time Archives - Tanya Brody

Tax Time Tip: How to Deal with 1099s in Your Small Business

April 10, 2023 by Tanya Brody 2 Comments

This post was originally written in 2017. However, most of the information dealing with a 1099 from your clients or for other freelancers and small business owners is still the same. If you have questions about a 1099 you’ve received, or whether you need to issue a 1099 to someone you’ve paid for freelance or contract work, please consult a Certified Public Accountant (which I am decidedly not.)

Okay, it’s the beginning of April which means tax season is in full swing. For those who are way ahead of the curve and have already filed taxes for this year, yay you. Nicely done, now go enjoy a well-deserved break.

For the rest of us small business owners who habitually put this task off until the last minute, here is a useful, easy-to-understand, humorous post about 1099s. These tend to be the forms that affect us the most. And they can be confusing.

Running your own small business is a lot of work. I’ve done it for most of my working life. Taxes tend to baffle me personally, but there are a few things I know that are very important when it comes to filing mine.

I figured I can’t be the only person who wonders about the great mysteries of filing taxes, so I decided to write this post. I hope it helps you, as you try to figure out this part of being a small business owner.

First, let me state upfront that I am not an accountant. I don’t answer tax questions. In fact, I ask my accountant tax questions regularly, including for this blog post. If you have questions after you read this post, I recommend you talk to an accountant or call the IRS.

That being said…

What is a 1099?

A 1099 is a tax form that you receive for certain types of income. These range from cancellation of debt and interest income to social security benefits. Each type of 1099 has its own designation. The one that concerns most small business owners is the 1099-MISC, which is used to report non-employee income.

If you’ve ever been an independent contractor or freelancer (like me) you’ve probably gotten these before. It’s a form with your information and the information of the company you worked for at the top. Then it shows a whole bunch of empty boxes, and one box filled out with how much that company paid you.

Thanks to the IRS for this example of a 1099-MISC.

I know, it seems like a lot of work for one little box. But it makes the IRS happy, which is always in your best interests.

Your 1099 tells the IRS that you were paid a certain amount, usually “non-employee compensation.” There are a bunch of other possible reasons you could receive a 1099-MISC. For instance, maybe you earned rental income or royalties. Or you received a “golden parachute” payout, or punitive damages award from a court case.

If you want more information on everything a 1099-MISC can be used for, I recommend checking out the IRS instructions for filling one out.

Who Should Get a 1099-MISC?

If you worked as an independent contractor or freelancer for a company and that company paid you $600 or more, you should receive a 1099-MISC from that business. Yes, this is true, even if that company is another solopreneur or one-person small business, like you.

By the way, that means if you worked with a freelancer or fellow small business person and you paid them $600 or more, you may need to fill out and send them a 1099-MISC.

Why do I mention this? Because we’re small business owners. We have a heck of a lot of other stuff on our plates and sometimes it doesn’t occur to us that we need to deal with these forms. We do. It’s good practice for our own businesses, and it’s helpful to everyone we work with, to make sure we’re all on the up-and-up when it comes to reporting income to the IRS.

I’ve filled out and sent 1099s for various companies I’ve owned. It’s not that complicated.

You can order the forms from the IRS here.

The above link also has information about filing those forms electronically, which is a new, free service as of January 2023.

Once you have the forms, you fill in your business information at the top, along with your social security number or employee identification number (EIN). You do the same for the person you paid. Then you enter how much you paid that person in box 7, titled “non-employee compensation.”

You submit Copy A of your 1099-MISC, along with form 1096, to the IRS. Form 1096 is a summary of all the 1099s you sent to your contractors.

You mail copy B to your contractor.

You keep copy C for your own records.

If you use programs like Quickbooks and TurboTax, Intuit offers an online service where you can fill out and print, or email, your 1099s to your contractors and freelancers, then submit them to the IRS, along with your 1096.

Are there other factors involved? Probably. This has been my experience in the past. The IRS updates forms and the rules to use them every year. Again, if you have questions, I recommend contacting an accountant. Not only will they be able to answer your questions, they can fill out and submit the 1099s for you.

What If I Didn’t Get a 1099 From One of My Clients?

An excellent question, and the very one I asked my accountant today. Here is his response:

“It’s the responsibility of the client paying you to obtain the information necessary (via Form W-9) to prepare and file a Form 1099 for certain payments made to you. You have no responsibility for making sure that a Form 1099 is issued to you and there is no potential penalty to you for not receiving one.

