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You’ve started a new business, and you’re thrilled that you get to work from home. In fact, just yesterday you stayed in your flannel pajamas all day as you worked. Yes, you’re excited about starting this new business venture, and things are already going well. You’re even making a bit of a profit. There’s just one little thing that’s been worrying you. Okay, it’s really a huge thing–your business finances!
In fact, if you’re being totally honest with yourself you could say that you’re more than a little scared. After all, running a business involves spending money–not just earning it! It involves paying taxes, tracking invoices and a million other financial details. So what‘s a new business owner to do when she’s worried about all the financial issues that arise? Read on for some tips on how to be smart about managing your money when you own your own business.
Do yourself a huge favor and stay on top of your bookkeeping. If you neglect this part of your business, it can quickly snowball into an overwhelming task. Instead, divide the bookkeeping into small chunks to make it more manageable. If you consistently keep track of invoices and your expenses, you’ll be less likely to put everything off to the last minute. And three months won’t go by before you realize you have outstanding invoices that need to be paid!
Consider purchasing finance software that will help you keep track of those invoices, earned income and other financial matters. Whatever you do, don’t keep receipts in an old shoe box! And carve out about 15 minutes each week to work on bookkeeping tasks.Doing a little at a time will prevent everything from snowballing out of control.
Keep separate bank accounts for business and personal expenses. Don’t use your company’s credit card to buy groceries, your kid’s school supplies or that new dress that was marked down last week at your favorite clothing boutique. Maintaining your accounts separate helps you easily keep track of deductible expenses when it’s time to pay your yearly taxes.
Consider hiring a CPA, also known as a certified public accountant, to do your annual taxes and provide you with valuable tax advice. If you decide to do your own business’ taxes, at least consult an accountant that can give you some initial advice before you tackle the job.
Protect your personal money by incorporating your business or creating an LLC. This can protect your personal income from some of the financial risks that are inherent in any new business venture.
Starting a small business involves risk and countless worries. But one thing you don’t need to worry about is moving your business from your home to a rented office. Many small businesses can successfully run from a home. Renting an office space may be an unnecessary expense, so don’t be in a hurry to get one if it’s possible to continue working from your home.
Market your business in an effective but inexpensive manner. You don’t need to hire a huge advertising agency to promote your business. Engage in networking, increase your social media presence, create marketing materials in-house and grow a customer email list. These relatively inexpensive marketing strategies can boost your business without breaking your bank account.
Starting a new business is an exciting and often frightening experience–especially when it comes to financial data. Be smart about business matters by regularly tending to bookkeeping tasks, consulting a tax professional for tax advice and avoiding unnecessary expenses for your new business. By following these tips, you can stay on top of financial matters without getting too overwhelmed.
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