• Self-Employment Tax Organizer

    Self-Employment Tax Organizer

  • Tracking and recording business income and expenses that meet IRS record-keeping requirements can be a duanting and stressful task.  This self-employment organizer will help guide you through this process in a step-by-step process. 

    How to Use this Organizer
    Our goal is to prepare a tax return that accurately reflects your business income and all legally allowed deductions.  This organizer helps us meet this goal by:

    1. Asking questions IRS and state taxing agencies require us to ask.
    2. Informing you about important record-keeping requirements.
    3. Allowing you to submit required accounting records and tax documents to us.
    4. Giving you the opportunity to provide additional information you believe we need.
    5. Providing space for you to ask tax questions you would like your preparer to answer for you.

    We encourage you to take time to carefully review and answer all questions in this organizer.  Where indicated, please attach or otherwise deliver requested documentation and records.  You can stop and save your progress, then return to this organizer at a later time.

    Record-Keeping Requirements
    The IRS enforces reporting and record-keeping rules required by federal law.  All businesses are required to maintain income and expense records.  Record-keeping requirements are described in IRS Pub 583 Starting a Business and Keeping Records, which we encourage you to read. 

    Generally IRS requires you keep two kinds of records for all business expenses you incur or pay:

    1. Proof of the expense - such as a receipt or log, and
    2. Proof you paid the expense - such as a cancelled check, bank statement, or credit card statement.

    If you have questions about recordkeeping requirements or need guidance on how to prepare your records prior to delivering them to us, please schedule a Business Consultation or Intake Interview.  with our staff.

    Categorizing Business Expenses
    IRS requires businesses to categorize expenses. Personal living expenses should never be included or mixed in with business expenses.  Examples of business expense categories identified by IRS include:

    • Advertising, promotional, and marketing
    • Depreciation and amortization
    • Wages and salaries
    • Rent - Buildings (not home office)
    • Rent - Equipment
    • Interest on loan funds used for business purposes
    • Travel
    • Meals
    • Entertainment
    • Auto
    • Repairs and maintenance
    • Continuing education to maintain or advance knowledge required for your business

    Personal expenses
    Personal expenses are not deductible as business expenses, although certain personal expenses may be deducted on Schedule A, or claimed as a tax credit.  Examples of personal expenses that should never be included as business expenses include:

    • Charitable contributions
    • Mortgage interest
    • Property taxes
    • Commute expenses (auto, bus, tolls, parking)
    • Education to qualify for a new profession, such as obtaining a college degree
    • Meals, including meals eaten while you work

    Business Use of Home
    Expenses related to business use of your home should not be included with business expenses.  If you used your home for business, you will need to provide information about expenses you pay to keep up your home.  We ask for these expenses in the Business Use of Home part of this Organizer.

    Correcting mingling of personal & business expenses
    Sometimes business owners will pay a personal expense from their business account, or pay a business expense from their personal account. Care should be taken to properly record these events in the business records, as shown in the table below.

    Use of funds Identify transaction as:
    Personal expense is paid from business account Owner Draw
    Funds are transferred from business account to personal account Owner Draw
    Business expense is paid from personal funds Owner Contribution
    Money is transferred from personal account to business account Owner Contrbution
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    • Clearing Errors 

    • Most fields in this Organizer are mandatory and must be completed.  You will not be able to submit this Organizer if required fields are not completed.

      At the end of this Organizer you can click "Review" to see if you have missed entering required information. You need to correct all RED fields before you can submit.

      Occassionally there will be an error message that you cannot see.  If this happens:

      1. Use the "Save" and "Email" buttons at the bottom of the Organizer to save your work and email yourself a copy.  
      2. Go to your email box and click on the link to reopen this Organizer.
      3. Click "Review" again to see error messages.
      4. Complete/fix error messages and then submit.

       

    • Information About Your Business 
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    • Business Records 

    • Record-Keeping Requirements
      It is permissible to keep your business records in a variety of ways, so long as the records accurately reflect business income and expenses. Many small businesses subscribe to online accounting applications such as Wave Accounting or QuickBooks Online.

      Online Accounting Applications
      If you use Wave, QuickBooks or another online accounting application, please send an accountant invitation to view your online accounting records to: quickbooks@pnwtax.com.

      QuickBooks Desktop
      If you use the desktop version of QuickBooks, please upload an "Accountant Backup" to your secure portal, or deliver it on a UBS drive to our offices.

      Excel, Google Sheets, Numbers or other spreadsheet
      We need you to attach an Excel (xls) or csv formatted copy of your spreadsheet. Please do NOT send invitations to login your shared spreadsheet.  

      NOTE: If you use Apple Numbers, please export your spreadsheet into a cvs or xls format that can be opened in Microsoft Excel.


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    • Business Income 

    • Federal Reporting
      Federal treatment of income and expenses may vary depending on where your business had income and the type of income it had.

