Managing your business’ books doesn’t have to suck. To help simplify the process, we’ve started collecting some of our most asked for resources—including a profit and loss balance sheet template and an individual tax return checklist. See below for downloadable links. Looking for something else? Contact us.

So you’ve started a new business, or you’re working as a 1099 contractor. It’s important to know that the IRS is going to tax you based on whatever you report to them at the end of the year. So how you track and report your activity will make a huge impact on how much you pay in taxes. Let’s look into these three tips:

1. Track all of your income

2. Track all expenses that are related to earning your income

3. Compile your transactions as you go in an easy-to-follow format

When we begin working with a new client earning 1099 income, we almost always recommend setting up an S corporation. There are many reasons an S corporation can make sense, the biggest one being that it is a great way to lower your self-employment tax. Let’s dive in and explore why S corporations are one of the most popular forms of doing business.

Should I form an LLC? We get this question all the time and it is an important one. So, let’s talk about 4 things:

1. What is an LLC?

2. Pros and cons of using an LLC

3. How to set it up?

4. Is an LLC right for me?

Let’s talk about when paying yourself a higher salary can actually save you money. Small business owners love S corporations. There are many reasons for this, the biggest one being that it is a great way to lower your self-employment tax. Income from sole-proprietors and partnerships is generally subject to a 15.3% self-employment tax (on top of the income tax), while income from an S corporation is not. There is a catch, however: an active owner of an S corporation must pay themselves a reasonable salary which is subject to the same 15.3% tax rate. While it is not possible to eliminate employment taxes completely using an S corporation, it is a great way to drastically reduce the amount owed each year. Our clients save thousands of dollars every year (individually) using this strategy.

How should I structure my business? This is a question that every business owner asks when starting out. Let’s do a brief overview of the most common business structures (or “entities”), including sole proprietorships, limited liability companies, s corporations, and c corporations.