03/31/2004: "Taxes! In need of advice for small art business!"
I had the morning off so I decided to get started on my taxes. In 2003 I actually took the plunge and bought an Alaskan business license and created “Elise Tomlinson – Multimedia Artist” which is a sole proprietorship and a way for me to sale my paintings and services as a graphic artist and web designer (though I’m still waiting to take on the services until I compete my database design course and get better at designing with style sheets).
The problem is that I have no idea how to do taxes for a small business. I started using the online tax software at TurboTax called TurboTax Home and Business which you can do online and you don’t have to pay for it until you go to print off or do an efile.
They right away started asking me things I didn’t understand…what kind of accounting method did I use (cash or accrual) and about my inventory (does that include the value of unsold paintings as well as art materials…paint, canvas, brushes, etc. and how do I estimate that?) or does it only account for things I specifically purchased this year and have receipts for?
I don’t know if I should hire an account to help me set up this first year or just struggle through this and do the best I can. Any advice from artists who also have small businesses (very small) I would appreciate any advice at all.