing. In real time as year goes by.
You don't need something very powerful if you're running a service business with a handful of monthly invoices and the occasional expense. But paper and pencil or spreadsheet and memory will mean you miss deductions and rely on others for timing transactions.
Note: If you miss one $200 expense over the year and your marginal tax rate is 50 percent, missing (forgetting) that one deduction costs you $100 obviously.
Software to look at: FreshBooks, Xero, the self-employed flavor of QuickBooks, Quicken if it's still around, any other "checkbook on a computer" program.