It’s the end of the World as we know it.

I mean Year. It’s the end of the Year!

This year has definitely been a productive one. I hope that everyone had the opportunity to start at least one project (hopefully more!). While everyone gives their end of the year best or worst list, recaps their progress on goals, or tells you to have a good New Years… I instead will tell you this…

Get a good CPA. If you made decent money this year and have an LLC or Inc I hope you have your duckies in a row.  My CPA set me up this year to pay myself minimum wage while giving myself bonuses throughout the year.  This cuts taxes WAY down.  Now I am not a CPA and so I say don’t take my advice until you speak with your CPA about this.

Here is the little trick.  (This is for Texas, you’ll have to check your local tax laws on this.) The IRS needs to see your business grow.  They also need to see that you are paying yourself.  So you pay yourself the least amount possible.  Either minimum wage or a small salary.  While the Government takes out their federal, state, and selfemployment taxes on that money, they cannot take the self employment tax out on bonuses.  Now… I don’t know how this works but my CPA said that I can be saving 50% of my taxes by doing this.

Don’t forget to write off your home, car, phone, electric bill, water bill, Internet bill, any time you go out to eat and mention work… The list goes on.  As an LLC I have some 300 write-offs I can use.  The key is to get as many write-offs as possible, while not going broke doing it.  Just be practical and again… Talk with your CPA.

Now, I don’t know how this completely works.  Again my CPA took care of this for me.  Most people don’t want to form their buisness as an LLC because of the taxes.  What isn’t well know is the fact that you can file to change your tax status as an LLC to file taxes as an S-Corp.  This will lower your taxes considerably from the beginning.  You do have an election period so if you are an LLC and filing as an LLC then let your CPA know that you want to file as an S-Corp for next year.  The form you need is F8832 and can be found on the IRS website.  Again… Talk with your CPA to see if this really is the best option.

Here are 4 little tips for the coming year.

1. Keeps records of money in and money out.  I’m buying Quick Books for Mac.  Tracking all of your income and expenses is very important so that you can see where you are wasting money and where you can allocate more money to.
2. IRS.gov is the best resource besides your CPA for tax information.  If you have a business or want to form one soon take some time to learn the IRS website.
3. Remember the essential write-offs.  Home, car, phone, bills, etc, etc. can all be used as a write-off.  This saves on purchasing actual office space and in the end it just helps your taxes.
4. Separate your Business funds from your personal funds.  I have two bank accounts.  One business checking account and one joint checking account. If your starting out you don’t need a business account.  Just have two regular checking accounts to separate your funds.  This helps track what your doing and when you do convert to an actual business entity you’ll be ahead of the game.

The most important thing is to remember to have fun.  Don’t take life so seriously.  And go out and push out those ads.

Lets start 2009 off right! Have a good New Years.  It’s my anniversary on the 31st so I’ll see you all next year!

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