As a business owner for 13 years, I have experienced first hand neglect that every entrepreneur is likely to encounter. And sometimes, it takes another eye to take a closer look on what has been missing.
Most business owners think that by avoiding tax, they can eventually manage the payment when they think they’re ready for it. Everybody knows that everything now has taxes, that it will eventually get them from behind and yet many entrepreneurs don’t realize that preparing for it is just as vital. My team and I have developed a proactive strategy with our small bookkeeping clients to help with keeping track and stay on top of any taxes you might incur throughout the year. To know more about our strategy, drop me a line at todd@simplebackoffice.com — in the meantime, below are a few quick tricks you can easily start with:
- Set Up a couple of checking and savings account.
- Segregate your deposits, expenses, payroll and payroll taxes through different accounts.
- And most importantly, dedicate a savings account to be used only for taxes.
Ideally, once we have gone over your accounts and determined your net profit, we will then do a quick calculation for state (10%)* and federal (35%)* income tax brackets to transfer from your operating account over to your tax savings account.
*(tax bracket % will vary based on your state and income levels)
And believe me, I have heard everything from “You know what we need Todd, a lot more cash” to “Whoa Todd, that’s a TON!”. It may be a lot from a different perspective when you haven’t really prepared for it, however I would rather be conservative and you have the money set aside from your operating account and not use the same cash for the business that is meant for tax.
Do not hesitate to reach out to me and my team even for the slightest questions. Follow our social media pages for constant updates and subscribe to your weekly newsletter for bookkeeping tips.
TODD LAY
Chief Experience Officer
SimpleBackOffice
“Know Your Numbers, Know Your Business”
916-520-8560