Taxes

Don’t get caught up in hating them, just pay them when they’re  due. Consider them the cost of doing business.

There’s a lot to know about tax liability and filing for the various business structures so, and especially if you’re only accustomed to a simple, annual, personal tax return, it’s probably wise to use an accountant who is up to date on the current tax laws.

Regardless of who is advising, you, the responsibility for keeping current and accurate records and filing in time is yours. Likewise, it’s your responsibility to exercise good judgment in filing: some people try to shoehorn everything possible into exemptions, clearly beyond the intent of the law. Other people can’t be bothered and just pay more so they don’t have the IRS come barking around. Good judgment means understanding the law and applying it as intended to precisely meet your tax obligations under it.

Regarding those tax obligations, they’ll vary in type, percent, due date, and the form needed to report them, all depending on your business structure (and the changing laws.) The IRS has a page detailing the filing requirements for the various business structures.

Once you understand your tax liability, every month set aside that money in your main business account. You might consider opening a separate account for the money that will go toward tax payments so you run no risk of spending money set aside for the taxman. It’s no joke: you don’t want to miss payments and you don’t want to to be hit by a multi-thousand dollar tax bill claiming money you’ve already spent.

Finally, don’t forget also to collect Sales and Use Tax as appropriate for your services, record and set aside that collected tax, and then report and pay it on time according to your state’s tax laws.