Expenses Checklist for your Organizing Business
Are you missing a lot of qualified expenses in your organizing business? I bet you are! Here is an expenses checklist for your professional organizing business. While this was originally designed to be for the end of the year, it’s a good reminder of what to be looking for and accounting for throughout the year!
This blog originally was as an episode of the Pro Organizer Studio Podcast. If you would like to listen, You can CLICK HERE or find us on Apple, Spotify, or anywhere you love to listen to podcasts!
We are halfway through December as I write this. We have half of the month left and we are getting into what for a lot of people is the holiday time of the year, where there are going to be family obligations and travel and all sorts of things. And so you might be thinking about, oh my gosh, I have so many things to cram in before the end of the year. So I do not want to add to your list of things, but I did want to come in here and do a mini-sode for you because I got a question this week in our Inspired Organizer coaching group. And this question, I thought, oh my gosh, I bet a lot of people have this question and they might not have answered it, or they might not have even thought about it. So I wanted to talk about expenses.
The question that I got was, “Hey, is Inspired Organizer and the other courses that Pro Organizer Studio has, are these programs deductible as business expenses?” to which the answer is rousing screaming from the mountain tops, Yes, they are, absolutely business expenses.
But the fact that that person asked that question was, first of all, she started out by saying, this is a dumb question, but it is not a dumb question at all. And it's a really good question. And it made me remember that, In the time that I have done coaching for organizers, this question has come up a lot. And I find out that there are a lot of people who are missing a ton of qualified business expenses in their business.
So before I get into this list of things, I want you to think about a couple of things. First of all, this is just my disclaimer. I'm not a lawyer, I'm not an accountant. I'm not a financial professional. So you need to obviously run any of these decisions through someone who is certified in these things. I'm just providing you a little bit of advice, but I'm not providing you legal or accounting advice, just giving you some ideas. And then the second thing is we do have a global audience in our programs, but a lot of the things I'm talking about—I know US laws much more than I know other countries’ laws. So when I talk about business expenses or deductions you can take on your taxes, obviously this is going to vary. It's going to vary even within the United States in terms of state by state, but it will obviously vary if you are outside of the United States. However, I think in many, many countries, Business expenses are deductible in some way. You just need to figure out what the rules are in your area.
I want to run through a few things that people might not think about in their businesses that are business deductions.
The first one that I'm going to talk about—there are a few things that I say “I'm willing to die on this hill.” Of the things that I have opinions on or a very strongly held beliefs about organizing businesses that I will shout from the rooftops. One of them is please do not charge your clients the credit card fee—the 2.5% or 3% which is the fee to take a credit card for your services. I have said many times, please raise your prices $5 an hour or something like that to cover it. But it doesn't feel good to me when I see that kind of charge. One of the other things that I remind people of is, you can deduct those fees, you have bank fees. You have finance fees, you have expense fees. All of those things are line items within your accounting software.
This is just my other piece of advice, which is get some accounting software. My first year in my business, I just used a Google spreadsheet, which I'm a big advocate of using Google products—Google has a lot of products that you can use for free to run your business when you're first starting out (Sheets, Docs, Forms, Drive, etc.) But I wish I would have started from the very beginning with a really robust accounting software, which PS isn't that expensive. I use FreshBooks. I love it. It keeps track of all these expenses so easily. So that's an example of something you might not think about—the bank fees and other fees that are associated with doing business, are often deductible expenses.
If you are just starting your business, you have some startup expenses. You might have had legal fees. You might've had accounting fees. For instance, I chose to start my LLC with Legal Zoom. So I pay Legal Zoom, a certain amount to be my registered agent every year. That is a deductible expense. Typically you are going to have some standard expenditures to keep your business running.
Think about like your cell phone, your website fees, your domain fees. Gmail—if you use the Google suite of products. I know my email is $6 a month and that may not sound like a lot, but do you know what? Every single penny counts. Any sorts of apps that you are using in your business—as an example, MileIQ. I love keeping track of my miles via MileIQ. It's the best app. I want to remind you use a mileage app so that you can make sure that you are counting every single trip you make to Target or the Container Store, to and from your clients—all of those miles, add up. I have thousands of dollars per year of mileage deductions and at least this year, I think the mileage deduction is 60.50 cents a mile. That really, really adds up. So please remember to track your mileage because that is a great tax deductible expense for you.
And so that is the deductible expense FreshBooks, which I just talked about that is, that is a service that I pay for. It is for my business. That's a deductible expense. So there are things that you have that go on on a monthly basis. Then you're going to have things that are once a year. Then you're going to have things that might be irregular, but I want you to make sure that you're keeping track of these because a little bit adds up to be a lot at the end of the year.
If you travel for your business—a great example, I went to the How To Summit in September—your travel fees, your rental car fees, things like that—a business trip that is often a deductible expense. Again, all of these things I'm going to remind you, make sure you check with your accountant.
