TAX TIPS FOR THE SOLOPRENEUR

Tax tips for the solopreneur. As a solopreneur, you wear many hats: sometimes you are the manager, the human resource officer, the customer service representative, the accountant, the tax strategist and more. The number of hats you wear depends on the type of business you have, how many contractors/freelancers you work with and the needs of your clients/customers. So how can you find balance as a business owner who is also switching hats ? Systems. To systemize your business practices you don’t have to reinvent the wheel. Simply replicate the systems that work best and make your solutions simple. If you can put your systems into three to five steps, not only will you save time and energy, you may save yourself some money too. If you are a solopreneur looking for a simple solution for your business and taxes and write offs, these simple tips can help. So put on your tax strategist hat for a while. Tax tips for the solopreneur.

First and foremost, as a business owner, you must make sure you have a separate bank account for your business. By creating a business checking account and/or credit card, you will have a separate place to charge business expenses (and a place to track business income). You may be wondering, “Why is separating my business and personal accounts so important ? In layman’s terms, the IRS prefers it that way as it is easier to make sense of your bookkeeping if all business charges are on the business cards. Now this step may seem obvious, but you would be surprised at how many business owners are commingling their personal and business expenses. The law says, businesses must have separate and accurate records, which is why business owners who commingle accounts can run into difficulties when they receive an IRS tax audit. Now, in case of an audit, following tip No. 2 will smooth the process and help you receive all the write off’s you deserve.