No Tears Over Taxes
Hating the "Tax Man" is a familiar meme in our culture...
MONEY MINDSET
In reality, the U.S. tax code is very pro-business.
You'll be amazed at the tax deductions that will come your way now that you are a business owner.
You are running an ethical, transparent, and profitable business, so there is nothing to fear or dread about filing your taxes.
1099 MISC FROM NORWEX
Each January, Norwex will send you a special tax form.
It's different from the typical W-2 form that your employer sends you.
Your 1099 MISC form reports the money you earned from...
commissions
leader bonus payments
dollar value of incentives and bonus products
NOTE: Norwex does NOT keep track of the checks and cash that you accept from your customers.
Unlike, a paycheck from a regular job, where your employer automatically deducts federal and state taxes, Norwex does NOT withhold any taxes at all.
Don't panic. Your business income is off-set by all the business tax deductions that you are now eligible for as a business owner.
It is really important to save, and organize, all your receipts and paperwork to properly document these business tax deductions.
rECEIPTS & MILEAGE
Don't wait until April 15th to get your finances organized.
Take charge now.
Open a separate checking account for your business.
Don't co-mingle your family bills and your business profits.
Keep track of your paper receipts for all your business-related purchases
Record your car mileage when you are traveling to parties or running business errands.
Hire an accountant, or use accounting software, to categorize your business income and expenses.
Set aside some business funds to cover a future tax bill.
*We are not accountants or tax experts. This recommendation is offered for informational purposes only, and in no way constitutes financial or legal advice. Please consult a qualified accountant, tax-preparer, or financial advisor to help you file your taxes.
ACCOUNTING HELP
Think about all the people who you know that own and run successful businesses...
flower shop
hair salon
house-cleaning service
landscaper
spa
garden store
favorite local restaurant
Chat with the owners of these establishments and ask how they manage their bookkeeping.
Who keeps track of their financial records?
Who does their taxes?
Ask if they can vouch for a capable, competent, trustworthy, and affordable accountant or tax preparer.
Call these financial professions on the phone. Say who recommended them. Let them know that you are starting a new business as an independent sales consultant. Ask for a consultation appointment to explore the financial services they offer.
At your appointment ask about their credentials, what kinds of clients they serve, and how they can help you get your new business off to a good financial start.
Get a clear understanding of what records you should supply, as well as what services they are able to provide for you.
Don't be shy about asking for the cost of these services up front.
Do they charge one set yearly fee?
Do they charge a-la-carte for each task ?
If the financial person you interviewed isn't quite right for you, ask if they know anyone in their field who would be a better fit for your needs.
Proceed with confidence. Shop around. Once you find the right person, you'll enjoy a productive and pleasant relationship for many years to come.
bOOKKEEPING
In our case, we do our own record-keeping and taxes, since we have backgrounds in Economics and have previous business experience.
We use Go Daddy Accounting* to manage our bookkeeping.
We pay under $10 a month for this service. It is easy and convenient.
Go Daddy Accounting links to our dedicated business checking account, so we rarely have to enter deposits or expenses by hand.
The software is geared for small businesses, so most of the transactions are automatically categorized.
Each month, we print out our monthly statements, which we put in our financial binder with all our paper receipts and bank statements.
Our business records are organized and easy to manage.
*We are not advertising or promoting this service and we receive no compensation for mentioning this product. We suggest that you read many reviews from diverse sources and pick the accounting software that best fits your needs, financial expertise, and budget. Hiring a qualified accountant, tax-preparer, or financial advisor is also an excellent idea.
TAX TIME
When taxes are due on April 15th, your accountant or tax professional will be delighted with your highly organized financial records.
All your expenses are organized into categories that will help your tax-preparer calculate your business deductions...
Advertising
Accounting Fees
Bank Fees
Charitable Contributions
Computer Equipment
Meals and Entertainment
Mileage
Office Equipment
Postage
Supplies
Telephone
Travel expenses
FEARLESS FILING
We have had zero problems filing our own taxes with Turbo Tax and, more recently, Tax Act. Filing gets easier each year, because our previous federal and state returns are automatically imported, which is a big time saver.
Still, it might be a good idea to hire an accountant, tax-preparer, or financial advisor to file your business taxes for the first time. Sure, hiring a professional might cost more than buying a software package, but you'll have the luxury of asking questions and getting personal attention.
Later on, when you feel confident that your finances are organized and tax-ready, you might want to file your own returns using software. It's really up to you.
TAX WRAP-UP
People, like us, who make money...pay taxes.
It's nothing to dread or worry about, though.
Make it a painless process by getting some help organizing your finances from the start.
Ask local business owners how they handle their bookkeeping and taxes.
Hire an experienced, trustworthy, and affordable financial professional to assist and advise you.
When tax time rolls around in April, you won't shed any tears over taxes.
You'll be thinking about sunshine and spring flowers instead!