If you are getting reimbursed from a client for a trip. So it is example, some of us do travel organizing. If you are getting reimbursed by the client for those expenses, you will mark it down in your accounting as an expense, you will be reimbursed by your client. So that will kind of cancel each other out, but you still need to count it as a business expense.
If you have a team, if you have employees. Or if you have contractors for your business, you will issue them—f they're contractors 1099s. Those are all deductible expenses as well, obviously.
Some more yearly expenses that you can think about—if you have any sort of fee associated to industry association. So if you are in NAPO, if you are a KonMari consultant, any of those things are deductible.
Your insurance—I have insurance by State Farm. A lot of people have Hiscox or Allstate, your liability insurance or your business.
Anything related to your Google. If you have done Google ads, if you have done any sort of Facebook or Instagram ads, all of those things are in there.
Any sort of networking memberships, if you are in the chamber of commerce, if you are in a women's networking group, the Polka Dot Powerhouse, any of those types of groups, those are things that you can put on there. I already talked about legal fees, your accountant, if you have an accountant for your business, which I always recommend, your accountant is a fee that you can deduct on your taxes.
Software subscriptions. So either annual or monthly software subscriptions. Canva pro $13 a month. My FreshBooks, my accounting subscription, MileIQ. The Microsoft suite of products, all of those kinds of software fees. And by the way, we sometimes have a lot of things that we use in our business. Make sure you're adding all those up.
If you use a CRM, if you use HoneyBook or dub Sato or any other CRM that has a fee. Put it on there it's deductible. If you have any sort of lead generation service, Thumbtack, Angi, find my organizer. The one that we recommend is Organizer Near Me. Any of those are also expenses.
Any sort of storage that you have for software. For instance, I have a Google drive to make sure I have backups of all of my business materials. That extra storage is like 9 99 a month. If you got books related to your business education, like for instance, I always recommend people read StoryBrand and Atomic Habits—any sort of books that you got related to your professional development.
Professional photos. If you got your photo taken this year by a photographer, boom, professional photographs for your business, for your website.
If you got your website designed by someone—business expense. Anything related to doing business or your cell phone? In many cases, you can look at the internet for your house. Most of us have home offices. If you do have a rented office space, obviously that's on there.
Office supplies, organizing supplies. If you are someone that brings a lot of supplies to your client's house, trash bags, your labeler label, equipment, anything like that—deductible expenses. Did you buy hardware for your business—a laptop, a printer? I digitize photos for my clients, so I got an Epson photo scanner that is a deductible business expense. Just a little hot tip for you. I had a client that wanted me to digitize photos and I looked up, you know, digitizing services. And then I had this moment where I was like, Hmm, I can pay $400 to get a photo digitizer. And then I can charge him hourly for my service. That photo scanner paid for itself and about two and a half seconds. I mean, I'm slightly exaggerating. It paid for itself in a few hours, but, there are things like that pieces of, of equipment that you might invest in, in your business and it can pay for itself very quickly.
Any sort of graphic design that you got. If you got a logo developed if you have someone design your website, any of those things—all business expenses.
Let's just take a second and talk about business coaching, since that's where this whole thing started. If you get business coaching from a qualified business coach, like us, Pro Organizer Studio is an LLC, and we are a qualified business. Any of our courses, if you took our Google business course for $19, or if you take Inspired Organizer for $997, those are deductible business expenses.
Everybody has different financial goals in their business. There are some people who try to maximize their expenses—they really don't want to have a lot of profit from their business. Everybody has different things that they're trying to accomplish. A lot of people like their businesses to break even at the end of the year. Not me! I have my business needs to make money so that I can pay for my life. But everybody has different goals. If you are trying to maximize some of those expenses for the end of the year, make sure that you are thinking about doing some business coaching or taking some courses, because that is a great way to do it.
This is really just designed to get you thinking, get your creative juices flowing about things that you spent money on in your business.
One tip I'm going to give you, and this has kind of added on to the scam podcast that I did a couple of months ago. But anything that you decide, this is more advice than it is. I'm adding something to your list, but anytime you decide to sign up for a service, like a business coach or any sort of service, make sure that you know what the cancellation policy is. As an example, I know someone this year who did not really realize that she was signing up for a monthly fee for a service that she didn't really need that was like $1,200 a month. She had a one-year contract with them and didn't realize it. So please make sure that you know what the cancellation policy is for anything that you buy, and if there is a one-year policy, then you need to say, Hey, this is going to cost me $5,000 for the year. What does that really look like for me and my finances?
Okay. This is a quick list, but I hope it was helpful for you to think about, “Hey, how can I get all these things done?” Just a friendly reminder. At least in the United States you have until 11:59 PM on December 31st, 2023, to get any qualified business expenses in for the end of the year for your taxes for 2023.
So if there is something you're looking at doing, get on that and sign up. And if my thing's happened to be one of the things that you want to join, I would absolutely adore that you can email me hello@proorganizerstudio.com and I will tell you all of the things that we would love to help you with.