      State Reporting
      If you did business in more than one state, you will need to provide us with a breakdown showing the amount of income earned in or from each state. Generally, you are considered to have earned income in a state if any of the following apply:

      1. You provided services in the state
      2. You shipped products a state and had "Economic Nexus" under the laws of that state
      3. You had employees in the state
      4. You had a business location in the state

      Regional Reporting
      Some localities impose local income taxes, sales taxes, and/or gross receipts taxes.  If you had income from a locality that imposes taxes, you will need to provide us with the amount of income earned inside that locality.  Examples of locality taxes include:

      Multnomah County - Preschool for All Income Tax
      Multnomah County - Business Income Tax (BIT)

      Metro - Supportive Housing Services Tax

      Trimet - Payroll and Self Employment Tax

      Lane County - Payroll and Self Employment Tax

      County Income taxes are assessed by some counties in the following states:

      • Indiana
      • Colorado
      • Iowa
      • Kansas
      • Kentucky
      • Maryland
      • Michigan
      • Missouri
      • New Jersey
      • Oregon
      • Pennsylvania
      • West Virginia

      City Reporting
      Some cities impose income taxes on businesses operating inside their boundaries.  If your business received income from services or other operations conducted inside a city that imposes an income tax, you may need to file a return with that city.  Examples of cities with income taxes include:

      • Portland, OR
      • Louisville, KY
      • Ohio, nearly all cities have a tax
      • New York, NY
      • Washington D.C
      • Baltimore, MD
      • Kasas City and St. Louis, MO
      • Philidelphia and Pittsburg, PA
      • Wilmington, Delaware
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    • Oregon Business Activity 

    • City of Portland Business Registration and BZT Number

      If you engaged in any kind of business or rental activity inside the City of Portland, or Multnomah County, you are required to register your business with the City and obtain a BZT Number.  The City changed its business registration system in 2022 and gave registered businesses new BZT Numbers.

      What is a BZT Number?
      A Portland BZT Number is an account number issued to businesses that have registered with Portland's Revnue Division.  Account numbers begin with "BZT-" and are followed by 10 digits.

      Business with existing Revenue Division registrations
      Do you already have an account with Portland's Revenue Division?  Find out by using their Business Lookup Tool.

      Business that are already registered with the City can obtain their BZT number in any of the following ways:

      1. Call 503-823-5157,
      2. Email BizTaxHelp@portlandoregon.gov, or
      3. Create a PRO Username account on Portland's Revenue Bureau website.  
        • Carefully review what infomration you will need to gather and have it ready,
        • then following instructions and prompts on the site to create your PRO User Account

      Registering a New Business
      If you have not already registered your business with Portland's Revenue Division, you are required to do so.  You can register online, as follows:

      1. Go to the Portland Revenue Bureau website
      2. Under Business and Payroll Taxes, select Register My Business
      3. Carefully review what information you will need and have it ready
      4. Follow website instructions to create an account with the City



    • Business Expenses 
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    • Home Childcare Provider Information 

    • Child Daycare Daily Meal Log

      If you operated a home-based child daycare business, you can claim a daily per-diem amount for the cost of meals you gave to children in the course of your business. You can claim the daily meal expense instead of tracking the actual cost of meals and snacks you provide to children. 

      To claim the daily meal allowance, you need to keep a daily log which includes information for each child you cared for.  The log must track all of the following:

      1. Name of child
      2. Date 
      3. Time arrived
      4. Time left
      5. Number of breakfasts
      6. Number of lunches
      7. Number of dinners
      8. Number of snacks
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    • Auto/Truck/Vehicle Expense Records 

    • Business-use of Auto
      If you used your automobile for active conduct of your business, you can claim expenses for business use of your vehicle, subject to the following conditions:

      1. You must have proof of business use in the form of a mileage log or a written calendar unless you can show your vehicle was 100% business use.
      2. You may be eligible to claim a standard mileage rate or claim actual operational expenses for your vehicle. 
      3. Commute expenses are not deductible.  Commute expenses are costs you incur driving from your home to your regular place of work and any parking expenses you pay at your regular work location.

      Records You Must Keep
      Regardless of which method (standard mileage rate or acutal expenses) you use, you must maintain written records to support your deduction.  

      Standard mileage rate records you must keep include:

      1. Mileage log or calendar showing places and distances you traveled to for your business, and
      2. Oil change and service records that show odometer readings taken at the time your vehicle was serviced, and
      3. Interest paid on a loan you took out to purchase the vehicle, and
      4. Parking and toll receipts, and
      5. Records from the purchase or sale of the vehicle

      Actual expense records you must keep include:

      1. All of the same records required for the standard mileage rate, plus
      2. Bank or credit card records showing you paid auto expenses, and
      3. Receipts for auto expenses, such as gas, oil changes, maintenance, repairs, etc.

