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Business Basics & Tax Planning Answers for the Small business owner

Business Basics & Tax Planning Small business owner · Self employed professionals have 3 common struggles: Managing their tax liability effectively Planning for retirement Getting

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Page 1: Business Basics & Tax Planning Small business owner · Self employed professionals have 3 common struggles: Managing their tax liability effectively Planning for retirement Getting

Business Basics & Tax Planning Answers for the

Small business owner

Page 2: Business Basics & Tax Planning Small business owner · Self employed professionals have 3 common struggles: Managing their tax liability effectively Planning for retirement Getting

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

Page 3: Business Basics & Tax Planning Small business owner · Self employed professionals have 3 common struggles: Managing their tax liability effectively Planning for retirement Getting
Page 4: Business Basics & Tax Planning Small business owner · Self employed professionals have 3 common struggles: Managing their tax liability effectively Planning for retirement Getting

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.

Page 5: Business Basics & Tax Planning Small business owner · Self employed professionals have 3 common struggles: Managing their tax liability effectively Planning for retirement Getting
Page 6: Business Basics & Tax Planning Small business owner · Self employed professionals have 3 common struggles: Managing their tax liability effectively Planning for retirement Getting
Page 7: Business Basics & Tax Planning Small business owner · Self employed professionals have 3 common struggles: Managing their tax liability effectively Planning for retirement Getting
Page 8: Business Basics & Tax Planning Small business owner · Self employed professionals have 3 common struggles: Managing their tax liability effectively Planning for retirement Getting

Seek Professional Guidance

Score Mentors SBA

Small Business Development Centers Shopkeep Small Business 101

Business USA Entrepreneur.com

Trusted Experienced Business Owner

Page 9: Business Basics & Tax Planning Small business owner · Self employed professionals have 3 common struggles: Managing their tax liability effectively Planning for retirement Getting

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

Page 10: Business Basics & Tax Planning Small business owner · Self employed professionals have 3 common struggles: Managing their tax liability effectively Planning for retirement Getting

John Doe

is not

“aka”

JD Enterprises

Page 11: Business Basics & Tax Planning Small business owner · Self employed professionals have 3 common struggles: Managing their tax liability effectively Planning for retirement Getting

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…

Page 12: Business Basics & Tax Planning Small business owner · Self employed professionals have 3 common struggles: Managing their tax liability effectively Planning for retirement Getting
Page 13: Business Basics & Tax Planning Small business owner · Self employed professionals have 3 common struggles: Managing their tax liability effectively Planning for retirement Getting

• 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

Page 14: Business Basics & Tax Planning Small business owner · Self employed professionals have 3 common struggles: Managing their tax liability effectively Planning for retirement Getting

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

Page 15: Business Basics & Tax Planning Small business owner · Self employed professionals have 3 common struggles: Managing their tax liability effectively Planning for retirement Getting

Establish a system of paying, receiving, & recording compensation

Page 16: Business Basics & Tax Planning Small business owner · Self employed professionals have 3 common struggles: Managing their tax liability effectively Planning for retirement Getting

Use expense sheets to record, track, & manage expenses

Page 17: Business Basics & Tax Planning Small business owner · Self employed professionals have 3 common struggles: Managing their tax liability effectively Planning for retirement Getting

Income Statements & Balance Sheets

Page 18: Business Basics & Tax Planning Small business owner · Self employed professionals have 3 common struggles: Managing their tax liability effectively Planning for retirement Getting
Page 19: Business Basics & Tax Planning Small business owner · Self employed professionals have 3 common struggles: Managing their tax liability effectively Planning for retirement Getting

Tax Strategies for Self-Employed Professionals

Page 20: Business Basics & Tax Planning Small business owner · Self employed professionals have 3 common struggles: Managing their tax liability effectively Planning for retirement Getting

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

Page 21: Business Basics & Tax Planning Small business owner · Self employed professionals have 3 common struggles: Managing their tax liability effectively Planning for retirement Getting

What can I do to lower my

tax rate

Page 22: Business Basics & Tax Planning Small business owner · Self employed professionals have 3 common struggles: Managing their tax liability effectively Planning for retirement Getting

Income Shifting

Page 23: Business Basics & Tax Planning Small business owner · Self employed professionals have 3 common struggles: Managing their tax liability effectively Planning for retirement Getting

This is not a vacation….

I’m working in the field…

Reclassifying expenses

Page 24: Business Basics & Tax Planning Small business owner · Self employed professionals have 3 common struggles: Managing their tax liability effectively Planning for retirement Getting

Tax planning strategies

Continued…

• Using dividends

• Company contributions

• Qualified savings plan

Page 25: Business Basics & Tax Planning Small business owner · Self employed professionals have 3 common struggles: Managing their tax liability effectively Planning for retirement Getting

The advantage of dividends

Page 26: Business Basics & Tax Planning Small business owner · Self employed professionals have 3 common struggles: Managing their tax liability effectively Planning for retirement Getting

Retirement…. It’s all on you!!!

Page 27: Business Basics & Tax Planning Small business owner · Self employed professionals have 3 common struggles: Managing their tax liability effectively Planning for retirement Getting

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

Page 28: Business Basics & Tax Planning Small business owner · Self employed professionals have 3 common struggles: Managing their tax liability effectively Planning for retirement Getting

As “old” Joe Friday would say….!

Retirement Savings

Page 29: Business Basics & Tax Planning Small business owner · Self employed professionals have 3 common struggles: Managing their tax liability effectively Planning for retirement Getting
Page 30: Business Basics & Tax Planning Small business owner · Self employed professionals have 3 common struggles: Managing their tax liability effectively Planning for retirement Getting

Individual 401(k) vs SEP

Page 31: Business Basics & Tax Planning Small business owner · Self employed professionals have 3 common struggles: Managing their tax liability effectively Planning for retirement Getting

Individual 401(k) vs SEP