Tax season is always an interesting time of year. If you are expecting a return, you may be excited and eager to file your taxes right away. If you suspect you owe, you will likely wait until the last minute to file in hopes of prolonging the payment.
When you own your own business, all things tax related you thought you knew fly right out the window. I remember when I first became self-employed. I was so excited for all the “tax write offs.” I was excited that I owed no taxes because I had written off practically everything. I didn’t cheat my taxes. Everything I wrote off was legit. But because I had no strategy and no earthly idea what I was doing or what I needed to be doing, I had written in my income so low, no bank recognized the revenue my business had made. No bank would give me a business or a personal loan or a line of credit because on paper, my business looked like it was deep in the red.
At some point, when you are looking to build wealth, you must show that you can both earn and retain it. You may need to consider the tax implications of hiring your first employee, or purchasing a large piece of equipment. Your investments have an effect on your taxes. The way you earn the revenue in your business affects your taxes…Hey, I don’t know about you, but I spend enough time keeping up with running my business than to attempt to keep up with ever changing tax laws. Knowing how to get the desired results not only this year, but have a plan for subsequent years when it comes to your taxes is invaluable. Here is the best advice I can give you. Hire an accountant.
Yes. This will cost you. But what I have learned and what I advocate to all my clients is to let an expert be an expert. If you are not a tax expert, stay in your lane! And remember, there are many benefits to having an expert work with you to build your tax strategy…you did know you needed a tax strategy right?
JMJ