- A “Quarterlife Crisis” got Amy Northard out of the cubicle and into the niche of working with creatives.
- When a third party is taking out payroll taxes and paying them for your small business you can expense it as a payroll expense.
- Think of liability as a credit card – you still owe the money.
- You should have a separate bank account for your business because it is critical for bookkeeping.
- You can work with your bank for a business account where you have your personal checking.
- CPA Mobility allows you to practice in a state who’s practices line up with the state where you are doing business.
- There are challenges around state taxes as they change from state to state.
- International business have their challenges as they have many different rules.
- Quarterly taxes are usually estimated on the previous year which can lead to an over or under payment. It is conservative to add 30% of your business profit to cover your taxes.
- If you owe more than $1000 on your tax return the IRS will penalize you for an under payment.
- Different states charge differently for sales on tax for services. If you are unsure, check with your state.
- Shared services (like Internet service for your business or home office space) are deducted on a home office spread sheet.
- Having a home office is no longer a red flag for the IRS.
- Auto generated notices from the IRS are often sent when payment is missed. Do NOT panic. Review all records before paying what is sent.
Small Business Suggestions
- When you are accepting payments from people, you really should consider becoming an LLC to separate you business from personal taxes.
- Small Businesses usually schedule a consulting fee with Amy Northard, CPA and can then sign up for a monthly plan.
- Liability Insurance can be purchased for most small businesses. This can protect you from an angry and/or dissatisfied client who threatens to sue.
- An S Corp is more advantageous than a C Corp which pays taxes on the profits that are made. A C Corp pays taxes twice.
- You have to take a reasonable salary when you are registered as an S Corp and making a profit.
- Try to find somebody to work with that is a little ahead of you in your genre of work.
- Hire a team that can be trusted and continue to grow.
Tools for Accounting
Important Links from this Episode