If you are afraid of filing your tax return, check just three numbers every month instead of doing it all at once for the year

“I’m afraid of filing my tax return.”
I think many freelancers feel this way.

But rather than the tax filing process itself being scary, I think some people are“afraid of looking at a whole year’s worth of numbers all at once.”I am the type who is afraid of looking at the results all at once, too.So, I understand that feeling well.

I am the type who is afraid of looking at the results all at once, too.
So, I understand that feeling well.

For such worrywarts,
waiting until February or March

to check a whole year’s worth of data, such as
“How much was this year’s revenue?”
“How much were the expenses?”
“How much will the taxes be?”
is truly overwhelming.

“Things didn’t go well at all this year...”
“I can’t pay this much in taxes!”
“I should have spent a little more on expenses.”

Even if you realize this after a year has passed,
there is nothing you can do about it.

That is why I recommendlooking at just a tiny bit of numbers every month.
That said, there is no need to perform detailed analysis.

The 3 numbers I want you to check every month

The numbers I want you to check every month are,
at a minimum,

① Revenue
② Expenses
③ Profit

Let’s check these three.

For example,

Revenue: 500,000 yen
Expenses: 150,000 yen
Profit: 350,000 yen

Something like that.

If you know that “I made about 350,000 yen in profit this month,”
that is enough.

Let’s also check the money in your account

And one more thing you should check isthe money in your account.

Even if you have a profit of 350,000 yen, you cannot use all of that 350,000 yen for living expenses.

Set aside money for taxes and social insurance, and check how much you have left to spend.

How much was the profit?
How much is left in the account?

By looking at these two things every month, it becomes easier to get a sense of your finances.

Check the status of your work with numbers every month

The reason for looking at the numbers is to know how your business is doing right now.

There is no need to balance everything down to the last yen every month
or create a perfect set of books.

It is fine if some entries slip into the following month; don't worry about it.

The important thing is
to avoid going until December without looking at the numbers even once
that is all.

If you look at the numbers even a little bit every month,
when tax return season arrives,

you won't have to feel nervous, wondering things like
“Did I actually make a profit this year?”
or “How much will my taxes be?”

Before the end of the year,
you will also be able to make decisions like
“It looks like I’ll have a profit this year, so maybe I should buy a new computer early.”

Tax returns do not
suddenly begin in February or March of next year.

A tax return is the process of summarizing the results of your year's work at the end.
And accounting can be done month by month.

The more afraid you are of tax returns,
the more you should look at the numbers a little bit every month instead of trying hard during tax return season.

Even just doing this makes a big difference.

Try setting aside a little time for accounting on a fixed day each month to look at your business numbers and ask yourself, “How did this month go?”

A tax return is not just a task for submission to the tax office.

It is also an opportunity to know what kind of work you did each month and how much profit you kept.

Numbers that are scary when left unknown gradually become understandable as you look at them a little bit each month, and you will come to understand your own work better.

Thank you for reading this far.

🖋️🖋️🖋️

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