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The joys of the self-employed can be complicated by the necessity of wearing every hat in the business: Owner, Manager, Personnel, Accounting, Sales, Etc. Staying on top of the IRS regulations should be a top priority.
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| 1) |
Pay the IRS first. If you don't have enough money to pay the rent and the IRS for payroll taxes, skip the rent and pay the taxes. You can find another place to rent, but you cannot continue in business if the IRS shuts you down. |
| 2) |
If you meet the requirements, take advantage of the office in home deduction. |
| 3) |
If your spouse works for you, consider paying her or him wages and paying for employee health insurance. |
| 4) |
Use the IRS Section 179 election to expense equipment purchased during the year. |
| 5) |
Children may be able to work in your business and earn their allowance. They may also be exempt from FICA tax, Federal and State Unemployment taxes, if your business operates as a "Sole Proprietorship". |
| 6) |
Choosing straight-line depreciation for your auto can allow you to switch between actual and standard mile deduction each year, depending on which method has better results. |
| 7) |
Remember that every dollar spent becomes one less dollar of profit in your pocket. |
