After 12.5 years in the business, I have found that a self-employed person’s two biggest fears seem to be wasting time and losing money. This takes form in many different ways, whether it be a father missing a kid’s softball game or a stiff penalty for missing a payroll tax payment. One way or another a self-employed person is continually being robbed of their precious time and money. Over the past twelve years we have developed a 3 step procedure that will allow the self-employed person to maintain control of their hard-earned time and money.
The first step is to simplify your accounting. One of the biggest time drains on a business owner is the data entry of your books. This necessary evil must be done for a variety of reasons but the big one people worry about is getting the books ready for the tax man. The problem with scrambling to get the books ready to go for the tax man in March every year is that you have no compass for where you are going. You can’t run projections or historical reports to guide your decision making processes. We take an in depth look at how your business operates, what accounting needs you may have and then we implement a system in order to get the accounting done as efficiently as possible. This could include outsourcing your accounting, implementing a new software, or simply providing more adequate training. This in turn saves time for the business owner and allows them to focus on the next sale or the next engagement, thus making them more money.
The next step is to streamline your payroll. Another big time strain and stress for a business is their payroll. It is 2018, and some people still calculate their employee’s payroll by hand. There is nothing wrong with this, but there are so many better options for your payroll. By implementing a software solution for your payroll, it can become as easy as entering the hours and the software can take care of the rest via a few button clicks, even direct depositing the wages in your employee accounts and automatically emailing them a pay stub. The secondary benefit to streamlining your payroll is the software typically tracks your payroll taxes and gives you ample notice of when taxes are due, thus eliminating the costly penalty for missing a payment or even scheduling it a day late.
Strategic Tax Plan
The third step is to implement a strategic tax plan. While the first two steps save you time allowing you to focus more on your ability to make more money, this step focuses on the ability to save money. When looking at implementing a tax plan, we take into account your tax brackets, your business history, your personal needs, and your retirement savings. We look to minimize your tax liability over the course of your life. There are always things a business owner can do to save taxes this year, but those large expenses may come back to bite them down the road. We look at the foreseeable future to determine whether it makes sense to defer money via retirement savings in a 12% tax bracket when you anticipate being in a 22% bracket upon retirement. Once you get closer to retirement, we look at your future social security/pension incomes along with your retirement savings and come up with a plan to minimize your tax rates over the retirement years in order to protect your savings and cash flow while on a fixed income.
As a self-employed business owner, you didn’t build or buy your business to run ragged the whole time and miss your life. You did it because you wanted the freedom of building your own future. We here at Chad Harrison CPA P.C. desire to help you live your dream by evaluating your needs and laying out the above steps. If you currently have a business and would like a free consultation, please click the link below.