That said, the mere fact that you didn’t receive a Form 1099 for any income received does not relieve you of the responsibility of properly reporting and paying tax on that income. The same holds true for both domestic and foreign clients.”

– James Randall, Barneke and Anderson

To translate what Jim said into non-accountant:

If you’re supposed to send someone a 1099, you have to ask them to fill out a W-9 form. The W-9 gives you all the information you need to issue a 1099-MISC to them. You can find the W-9 form here.

If you’re supposed to get a 1099-MISC from someone, and they don’t send it, you’re not in trouble if you file your taxes without their 1099 form.

However, you do have to report, and pay taxes on, your income, whether you received a 1099 or not.

Did This Blog Post Help?

I know I’m not an expert on taxes. That’s part of the reason I wrote this post. I wanted to put an important part of being a small business owner into as simple a form as possible.

Another thing that should be as simple as possible is writing emails to your subscribers. Yet, like taxes, it’s one of those things many of us put off because it feels complicated and overwhelming.

I’m going to share a secret with you here. Your subscribers have a “Nurture Email Type” they’re most likely to open, read, and buy from.

Once you know your subscribers’ Nurture Email Type, it makes writing that weekly email a breeze. Much easier than doing your taxes! Plus, you’ll be creating a steady stream of new and returning customers, and making more sales.

Discover your subscribers’ Nurture Email Type by clicking on the button below to take my quiz.

DISCOVER YOUR SUBSCRIBERS’ NURTURE EMAIL TYPE NOW

My 3 Favorite Business Tools to Help with Productivity

January 24, 2017 by Tanya Brody Leave a Comment

One of the biggest hurdles to overcome when running your own business is finding the time to do all the stuff that it takes to run your business. The day-to-day work can be overwhelming.

Fortunately, there are a lot of companies that create business tools to make it easier for us small business owners to do what we love.

Here are three of the business tools I use every day.

Timely

Keeping track of how much time I spend on any given project has always been an issue for me. I’d vaguely observe what time it was when I started and vaguely estimate how much time I’d spent when I was done. Not terribly efficient.

Enter Timely.

I looked at, and tried, a few different time tracking apps before I settled on Timely as one of my regular business tools. I like it because it is sleek, easy to use and gives me exactly what I need to keep track of time spent on each project, but doesn’t pile on a bunch of extra stuff I’ll never use, or that I already have through other apps and programs.

Timely lets me track my working hours by project and client. I can bill different projects at different rates, if I need to. I can also set a certain amount of money or a specific amount of time for a project, and Timely will tell me when I’ve gone over that amount, and by how much.

Because I typically bill by the project, this helps me determine how much I ‘really’ made per hour when I go over my allotted time or budget. It’s good for helping me estimate future projects and noting if the number of hours for the project need to change.

I can also look at reports on what I’ve done. This helps me keep track of the project and what I need to do next. I can also export the report in Excel or as a PDF, to send to clients.

Timely integrates with several apps, including Google Calendar, Trello, GitHub, Asana and Office 365. Timely will automatically enter the time I spent on work appointments. This is great if I forget to start the timer once I’m on a call, or at a meeting.

Timely also has great customer support. Any time I have an issue or I’m confused by something, they’re always quick to respond with useful information or to help me fix the problem.

Timely offers a free plan, but it limits the number of projects you can have running at a given time. It also allows for multiple users, depending on the plan you choose.

Timely is keeping me on track, by tracking the amount of time I spend on each project. It’s fantastic. Learn more about Timely here.

Calendly

Setting appointments is one of my least favorite time-wasters. I hate sending emails back and forth with, “Can you meet at 2:30 on Thursday?” Only to hear back that Thursday won’t work, but how about next Monday.

To avoid all of this, I use Calendly. It’s a fantastic scheduling app that integrates with my Google Calendar. I just send someone a Calendly link for the appropriate type of appointment, they go to the app, choose a time we’re both available, and book the appointment.

We’re both sent a calendar invite, which goes right into my calendar, so I don’t forget. I can schedule reminder emails to go to the person who booked the appointment, so they don’t forget either. They can cancel the appointment from the reminder emails if something comes up, and Calendly prompts them to reschedule immediately.

On my end, I can send different appointment types of varying lengths, with buffer times on either end to make sure I don’t overlap appointments. I can control the times clients can schedule appointments, and I can block off certain days if I know I’ll be unavailable.

