Business Start-Up

Being Your Own Boss – The Buck Stops With You!

If you are among the many who have recently transitioned from the ranks of the employed to self-employment — a business owner or an independent contractor — accounting for the income and expenses of every aspect of your enterprise and meeting all related tax liabilities is your responsibility and is as important as the product and/or service you provide.

Tax liabilities for entrepreneurs and the self-employed are a year-round concern. They are not simply for personal income, but include periodic payments of employee-related and self-employment taxes and mandates — Social Security and Medicare, Workers Compensation insurance, etc. The days of the one-step W2 are no longer… welcome to the rigors of bookkeeping, quarterly estimated income taxes, state sales taxes, business registration, licenses and fees, identification numbers, etc.

Bookkeeping is the foundation of being on your own. By properly and consistently recording all your fiscal activity you can assess and reassess your progress, successes, failures, needs, desires and plans. The accountability required by the various and often numerous agencies you have to deal with can become quickly routine with a proper set of books always at your disposal.

Starting and maintaining a successful business includes planning, legal actions and financial decisions, as well as keeping your focus on the thing you love that is the core of your business.

At year-end tax time, as an employee you might have needed the assistance of a tax professional — tax preparer or accountant. As a business person on your own additionally you’ll need year-round bookkeeping and legal assistance to help deal with the complexities of meeting all the requirements you face.

Starting a business begins with a business plan. Get help, both free and/or hired, to assist in planning, obtaining financing and for locating your business. Select a customer-friendly location, comply with zoning laws and don’t forget promotion and publicity to get the attention you need to build your market.

Find government backed loans, venture capital and research grants to help you get started. Check out your startup amortization options.

Decide on your business’s legal structure: sole proprietorship, partnership, Limited Liability Company (LLC), corporation, S-corporation, nonprofit or cooperative. Register your business name as a DBA — Doing Business As — with your county and also with your state governments. Get a list of federal, state and local licenses and permits required for your business. Find out what legal steps you will have to take to hire employees.

Obtain a tax identification number (TIN) or employers identification number (EIN). Don’t use your Social Security Number (SSN) to protect yourself as an individual from identity theft. The IRS and your state revenue agency will advise you on which identification number best suits your business.

The tax problems most prevalent among new entrepreneurs and self-employed center on forgetting that the administration of your business is as important as the retail outlet, service and/or product that is the driving passion of the desire to be on your own. Sustained success comes from establishing and maintaining a foundation upon which to build a business that consistently generates income, pays its bills and keep it indebtedness under control.

TaxPlus
For further information, contact:
Tony Navarro at 310-398-3231