    • IRS requires you to report your commute mileage.
      Commute is the distance you drive to and from your regular place of work. Do NOT include commute miles in your business miles.

      1. My daily round-trip drive to and from work is:
      2. On average, I used my auto to commute to work:
      3. I commuted to my regular place of work during the year.
      4. The number of weeks I did not commute due to vacation/illness/other reasons during the year was:      
      5. The vehicle(s) I used to commute to work were:      

         

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    • Auto #1 

    • Please provide the following information about Auto #1.

      1. Description of the vehicle:  
      2. Pick a Date   you first used this vehicle in your business.
      3. Pick a Date   you purchased this vehicle.
      4.  of the vehicle.




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    • Auto #2 

    • Please provide the following information about Auto #2.

      1. Description of the vehicle:  
      2. Pick a Date   you first used this vehicle in your business.
      3. Pick a Date   you purchased this vehicle.
      4.  of the vehicle.
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    • Auto #3 

    • Please provide the following information about Auto #3.

      1. Description of the vehicle:  
      2. Pick a Date   you first used this vehicle in your business.
      3. Pick a Date   you purchased this vehicle.
      4.  of the vehicle.




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    • Auto #4 

    • Please provide the following information about Auto #4.

      1. Description of the vehicle:  
      2. Pick a Date   you first used this vehicle in your business.
      3. Pick a Date   you purchased this vehicle.
      4.  of the vehicle.



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    • Employee Information 

    • Please attach this tax year copies of all of the following:

        Description Number per year
      1 Form 941 - Employer’s QUARTERLY Federal Tax Return 4
      2 Form 940 -Employer’s Annual Federal Unemployment (FUTA) Tax Return  1
       3 Form OQ - Oregon Quarterly Tax Report  4
       4 Other state quarterly reports 4 per state 
       5 Form W-3 - Transmittal of Wage and Tax Statements 1 
       6 Form W-2 - Wage and Tax Statement  1 per employee
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    • Cost of Goods Sold (COGS) 

    • Business such as restaurants, retail sales and manufacturing generally must account for cost of goods sold (COGS).  COGS includes all costs associated with manufacturing a product or purchasing inventory for resale.

      You must subtract from COGS, the cost of any items withheld for personal use.

       


    • Assets Purchase for Business Use 

    • Depreciable Assets

      Amounts you paid to purchase a fixed asset that has a useful life of more than one year must be depreciated and should not be included with the cost of supplies and materials.  Examples of assets that typically must be depreciated include:

      • Buildings
      • Computers
      • Equipment
      • Fixtures
      • Furniture
      • Land
      • Leasehold improvements
      • Vehicles

      If you had this type of expense, it needs to be separately tracked and reported on a depreciation schedule.  Information that must be tracked and reported for each asset includes:

      1. Description (such as computer model, property address, or other identifier)
      2. Purchase date
      3. Cost (including delivery and installation)
      4. Percentage business use

      Asset sales

      The following information is needed for any business-use assets that were sold or otherwise disposed of during the year.

      1. Description of asset sold
      2. Date purchased
      3. Prior depreciation claimed
      4. Date sold
      5. Sales price
    • Business Use of Home 

    • You may be able to claim expenses for business use of your home if one of the following is true:

      1. You maintain a space in your home that is exclusively used for your business, or
      2. You store inventory in your home, or
      3. You operate a child daycare business from your home.
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    • Travel Expenses 

    • Travel Expenses

      You can claim costs of traveling outside of the area of your tax home for business purposes. 

      Record-Keeping Requirements

      Travel expenses must be clearly categorized.  To claim travel expenses, you must keep the following records:

      1. Proof of the expense (such as a receipt, invoice or online vendor record)
      2. Proof you paid the expenses (such as bank or credit card statement)
      3. Proof of the business purpose of the expense (such as a calendar showing how you spent your time while traveling for business.

      Categorizing Travel Expenses

      Travel expenses must be categorized as follows:

      1. Transportation (such as airfare, bus, taxi, train, car rental)
      2. Meals and incidentals
      3. Entertainment
      4. Lodging

      If you charged meals, entertainment or other purchases to your room, these amounts must be subtracted from the cost of lodging and properly allocated to their correct categories.

      Meal Per Diem Allowance

      You can claim the actual cost of meals or you can claim a daily meal allowance.  You can alternate between these methods, for each business trip, however for any one trip, you must claim actual or daily allowance, not both.

      For your own travel, you may claim a daily meal allowance instead of claiming the actual cost of your meals.  The daily per diem amount varies depending on the city and country you traveled to.

      Travel expenses of employees, you may choose between claiming the actual cost of employee meals and lodging; or you can reimburse the employee a daily per diem amount for meals and
      lodging.

      Information needed to claim meal per diem

      The following information is needed to figure your daily meal per diem:

      1. City you traveled to
      2. Number of days in the city
      3. Departure and return days from home
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