It’s a pretty slick system.

Calendly integrates with several apps and programs, including Drip, Salesforce and Zapier. They also have an API key and webhooks available for those who are more proficient at programming than I am.

Calendly does offer a free account, but your appointments will have Calendly branding on them. It’s not terribly intrusive. If you only have one event type (one type and length of appointment you need scheduled) it’s a great free scheduling solution.

If you have multiple event types, like I do, want to send appointment reminders and integrate with other apps, you’ll have to go with a paid account. The Premium account is $10 a month or $96 a year, per user.

Calendly has made my life a lot easier when it comes to scheduling appointments with clients and I recommend it highly. Learn more about Calendly here.

Quickbooks Online

I’ve used Quickbooks to handle my billing for years. Before that, (back in the dark ages) I used Excel spreadsheets. Not a fun game, I don’t recommend it unless you’re really good at Excel spreadsheets. I’m not.

Life in general has moved online. So has Quickbooks. It’s a fairly simple system to use, especially if you’ve used Quickbooks in the past.

I can create and email invoices to clients from the desktop interface. I enter a client’s contact information and Quickbooks sets up the email for me, then sends it when I’m ready. I can create recurring invoices and send them monthly to my retainer clients. They go out automatically, so I don’t have to think about them.

I have control over how the invoices look, including adding my logo, changing colors and specifying which columns and fields appear on the invoice. It’s very similar to designing an invoice in the desktop version of Quickbooks.

I can also accept payment via Quickbooks. I had to sign up for this service, and there are fees. It’s 50 cents per direct deposit and 3.5% of a credit card payment. But it’s worth it to have clients pay directly from their invoices.

All of my business bank account transactions are downloaded into Quickbooks, so I can manage everything in one place. The download interface is easy to use, though it took me a few times to get used to using it. Quickbooks automatically enters any payments made through its system into my checking register, as well as the fees it takes for letting me use that system.

Quickbooks offers a free 30-day trial. I pay about $16 a month for the version I use. There are several different versions, depending on the size of your business, number of users, etc.

Using Quickbooks online has made my billing and accounting much easier. Learn more about Quickbooks here.

What Productivity Business Tools Do You Recommend?

I hope this round-up of business tools to increase your productivity helps. I’ll keep doing these posts as I have more tools to pass along. Meanwhile, what business tools do you use? I’d love to hear about them. Perhaps I’ll end up adopting them myself, and mentioning them in one of my future posts.

How to Stay Focused When You’re Having a Distracted Work Day

August 30, 2016 by Tanya Brody Leave a Comment

A distracted work day. You know the kind of day I mean. You sit down to get some work done, but the mojo just isn’t flowing. You can’t produce whatever it is you’re supposed to be producing. (In my case, it’s writing.) It’s not that you’re blocked or you don’t know what you’re doing. You just can’t stay focused.

So you sit there staring at whatever it is you should be doing. (In my case, a blank page in Word.) And since that doesn’t help, you decide to go putter around on Facebook. Where you waste half an hour of your precious time.

Still nothing. (Grrrrr)

So you get up to do something, and promptly forget what it was you were going to do. You end up staring out the window at the squirrels chasing each other around the yard, or something similar. Until you snap out of it and realize you’re supposed to be working.

When you’re a small business owner, this can be a serious problem. You have to stay focused to stay in business. You know you have to get your work done. But the only person to keep you on task is… well… you.

If you can’t buckle down and get your work done, you’ll have some very disappointed customers and an empty bank account. Not a good combination.

So how do you get yourself back on track?

Here are 4 ideas on how to stay focused when you work for yourself and you’re just not able to concentrate on your work.

Walk Away for a While

Yes, this sounds counter intuitive. But it works. If you’re unable to concentrate on what you’re doing, get up and do something totally unrelated to what you’re trying to accomplish.

Here are the things I tend to do when I can’t stay focused:

Go for a walk: I find that getting out of my house and clearing my head helps me get back on track when I get back to my computer (or whatever it is I’m doing).

Do a couple of chores or errands: I spend a few minutes tidying the kitchen or putting in a load of laundry. If I can run a short errand, I’ll do that to get myself out of the house and out of my own head.

Do something in the same general field, but not directly related to your current project: For example, I sit down and read books or articles on marketing. I usually find something that inspires me and helps me to continue with the project I should really be working on.

