quick links:

welcome to my

blog

Weddings

Portraits

Engagements

For Photographers, Other

February 13, 2018

The App That Changed the Way I Save for Taxes

I think that one thing most creative entrepreneurs will agree on is that dealing with finances & taxes is probably the least fun part of running a small business. For me personally, I love photography and I love client relations, but when it comes to the knitty-gritty of the numbers, my brain just automatically starts to swirl. Who else feels like this when it comes to business finances???

Ever since I started my business five years ago, tax time has always given me anxiety. Once I entered the phase of my business where I started paying quarterly taxes, “tax time” wasn’t only confined to one part of the year anymore. Even worse, I would beat myself up over feeling unorganized & so stressed out about it, feeling like I was the only one who couldn’t get it together! So let’s have an open chat about money, taxes, and an app that makes my life a whole lot easier…

One area where I struggled most was with putting money aside for taxes. As a small business owner, I handle 100% of the income I bring in… but that doesn’t mean I get to keep it all. Unlike getting a paycheck from a business where taxes are automatically deducted, I’m responsible for putting a portion of incoming money away for taxes. My issue was that I felt like when I looked at my bank account, I never really had a strong concept of how much of that money was actually mine to spend and how much should I have set aside for taxes. I had a business checking & business savings account, but to be honest– I was not great about diligently transferring money into that savings account to save for taxes. Enter: the Qapital app. Exit: the days of confusion & anxiety over saving for taxes.

I can’t remember where I first learned about Qapital, but it has been a #gamechanger. It’s an app that automatically withdraws money from your account and puts it into an external savings account. Now I know your first question is…. how much does it cost? … Nothing, it’s FREE! No fees to set up or transfer funds. There are lots of different ways you can set up and use Qapital for both personal and business savings, but for the sake of this post I’m just going to stick to how I use it to save for taxes specifically.

Qapital allows you to set up “Rules” for savings, which basically functions under a “if this, then that” premise. The rule that CHANGED. MY. BUSINESS. (and lowered my stress) is the Freelancer Rule. This means that if a deposit comes into my business checking account, 30% is automatically deducted and put into my Qapital account. That means that I can automatically save for taxes, and that money is out of sight, out of mind. With the use of Qapital, I know that all of my money in my business checking account is mine to use freely, because I know the money I’ll need come tax time is stored in my Qapital account. In reverse, it means that any money I have in my Qapital account is not to be used for anything besides taxes (it has eliminated the temptation for me to “borrow” from my savings account… I know we’ve all done that!). So when it comes time to pay my taxes, I simply transfer that money to my bank account and make the IRS payment.

I recently read the book “Automatic Millionaire” and it suddenly made so much sense why this app really changed the way I save for taxes. Until we automate our savings, we will continue to struggle to save (unless you are a rare breed who is VERY diligent about managing your money every time a deposit is made… however, I am not.) Once that money is in our hands, it is oh so easy to spend (amiright?!). So take it out of your hands, out of your sight, and store it in a Qapital account. Before you know it, you’ll have enough to pay for taxes without the stress of saving! If you follow the freelance rule and save 30%, depending on your tax bracket, you may even have some leftover! If that’s the case, how amazing is it to have some bonus cash to put into a retirement account or buy yourself some new equipment?! An accountant or financial adviser would probably recommend the first… But I’m not here to tell you how to spend your money, just how to save it.

Make 2018 the year you stop stressing about saving for taxes. Let Qapital do the work for you… If you use THIS link, you’ll have $5 waiting for you to start you off when you open your account. Happy savings!