There’s no debate: self-employed business owners don’t wake up one day, read a playbook, and are ready to go. It’s nearly impossible to navigate the world of income and expenses, tax structures, and filing deadlines… all while keeping a business running. To help shortcut some of the basics, here are Formations' 5 Things Self-Employed Professionals Should Do.
1. Clean your books:
make sure your books are up to date, your accounts are reconciled, and all of your incomes and expenses are recorded properly. It’s easier to do it on the go, and not dig in your notes when the tax deadline is approaching.
2. Pay your taxes as you go:
You do not want to wait until the tax deadline and find out you owe the IRS a lot of money. Why are you stuck with an unknown tax bill every April? You also don’t want to pay fines for filing late! Pay your taxes at least once a quarter and get rid of the burden.
3. Define your need vs want:
Don’t over-expense. Make sure you have enough money to keep the lights on! Before you decide to spend, evaluate if you really need it, or if you just feel like buying it.
4. Incorporate:
If you are still a sole prop, incorporate to LLC! Enjoy the legal protection and the credibility the incorporation gives you. It’s time to treat yourself and your business, seriously!
5. File the S-election:
Start enjoying life as an S-Corp. Enjoy the great tax savings, the fortune 500 benefits, and more when filing S-election.
Do you want to learn how to run your business like a pro? We are here to help!
