Business Basics & Tax Planning Small business owner · Self employed professionals have 3...

Business Basics & Tax Planning Answers for the

Small business owner

Self employed professionals have 3 common struggles:

Managing their tax liability effectively Planning for retirement

Getting loans and financing

*This workshop is intended to provide basic information to address each area

Do you want to be in business or do you want to have a company?

• Business – is the activity of making one’s living or earning money by producing or buying and selling products (goods and/or services).

• Company – a legal entity made up of an association of people, be they natural, legal, or a mixture of both for the purpose of carrying on a commercial or industrial enterprise.

Seek Professional Guidance

Score Mentors SBA

Small Business Development Centers Shopkeep Small Business 101

Business USA Entrepreneur.com

Trusted Experienced Business Owner

Guidance Should Help You:

• Identify where you are • Clarify where you are going

• Understand what’s needed to help you get where you are going • Simplify the process of getting there

John Doe

is not

“aka”

JD Enterprises

Establishing the businesses identity

• Create a distinguishable business name & logo

• Create business letterhead

• Establish a company website & email address

• Business name on business cards

• Establish a business address office away from home

• If appropriate wear clothes with the company name & logo

• Establish a separate social media identity for the company

• Business bank account, credit cards, debit cards, etc.

• Have a separate business phone number

• Use public listings sources e.g. yellow book, white pages, etc…

• Time is not money, but time spent needlessly because of inefficient processes and poor management strategies can be and often is very costly!

The importance of being organized

Operate as a company

• Maintain income statements & balance sheets

• Always use contracts and agreements when applicable

• Establish a designated voicemail for the company

• Use the company mailing address for business

• Define & list the company’s business hours

• Use stationary with the company’s name & logo

Establish a system of paying, receiving, & recording compensation

Use expense sheets to record, track, & manage expenses

Income Statements & Balance Sheets

Tax Strategies for Self-Employed Professionals

Tax Cuts & Jobs Act impact on

business owners

• Changes in the corporate tax rates

• 20% Deduction for pass through entities

• 100% depreciation option

• Reduced individual rates

• Bigger vehicle tax breaks

• No more client entertainment deduction

What can I do to lower my

tax rate

Income Shifting

This is not a vacation….

I’m working in the field…

Reclassifying expenses

Tax planning strategies

Continued…

• Using dividends

• Company contributions

• Qualified savings plan

The advantage of dividends

Retirement…. It’s all on you!!!

This doesn’t have to be your Your Retirement Plan?

As “old” Joe Friday would say….!

Retirement Savings

Individual 401(k) vs SEP

Individual 401(k) vs SEP