Help! I’m Starting a Business
Welcome to Questioning Your Cents where you can get your real-world, pragmatic tax & financial advice for business owners, entrepreneurs and independent contractors.
We are your host Kevin Molen and Charles Steinmetz. Our job is to help education you on how to manage your money and save taxes. In this episode, we will discuss tax and financial considerations when starting a business.
Important Points:
Intro
Sole proprietor vs. multi member business differences
Why are you starting a business?
Most business owners are skilled service providers
Are you good at “business” or just the product or service you provide?
How are businesses like dishes?
Why you need to know your financial numbers
Do you have to do everything in your business? No!
Work your strengths and hire out your weaknesses
Do you need an LLC? When should you set on up?
Why do people set up an LLC? 1. My friend told me to 2. To get a tax ID number 3. Legitimacy 4. Liability protection
Does an LLC truly give me legal liability protection?
What are the major types of businesses?
- Schedule C or Sole Proprietor
- Partnership
- S Corp
- Corporation
How are different businesses taxed?
How do self employment taxes work?
What is a pass through entity?
Partnership have more flexibility but there are still self employment taxes
S Corps normally have preferential tax treatment, but more hoops to jump through
What is double taxation for C-Corporations?
When is it worth it to set up an S-Corp?
How do I pay employees?
What is the difference between an independent contractor and an employee?
New 2020 1099 form for independent contractors 1099 NEC
Why you shouldn’t mix personal and business expenses
Why is a good paper trail needed?
Is it better to pay more in taxes or be more profitable?
Comfort Zone:
Can I still deduct charitable contributions?
5 types of itemized deductions: 1. Medical expenses 2. Sales tax 3. Property tax 4. Mortgage interest 5. Charitable donations
Ouro
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