Are you approaching the end of the year with some apprehension about your photography business finances? I've been there too, but I've learned some things that I want to share with you that will give you confidence as you wrap up 2023.
Make a plan for taxes. A good CPA is one of the best investments you can make! Look for someone who not only files your taxes but can proactively advise you on how to save money on taxes and make tax time a little less painful for the taxes you due owe, by spreading out your payments throughout the year. When you find a good CPA, typically they will find enough tax savings to cover their cost and even multiply their cost and put it back in your pocket.
Consider last minute deductions. When you make a business purchase, that reduces your taxable income…aka you pay less taxes! Now, this doesn't mean that you should throw caution to the wind, go on a B&H shopping spree and say, "It's fine! It's a deduction!" It does mean that if there are purchases you have already been considering, and it makes financial sense, December is a great time to spend that money. We have a list of common photography deductions here.
Wrap up your bookkeeping. You simply cannot win with money in your business if you are disorganized and constantly behind. By the end of December, your bookkeeping should be close to wrapped up. If you haven't been keeping up with it all year, now is the time to catch-up! Step on the scale and see what happened this year. The result might surprise you. We've done many bookkeeping catch-ups that leave our clients surprised at how well they actually did and how much they actually paid themselves.
Build up your emergency fund. If your last quarter is your most profitable, don't spend it all! Open a savings account, if you haven't already, and build up your business savings. 3 months worth of expenses is a great place to start. If your income is unpredictable and fluctuating, as with many photographers, this buffer will save you many sleepless nights on those low income months.
The end of the year doesn't have to be a time of dread when it comes to your finances. If you make a plan to get organized, plan for taxes, and put in some hard work, you will end the year in confidence.
