Taxes are Done for Years to Come!
I did something great! I automated my corporate tax forms for the foreseeable future. The story of how I was able to do this started 7 years ago. At the time, I made a profound decision that has changed my life ineffably: I decided to keep track of every dollar.
I know there’s software that does this and I tried Mint for a while, but it was never comprehensive. You had to manually add cash transactions, and it would often miscategorize. And it was always trying to sell me shit I didn’t want, and distracting me from what I was there to do.
Since most of the transactions were entered passively, I wasn’t able to keep a good eye on my money, even with the app. Keeping track of money was something I could do actively with a simple spreadsheet. And so I began.
I built a daily habit of entering all of my financial transactions for that day into the spreadsheet. Over time, the spreadsheet morphed from a personal weekly budget to a corporate yearly budget. But the data entry was always daily.
Now this might seem tedious to some, but it only takes a few minutes a day, and the advantages to me are enormous. The first is that keeping an eye on my money was no longer a passive activity. It came to the front of my mind.
Writing down every transaction has a singular way of focusing your mind on how and when you are spending your money.
At first my spending habits didn’t change even though my jaw regularly dropped. But over time my spending habits drastically changed. My net worth went from negative $30k to to an all time high of positive $40k. I attribute this change solely to the daily habit of entering the transactions into the spreadsheet, and thus having to deal with each transaction viscerally.
Then I brought this habit from my personal life directly into my business. Thus, the other major advantage of building this habit is the part I just completed, which is incorporating the tax form directly into my spreadsheet, so that now the data is automated.
I basically reverse engineered the tax categories that are relevant to my business into my spreadsheet. Now I have this bad boy:
The categories across the top are the exact categories the tax form asks for, with the exception of a few that are not relevant to my business. If you scroll down to line 258 you will see the actual form 1120s (for S-Corporations) categories. This spreadsheet will also work with form 1065 (for LLCs) since the two forms are nearly identical.
What this means is that as long as I continue my daily habit of entering business transactions into this sheet, my business taxes will be passively done.
Hooray!
This story is part of a series documenting the journey of a Dallas startup called Feather Laundry. For your reference here is the Table of Contents for the series.
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