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NEW ARTICLE featured on artist uprising:
So, you’ve developed your product, you’ve honed in on your brand, you’ve worked hard to gather a social media following and have a gorgeous Squarespace website… but did you file your tax return?
1. Bite the bullet.
Invest in your “back-office” tasks as much as the product you’re selling. You buy the proper paint brushes, but have you bought a proper filing cabinet? Seriously. Set up a real office. Just go buy some paper clips, for Pete’s sake.
2. Crunch the numbers.
Take time to budget properly. Learn how to use spreadsheets. (We love Google Sheets!) And, most importantly, pay for a cloud-based accounting software. A real one, like QuickBooks Online or Xero, not Mint that does a half-ass job at tracking a few key budget items. It’s one more subscription fee to add to your monthly expenses, but the payoff is huge in the long run.
This will streamline your accounting tasks, as well as make sure you’ve kept up with the bookkeeping, which may even help you save on the tax that you owe!
3. Consult with professionals.
Don’t know how to incorporate? Don’t know how to set up your accounting software? Don’t even know where to start? Call a professional, like the ones at Pencil, Inc, and pick their brains. Most professionals will consult with you over the phone for FREE! (We like that F-word.) So, take advantage. Hire professionals. Then, once you have your *free* game plan in place: invest in establishing the foundation of your business like a good ol’ startup would. Pay the professionals to ensure that you do this right, from a legal standpoint and a tax position. You don’t want to incorporate as an LLC, for example, because you will not save a penny on self-employment tax. So how do you maintain limited liability and save tax?
4. Hire a professional.
Hire a professional well versed in small business startups, like those at Pencil, Inc, and they will make sure you do it right.
5. Don’t get behind.
The worst part about accounting is the cloud hanging over your head whenever you haven’t kept up with it. For bookkeeping, do it on a monthly basis. Don’t wait to code transactions. You will forget what they were for and will have to dig around for receipts or flip through your calendar of events. So many people take a stack of bank statements to their CPA and they charge extra to do the bookkeeping for you. Avoid that headache and stay vigilant. Then, when January rolls around, wrap up those books and send off the financials to your CPA immediately. Don’t wait to know what your tax burden will be, and try to avoid filing an extension, if you can. To summarize: You are running a business. So act like one. Your art is no longer the same cute hobby that it was in junior high. You’re a shrewd business woman making a living selling products, which happens to be your passion. (LUCKY!) Now, go have a blast with it, including the accounting part.
Need a consult?
Use Promo code: ARTUP to get one free phone consultation with the Pencil, Inc. team to help you with your accounting needs!
new tax return filing deadlines
This effects C-Corporations, S-Corporations and Partnerships (which includes many LLC's.) See the schedule below for details. We offer tax return preparation services for personal and corporate returns. You'll face penalties for not filing on time. If you engage our tax preparation services, we will file your extension for free! Click here to contact one of our team members today.
- C-Corporations: now due on April 15th
- S-Corporations: now due on March 15th
- Partnerships (Some LLC's): now due on March 15th
*Dates are based on a December calendar year end.
The following are notes from our presentation on how to limit your liability by implementing internal and external controls, safeguarding your company against inside and outside fraud.
- Outside Fraud:
- Definition: Somebody outside the company finds a way to steal your money.
- Debit cards, hacking into bank accounts, email accounts, etc.
- How to protect yourself:
- Never have a debit card associated with your major bank account. Debit cards can be stolen so easily.
- Setup online banking so that you cannot send money out of your bank account. Do not enable the wire transfer or external transfer feature for your online banking account. (Banks will not pay the loss.)
- Do your borrowing from a separate bank, and not the bank where you have your major cash bank accounts. Bank loan documents have a clause where they can seize the assets held at the same bank, including cash accounts.
- Inside Fraud:
- Definition: Somebody inside the company stealing from you
- How to protect yourself:
- Divided responsibility. Bookkeepers should not sign the checks. Only owners should be a signer on the bank account.
- Fake invoices. The owners should review every payment that goes out.
- Diverting Income. The owner has to stay on top of his accounts receivable to ensure that you are getting your collections. If your business uses cash, you need to have two people count the cash.
- STAY ON TOP OF YOUR BUSINESS