This week’s question comes from Jack, who asks, “I took my nickel and dime side hustle to full business with legal papers the second week of January last year. Doing business with full transparency wasn’t as difficult as I thought it would be, but it did slow down some processes and limit some chances to make potential revenue. So my ‘real’ business did not pull in as much cash as I did with the informal side-hustle. What can I do to prepare for next year?”
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Congratulations on making it a year in
According to the Small Business Administration, about 550,000 small businesses close each year, with their average lifespan about eight and a half years. The report is dated, cited February 10, 2005, information is consistent. Giving your business a 50/50 chance of seeing its next birthday is giving very generous odds.
And the best way to ensure it survives another 365 is to plan ahead. So as you close out 2018, with just days until 2019, take these last few days to do a few actions that will set up for a good fiscal year start, and save you from April 15th headaches a few months in.
There are plenty of money moves to make at years end that will benefit you and the public right now. It’s Christmas time and a great time to upgrade equipment while the stores are offering discounted gift prices on everything. Electronics, furniture, accessories, and various services are doing exactly what you are doing. They are preparing for the next year by trying to gather as much cash as possible and clear out as much excess inventory. Buy some new computers. Schedule a doctor’s appointment. Update your furniture. Take advantage of holiday prices and keep receipts.
You can also contribute to charities. Dollars given for a good cause are tax deductible. There are plenty of worthy and not-so-worthy causes fighting for your attention, so do some due diligence before you write that check. And keep receipts.
The greatest charity you can contribute to is yourself. Putting some money in an IRA is a great way to save on personal taxes. A traditional IRA contribution is tax deductible with aftertax-money
Alternatively, you can make estimated payments for your 2018 tax to save yourself some of the burdens or writing a large check in April. This is an especially good practice if you are filing as an individual taxpayer and you expect to owe tax of $1,000 or more when you file your federal income tax return. These are usually done on a quarterly basis (so they call them quarterlies) and sent in with a federal form1040-ES. Start sending in your quarterlies now, and turn this into a regular three-month activity. You are putting all this work into making your business look good on paper and is making
This Week’s Business Questions Asked Here: How Are You Getting Your Business Affairs In Order In Preparation For The New Year? (answer in the comments)
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