Frequently Asked Questions by New Business Owners

How do taxes work when I am Self Employed?

This is one reason that regular monthly bookkeeping is very important.

Businesses pay taxes on the net income that the business generates.
Net income is equal to Gross Income - Expenses.
The law that tells us what expenses are allowed is in Title 26, Section 162. You can read the text of this law here: https://www.law.cornell.edu/uscode/text/26/162
A bookkeeper will prepare an income statement, balance sheet, and statement of cash flows. We can use the net income reported on the income statement to estimate the amount of tax you will owe each quarter.
The tax payment can be mailed or submitted online. You can make payments more frequently than each quarter, or you can set aside your estimated tax bill in an interest-bearing account and submit payments each quarter. Some clients prefer to invest their estimated tax bill and pay the interest and penalty.
At the end of the year, we will enter your income statement into your tax return and calculate the actual tax owed.

What are my options for raising money?

Some common choices to raise money are:

Family and friends. Many businesses are started with family support.
An SBA Loan or commercial loan.
An equity line of credit.
When a business is up and running, you may be able to raise money from investors either by offering a share of the profits and losses (equity) or by offering interest on a loan or both.

Whether you apply for a loan or offer equity to investors, you will need to tell the story of your business with the Income Statement, Balance Sheet, and Statement of Cash Flows.

How do I apply for an Employer Identification Number (EIN)?

The IRS makes it easy to apply for and receive an EIN online.

You need an EIN if you:

Started a new business
Hired or will hire employees, including household employees
Opened a bank account that requires an EIN for banking purposes
Changed the legal character or ownership of your organization (for example, you incorporate a sole proprietorship or form a partnership)
Purchased a going business
Created a trust
Created a pension plan as a plan administrator
Are a foreign person and need an EIN to comply with IRS withholding regulations
Are a withholding agent for taxes on non-wage income paid to an alien (such as an individual, a corporation, or a partnership)
Are a state or local agency
Are a federal government unit or agency
Formed a corporation
Formed a partnership
Administer an estate formed as a result of a person's death
Represent an estate that operates a business after the owner's death.

You will need to know your legal structure and have the information about your company from your state's Secretary of State. For example, is your business a partnership, corporation, or LLC?

Below is the link to the application. Please feel free to contact us if you need any help

https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online

What are my options for raising money?

Some common choices to raise money are:

Family and friends. Many businesses are started with family support.
An SBA Loan or commercial loan.
An equity line of credit.
When a business is up and running, you may be able to raise money from investors either by offering a share of the profits and losses (equity) or by offering interest on a loan or both.

Whether you apply for a loan or offer equity to investors, you will need to tell the story of your business with the Income Statement, Balance Sheet, and Statement of Cash Flows.

What are my options for raising money?

Some common choices to raise money are:

Family and friends. Many businesses are started with family support.
An SBA Loan or commercial loan.
An equity line of credit.
When a business is up and running, you may be able to raise money from investors either by offering a share of the profits and losses (equity) or by offering interest on a loan or both.

Whether you apply for a loan or offer equity to investors, you will need to tell the story of your business with the Income Statement, Balance Sheet, and Statement of Cash Flows.

Frequently Asked Questions by New Business Owners

How do taxes work when I am Self Employed?

What are my options for raising money?

How do I apply for an Employer Identification Number (EIN)?

What are my options for raising money?

What are my options for raising money?

My Blog

This website uses cookies.