Work on a Different Project

I know that as a freelancer, I like to have several projects I’m working on at once, so if I get stuck on one of them, I can pick up another and stay productive.

I do this when it comes to my own work for marketing my business as well. You’re reading this blog post because I was having a terrible time writing the post I’d started on this week, about using social proof in your marketing. You’ll probably see that one next week, when I’ve had more time to ponder.

Do More Research

Sometimes you can’t figure out what you’re doing because you don’t have all the information you need. Yes, this can even happen when you’re making something you’ve made hundreds of times before.

I used to have this issue when I was building period costumes for Renaissance Festival performers. Sometimes I’d have to stop sewing and go back to look at my original reference material. Or I’d have to look up period methods of construction so I got the look of whatever I was making “right,” even if I was using modern materials.

I do this today when I’m writing. I may sit down with an idea of what I want to write, but once I’m faced with an empty page, I realize I’m missing information I need to get my point across to you. So I spend some time searching the Internet or my own library. That way I do a better job of writing and you get a more useful resource.

Plunge in and Do It Anyway

This may be more effective for those of us who have the opportunity to revise than for people who are manufacturing the same product over and over. But it can still apply.

When I write, I know I’m writing a first draft. So I sit down and put something “on paper.” (Okay, on the screen.) When I’m having a distracted day, this can take a while. And it usually doesn’t turn out the way I wanted it to. But it’s a start.

Even if I end up trashing the whole thing, writing that first draft has gotten the juices flowing. The next time around, I end up with something I can use. And with some careful editing, it becomes a finished product that I can present to my client for review. Or to you as a blog post, like this one.

Ultimately, You’re the One in Charge

One of the lovely things about being your own boss is you get to make the decisions. So if you decide to work late to make up for lost time, you can. By the same token, you’re also the one responsible for getting the work done.

There will be days when your brain just can’t or won’t focus on the project at hand. On those days, be gentle with yourself and coax that brain back to work. Yelling at it (and yourself) rarely helps you stay focused.

Once you get back in that groove, enjoy it and get as much of it done as you can. And hold on to that groove as long as possible. Until the next time your brain gets distracted. Then try the tactics in this blog post again.

How do You Stay Focused?

Do you have certain things you do to get yourself in the work groove? How do you break the distracted cycle? Tell me about it in the comments.

Why You, as a Business Owner, Need to Take a Vacation

July 6, 2016 by Tanya Brody Leave a Comment

This is both an apology for not having a post last week and an advice post.

You see, I spent most of last week running around a hotel in Bloomington, MN with 6,000 of my closest personal friends at a fan-run science fiction/fantasy convention called CONvergence.

I help run the Guests of Honor department at CONvergence. I get to invite really cool people who work in the science fiction and fantasy scene to come talk to our attendees about the amazing projects they’re working on and share fun stories about what they do for a living.

I also spend hundreds of volunteer hours (along with about 300 other people who organize the convention) on making this convention happen every year. Then I spend the convention itself taking care of our Guests of Honor and supervising some of the most awesome people ever, the liaisons who work directly with the Guests of Honor.

Most of my days are spent running errands, tracking down people or things for panels and checking in to make sure everyone has what they need, when they need it.

Yes, this is what I do for fun.

I offer my apologies to all of my friends who I waved at as I went running by, but never got to see this year. It was a crazy, wonderful, fun convention and I had a great time! I hope you did too.

Do I recommend you take a vacation like this? Not unless you’re a workaholic like me. I actually love what I do for the convention and it’s my yearly, guaranteed break from “real life.”

Do I recommend that you take a vacation at least once a year?

Absolutely!

I try to take at least two. CONvergence and one other, usually around the holidays.

You need to get away from your work so you can think clearly when you come back to it. It’s the same reason you need to take weekends to yourself and limit the number of hours you work every day.

If you can’t step away from your work, you can’t step back to see the big picture. You get mired in all of the little day-to-day details. Everything starts to feel overwhelming. You won’t be able to see how you’re progressing because you’ll get caught up in the craziness of running a business.

If you take time away from your business, you’ll be able to come back to it with fresh eyes. You’ll see the things that need to be fixed. You’ll also see ways to improve what you’re doing, or new ideas for products or services.

After finishing CONvergence, I was absolutely exhausted. But when I got back to work on Tuesday morning, I had lots of fresh ideas for my current client project, and for my own business.

Your brain needs a chance to relax every once in a while. (Or at least be distracted by some other problem or activity.)

