Self employed

• See this article in action! https://turbotax.intuit.com/tax-tips/self-employment-taxes/beginners-tax-guide-for-the-self-employed...
• Reconcile your bank accounts.  This is to ensure that your QuickBooks balance of "what is in the bank" will match to what the bank has in your account at year-end.  Reconcile all your accounts: checking, savings, petty cash, credit cards, PayPal/Square, and loans. Ideally, reconciling should happen at the end of every single month, but completing the December reconciliation is the first step for ending the year.  Reconciling each bank account allows you to locate transactions that were entered twice, and entries the bank has that you don’t. By the time you’re done, all your transactions will be present and accounted for!
• Make sure your transactions are categorized properly. Just because your balance matches the bank, it doesn’t mean all the transactions were put in the right places.  Run a Profit and Loss report for Last Year. Click on each of the Income, Expense, and Cost of Goods amounts. Scan the list. Is each transaction supposed to be where it is? If not, click on the entry to open it, and change the category to the correct one.  Carefully review the transactions for any personal expenses (that really do not belong in the P&L for the business, and also the Meals & Entertainment expenses.  You will also want to take a look at your automobile expenses & business mileage log - if you have business-related expenses for any driving you had to do during the 2021 tax year.  Remember - commuting miles do not count - but any business miles you drove during the tax year, once you have commuted (and reached) to the workspace - are possible deductions at the standard federal mileage rate (SFMR) - which is $0.56 per mile for the 2021 tax year!!!
• Take inventory. If you sell products, this is a perfect time to adjust your inventory. QuickBooks has inventory reports you can print out to see what you’re supposed to have in stock. Take a physical count and compare the quantities. You may have to consider making an inventory adjustment - in either quantity or valuation, based on your comparison in QuickBooks Live! to your physical count.
• Depreciate your assets. If you have large purchases in your fixed assets, you want to spread out the cost of the items over a few years so that your books don’t have big expense hits one year and nothing the next.  Depreciation also adjusts for value reductions to the asset itself – a perfect example is your computer . . . which is worth less now than it was five years ago when you may have purchased it.
• Analyze your business. QuickBooks Live! has somewhere between 20 and 100 reports available to you, and you can customize reports to really get a great understanding of your business.
• Close the books.  After your taxes have been submitted, use the "Close the Books" feature on QuickBooks Live!  Closing the books ensures that your file matches your tax return submission to the IRS.  More importantly, closing your books - prevents anyone from changing historical data without you being aware and in knowing what they are doing.
• Make a backup.  Even if you have a solid backup strategy, you should consider making a specific backup of your QuickBooks Live! 2021 data file - as a year-end final copy.   You can even label it, noting the fiscal year, and put the backup file in a "special" folder on your device.  You can even be a little "old-school" and consider burning a copy to a CD, and put the CD backup of your QuickBooks Live! data file in safe deposit box.

State Considerations - Commonwealth of Massachusetts:

In addition to income taxes, you may be required to collect and pay sales and use tax, a state-mandated surcharge that varies from state to state.  Since we did not see the specific business product or service stated in your question - we are unsure if you have a product or service that would be subject to sales tax, within the Commonwealth of Massachusetts.

Business owners should check with their state government to see if they must charge customers sales tax for their products or services.

In reviewing our resources on Sales & Use Tax, and the materials of the Massachusetts Department of Revenue (DOR),  the Massachusetts sales tax is 6.25% of the sales price or rental charge on tangible personal property, including certain telecommunication services sold or rented in Massachusetts.

Sales tax is generally collected by the seller.

If you should have collected sales taxes from your customers - and did not do that during the 2021 tax year, you could be held personally liable on the sales tax you should have collected but didn’t.

Individuals may also be held responsible for a use tax, which is applied to all the items a person buys for the business (even out-of-state purchases) and should have paid sales tax on but did not pay.

The Massachusetts use tax is 6.25% of the sales price or rental charge on tangible personal property, including property purchased by phone, mail order, and online where sales tax was not collected or was paid at a lower tax rate. Use tax is generally paid directly to Massachusetts by the purchaser.

If you have not already - you may want to consider registering your business with MassTaxConnect — this is the official MA DOR's web-based application for filing and paying taxes.

Through MassTaxConnect - You can also learn how to apply for an State Identification Number for your business, whether or not you need to remit sales and use taxes during the tax year, and also submit your annual certificate of tax filing status, as is required to transact business within the Commonwealth of Massachusetts.

We sincerely hope that the information provided herein is responsive to your question and posting in our Live! Event!!  Should you have any questions or requests to clarify - please do not hesitate to reply to this post; otherwise you can feel free to set up a call back or Chat session with one of our Live! Tax Experts at TurboTax Live!

We wish you all the best in your business venture!!  Cheers!