Working for oneself is one of the “American Dreams,” but if you don’t follow certain steps, this could become your nightmare. Regardless of why you are breaking out on your own, the most important this is that you have done it. Now, the key is to not make the mistake of not properly filing the proper tax returns, and to make the necessary tax payments.
Inc. / PA / PC / LLC
Going to the Secretary of State website and filing your documents is relatively easy, unless you are a licensed professional, in which case, there may be additional steps. What is typically overlooked is that once you file with the state, and establish your entity, you then have to request an EIN number so that you can file your taxes correctly, and there may be other forms/documents required as well. The steps most often overlooked are board meetings and minutes. If you don’t behave like a corporation, you don’t get the protection of a corporation.
Regularly Scheduled Payroll
If you are the only employee in your small business, how and when you pay yourself is really up to you; however, if you have employees, they will expect to be paid on a regularly scheduled basis. What goes along with paying employees is the handling of their appropriate deductions and withholding amounts, as well as the appropriate employer matches to Social Security and Medicare taxes. Failure to appropriately handle these funds has caused long lasting tax problems for small and large business owners.
Payroll Tax Payment and Reporting
Regardless of how often you pay yourself and/or your employees, the state and federal government demand that reports get filed, along with the appropriate tax payments on a strict schedule. Failure to file these reports and make timely payments can result in severe penalties, which unfortunately revert back to the owner of the business. Learn early on what these amounts are, and when these reports are due, and you will be thankful you did.
Small Business Accounting
Odds are that unless you are an accountant, you did not start your business to spend all of your time bookkeeping. While your primary focus is that of either developing your products and/or services, or marketing them, failure to spend the requisite amount of time taking care of the business accounting and bookkeeping can negate the potential tax savings that can come your way, simply because you own a small business.
Costs and Efficiency
It doesn’t matter if you are an Independent Contractor Physician, Attorney, IT Professional or a Salesman who has decided to break away from “Corporate America” and go it alone, every small business owner knows that you get to keep more money if you can figure out how to do more with less expense. Spend your time doing what makes you money, and let someone else focus on doing the things that don’t make you money, i.e., payroll, tax reporting etc.
Don’t let yourself get caught in the tax trap of missing filing deadlines, and not making payroll tax payments at the appropriate time. Take the steps necessary early when you are still building your business, rather than having to deal with tax liens and legal bills when your business is successful.
My Professional CFO, LLC, is a Business Management firm providing the highest level of service in three key areas of importance to Independent Contractor Physicians, Small Business Owners and Entrepreneurs.
We specialize in Corporation filings and ongoing Compliance, Accounting and Payroll, and Investment Management. Our professionals will assist you in forming the appropriate type of company for your situation and work with you to make sure your company remains compliant. We provide ongoing Accounting and Payroll services to make certain all bills are paid and necessary tax forms and withholding payments are made in a timely manner, as well as the set up and management of your retirement accounts.
We are not simply a document filing service; we are here to help you with the part of the business that you have to do, so you can focus on what you love to do.
Alan Conner, MBA – President of My Professional CFO, LLC has nearly 2 decades of experience working with professionals and small business during both the start-up and ongoing management. He has written countless business plans and has managed assets for both institutions and high net worth clients.
Email us with any questions or call us at: 1-800-517-0CFO (1-800-517-0236)