So I’m giving you permission to take time away from your business to go have fun.

Take the family to the beach. Go on that cross-country road trip you’ve been talking about. Go see the Eiffel Tower. You started your own business so you’d have the freedom to do the things you wanted to.

So go do them. Seriously. Your brain and your business will thank you for it.

Time is Short – Follow Your Dreams

April 22, 2016 by Tanya Brody Leave a Comment

I was going to write something lofty and important about being a full-time freelance copywriter or small business person this week. Something that should have helped others to start or run their own small businesses.

But yesterday morning, a Minnesota Icon died.

Out of the blue.

Just in case you haven’t turned on the news or a radio station or been on the Internet in the last 24 hours, Prince died yesterday around 10:00 am. He was found unresponsive in an elevator at Paisley Park Studios in Chanhassen, MN, less than half an hour from where I live.

We’re all in shock here in Minnesota. When I wrote this, there was a huge block party happening in front of First Avenue, the venue where Prince filmed Purple Rain. More are scheduled for tonight and tomorrow.

Growing up in Minnesota, in the eighties, you couldn’t help but be influenced by Prince’s music. He was the hometown hero. His music was everywhere, school dances, the radio, blasting out of boom boxes and on television. So while Prince wasn’t one of my all-time favorites, I do consider myself a fan.

Prince was a self-taught virtuoso, multi-instrumentalist, composer, singer, songwriter, you name it. He was one of the most talented musicians of our time. Whether you like his music or not, ya gotta give the guy some credit. He really was fantastic.

Everyone comments on how eccentric he was. And he was. By all accounts, he was a fabulous, shy, little powerhouse of a man. He was most comfortable on stage performing. He was very private. But he was very kind and giving.

He supported other musicians in their careers. He gave free concerts. He held parties and concerts at Paisley Park. He’d show up at other musicians’ concerts and randomly join them on stage, playing some incredible music with them. You can read all the stories elsewhere on the Internet. He was an amazing guy.

He was also a very savvy businessman. He controlled his image very carefully, insisting that videos and pictures that weren’t authorized be taken down. He removed his music from most streaming services in protest of how poorly musicians are paid for their art.

And the crazy love symbol thing? For those who don’t know, that was actually a battle with his record label, Warner Bros. He felt he wasn’t being treated fairly when they tried to slow the release of his CDs. So to get out of his contract he changed his name to what became known as Love Symbol #2.

But this post really isn’t about Prince.

It’s about time.

It’s about the fact that we have no idea when Death will come for us.

So if you have a dream, do it. Follow your dreams now. That way when your time is up, you can say you accomplished the things you wanted to. Even if you failed at them. At least you tried.

I’ve failed numerous times. And each time, I learned something from that failure. And I can say I tried.

I’ve been incredibly lucky in my life. I’ve had the resources to follow my dreams, no matter how crazy they were. My incredibly tolerant and supportive family has helped me through a lot. I owe them big time. But they all understand that dreams are important and you have to follow them.

I have a degree in creative writing and theater. I wanted to be a full-time actor when I graduated from college. (Among my acting credits is being an extra in Sign O’ the Times, so there’s my Prince tie-in. One of the many benefits of growing up in Minneapolis.)

I’ve run my own business making costumes, primarily for people performing at Renaissance Festivals, but also for local theater productions. I’ve toured the country as a professional musician, playing at those Renaissance Festivals and as part of a Celtic band.

I’ve been very lucky to be able to follow my dreams, even if I’ve failed at some of them.

But if you don’t try, you’ll never know if you’ll succeed or fail.

Which is why I’m doing what I’m doing right now. Until I try being a full-time freelance copywriter, I’ll never know if I can do it.

So I’m encouraging you follow your dreams too. You don’t have to take the crazy leap of faith like I did. You can work your way into it.

Or maybe you have a dream that doesn’t involve upending your life. Maybe you want to travel because you’ve never left your home state, province or country. Maybe you want to learn to paint, just because. Maybe you want to become a sommelier, so you can say you did it.

Go do it. Even if you fail, trying can be considered a success.

Prince did it. He lived a spectacular life. I’m sure in amongst all his successes, he had some amazing failures too. It wouldn’t be life without them.

Follow your dreams. No matter how big, or small they may be.

Because we all get the same thing, we get a life. How we use it is what defines us.

Tell me about your dreams and how you plan to make them happen in the comments below.