How Solopreneurs can Optimize Their Taxes with Rachel Stas
When I first started my business, I was 14 years old. My income was pretty light, and my expenses were even lighter. Heck – I didn’t even pay for hosting. I hosted my few client websites on a web server in my bedroom (don’t tell my old ISP).
But even then, I knew the importance of keeping track of my income and expenses, which I did in an Excel sheet. I’ve always had an interest in accounting, which I thought served me well.
Then I hired Rachel Stas. She made some fantastic changes to my business that ended up saving me money AND lowered my tax bill. And while everyone is different, I know the advice she gives today will be great for any solopreneur*.
Want to hear a longer, ad-free version of this episode where Rachel and I talk about my business, and I ask her specific questions about my books? Become a member of Streamlined Solopreneur Accelerated.
Top Takeaways
- Forming an LLC alone does not provide tax benefits. While incorporation is an important aspect of running a business, you also need to file as the right type of entity (like an S Corp), to help lighten your tax load.
- Track all business income and expenses from day one in a spreadsheet or separate bank account. Don't rely on memory or mix business and personal finances.
- Don’t deduct for the sake of deducting, and be cautious with what you deduct. Some things, like a home office, might offer short-term gains for long-term pain.
Finally, I believe that investing time upfront to properly track finances and get professional accounting help pays off in the long run in taxes saved and peace of mind. Don’t wait until your business gets big to implement good accounting practices.
Show Notes
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