Helpful Tax Tool: Spreadsheet For Earnings & Deductions

If money and finances bore you, then this post probably isn’t for you. Come back next week and I may have a post about photography or something. However, if you geek out like I do about this kind of stuff, this may be a good little read. And actually, if you just go ahead and download the file I have here for you, you probably don’t even need to read any of this because it’s fairly self-explanatory. I’ll write it all out anyway just in case it can be useful to some people. Here goes…

I know I’m super anal about being organized (some would call me obsessive), and one thing I always have to be able to see at a glance and access quickly is my finances. It’s even more important to me because I have two income streams—a full time job and a part time side business.

Over the years I’ve developed a simple and effective Excel spreadsheet for keeping track of the money I make and the money I spend. When April 15th starts creeping up on me I simply send the document over to my accountant, and because of how I have everything laid out he can prepare my tax return without any extra hassle on either of our ends.

In this post I’ll go over how the spreadsheet is set up, and of course, give you a link to download a blank template for you to use and customize however you want.

If you don’t know how to use Excel, I’m sure there are plenty of online tutorials that can help you with the basics, but if you know the gist of the program you shouldn’t have any problems with this.

Download: Blank Tax Deduction & Earnings Spreadsheet

Basic Spreadsheet Breakdown:
Sheet 1 – Freelance Earnings
Sheet 2 – Freelance Deductions
Sheet 3 – W-2 Deductions

The first page of the spreadsheet is definitely the most fun to fill out because it’s for the money you are pulling in. The first column is for you to write a quick note about what the job was. The second column is for who you billed for the job. Next is the type of payment—cash, personal check, business check, wire transfer, etc. Then is the date that you received the full payment. After that is a column for the invoice number, and finally the amount of money you made from the job.

If you scroll down, there is a section for jobs that are pending payment so you can keep track of which jobs have not been paid for. This allows you to see who you should follow up with when needed, and also allows you to see a projection of how much you will have made once all of your invoices have been paid.

The “Pending Total,” “Total Income Earned,” and “Projected Earnings” fields will be automatically calculated as you enter figures into the “Earned” section (column F). It’s seriously like magic…

My advice is to fill this out as soon as you submit an invoice to a client and as soon as you receive a payment. But again, I’m anal and obsessive, and I wouldn’t do it any other way.

Blank Tax Deduction & Earnings Spreadsheet

The image here is condensed down for on-screen viewing, but the template you will download has more spaces for additional jobs when you scroll down.

The second page of the spreadsheet is the most detailed and complex (although still pretty simple), and is used for your freelance or side business tax-deductible expenses. I don’t know a whole lot about tax laws, but I do know that for most small businesses nearly everything you do or buy is tax-deductible. Never underestimate how far simple deductions can go and how much money they can help stay in your pocket when tax time rolls around.

The first column on this sheet is for you to write notes about the expenses you plan to write off. The second is to list any specific items you purchased. The third is where you put the date of the purchase. Then the fourth column is a field for tracking any mileage you incurred while out on the job—driving to and from photo shoots, meetings, etc. Finally, the last column is where you put the dollar amount of what you spent on the items listed in that particular row. Pretty simple, eh? I told you most of this would end up being self-explanatory.

You’ll also notice there is a dollar value added to the mileage at the bottom of that column. In the U.S., the 2011 standard deduction for miles driven for business is $0.51 per mile, so that field simply multiplies the miles you recorded by $0.51 to give you an approximate dollar amount you’ll eventually write off for all the miles you drove.

For people who work from a home or have a small office, there are fields for your basic monthly bills such rent, electricity, water, Internet, and cell phone. Of course, all of the sub totals and totals are automatically calculated. Maaaaagic!

Blank Tax Deduction & Earnings Spreadsheet

Again, the image here is condensed…the template has more on it than you see here.

The third and final page of the spreadsheet is for any tax deductions you will be making as a full-time employee when you file a W-2. The columns are set up the same as on the previous tax deduction page, but this sheet doesn’t have all of the extra areas for monthly bills.

If you submit expense reports to your employer and get reimbursed for things, then you don’t put any of those expenses on this sheet. However, I often drive places for my full-time job or buy things that I don’t expense to the company, and those are the items I put on this sheet. Again, don’t sell yourself short when it comes to taking tax deductions! That’s why these tax laws are in place—so people can use them to their advantage and keep more money in their pockets and pump it back into the economy.

Blank Tax Deduction & Earnings Spreadsheet

I think it goes without saying that I’m not a certified CPA, so don’t look to me for professional accounting advice. That being said, this is my system—it works for me, and I’m sure it will be helpful to some other people, so take it for what it is. As always, if you have any specific questions, post them in the comments and I’ll do my best to answer them so everyone can see.

Download: Blank Tax Deduction & Earnings Spreadsheet

If you found this post helpful, you may also like my post on using a net worth calculator (with spreadsheet to download).

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