It’s not often during tax season that I feel like I get a chance to breathe, but I have had that chance over the past week. The political landscape has calmed (granted, only partially and only in some areas) and the lack of a shutdown threat has let the tax season progress in a more regular fashion. This means I have got to see some of my business tax clients, and it is always heartening to see people who have grabbed their own dreams and are pursuing them toward their own ends.
Throughout the year, I hear from people who are looking to jump into this world of starting their own business. This isn’t (only) to toot my own horn, but I find that those I speak to before they fully begin the endeavor fare better than those who are already mired in the world (and often looking for a rope to help pull them out). This is mostly because those who are the most successful are the ones who are the most prepared for what they are taking on.
You should start any business with passion, fervor, and vigor, but those are not enough to guarantee success. The Small Business Administration, though, has provided some more keys and recently put out a 10-step guide to starting a business. If this is something you are interested in, please take a look, for it gives a nice overview of things you might not know you should think about. And for those you are really interested, it allows you to drill down into the topics and learn more about them.
This list features big ideas (what will be your type of business structure?), fun ideas (what will be your business name?) and the mundane stuff you have to do (get federal and state tax IDs). It’s a great primer.
Please allow me to take a little extra time here to highlight the final entry of getting a business bank account. For it is tax time, and those businesses that operate in a way that involves having to determine between personal and business transactions in the same account, well, they’re not having fun right now. A separate account is a simple action that can save so many headaches.
I also want to add another entry to the ideas, though. I understand that it’s usually not one of the first considerations when beginning a new venture, but also make sure you do a little bit of research when hiring your first employee. It’s not that difficult to start off paying a couple contractors to help you start, and it doesn’t need to be that difficult to bring on an employee once you grow, but it’s something you want to do in the right way to make sure you aren’t setting yourself up for any potential penalties.
Please use this information to brainstorm and look into things a little deeper if you have been thinking about starting your own business. Just know that you are bound to develop more questions, and when you do, we remain here to help you move further down the path.
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To ensure we don't make the folks at the IRS ornery, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.