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No one likes waiting for a payment from a client. It’s stressful, and you find yourself refreshing your email inbox obsessively, waiting for an update or a notification that they’ve finally paid you. That’s no way to live. You deserve to be paid for your work in a timely manner, and you shouldn’t put up with flakey clients who don’t fulfill their financial promises to you. We have just one tip to stop late payments forever.
Being in business for yourself can look like a lot of different things. You could own a small cafe, an online boutique, or even a freelancer. Freelancing is one of those things that a lot of people don’t know a lot about. If you’re considering a career as a freelancer, or you’re just beginning to accept freelance work and you want to begin doing it full time, there are a few things you haven’t even thought to consider, but that you’ll need to figure out in order to be successful.
During the summer season, your regular budget and spending habits get disrupted. Whether it’s because the kids aren’t in school anymore, or you got a little too ambitious with your summer travel plans, you may find yourself at a loss. Just because of the change of season and the pressure from your kids to get a season pass to the neighborhood pool, you don’t have to throw your regular budget out the window. Continue Reading →
Tax season every year may seem repetitive, but if this is the first year after a major career change, you may find yourself lost when it comes to filing your taxes. This is especially true if you find yourself filing taxes for the first time working for a small business. The good news is that the amount you’re being taxed is staying the same, just the way that you gather the appropriate information may differ from what you’ve done in previous years.
Things to remember when filing taxes for a small business
Filing your federal taxes as a small business for the first time may be confusing. There are a few things you should keep in mind when getting ready to file your taxes.
1-Your legal entity affects your tax burden.
2-You can probably deduct more than you think.
3-Don’t forget to account for your startup expenses!
4-You’ll have to make estimated payments.
5-You may be responsible for paying self-employment tax.
This is at what level you’ll be taxed. In most cases, small business owners can pay taxes at the shareholder level, instead of being subjected to the higher rates required of corporate businesses. There are limitations, however, so it’s important to research what legal entity your business falls under.
Make sure you keep track of all business expenses during the year! You can deduct for travel, business supplies, and employee salaries, among other things. Keeping track of any and all business expenses will make it a lot easier to figure out how to save money during taxes.
There are certain deductions that you can make during the first year of your business that you won’t be able to deduct later. You can save money on your taxes even if you’re not really making a profit on your business yet.
Being self-employed, you’re required to pay taxes every quarter, instead of just once a year. If you’re new to the world of small business, this is probably something you weren’t aware of! During your first year as a new business owner you’re not subject to this, but it’s something that you’ll have to worry about the following year, so it’s never to early to start planning for this.
When you have an employer, they pay half of your income tax. When you’re self-employed, you’re responsible for paying the tax portion for both employee and employer.
Although the beginning of a new year brings a lot of wonderful things, like the end of winter, warmer weather, and blooming gardens, it also means it’s a time of year that many Americans dread: Tax season. No one enjoys filing their taxes, and there are certain professions that make filing your taxes more complicated than others. One of these careers is Real Estate. Especially if you’ve only just recently entered the world of Real Estate, the idea of filing your taxes can be intimidating.
Most real estate agents operate their businesses as sole proprietorships. This means that they aren’t anyone’s employee, and you have no partnerships with any businesses. If this is the case, you are effectively filing your taxes as a self-employed individual. This is how you’ll file your taxes if the majority of your income comes from individual sales, rather than hours worked.
When to pay taxes
You have a few different options when it comes to paying your taxes as a real estate agent. When you receive your commission checks, none of your taxes will be taken out. You either have to pay your taxes at the end of the year, due in April, or you can pay your taxes as you go. The easiest option for paying your taxes is to pay them quarterly. This way, you don’t have an enormous sum of money to pay at the start of every year. It also helps you save your money and make plans with it throughout the year. If you know that you’ll be paying taxes every quarter, you’ll get a better idea of how much money is going to be coming out of your account every three months, which means it will come as much less of a surprise when you actually have to pay taxes.
How to pay your taxes
This is probably the trickiest part of filing your taxes as a sole proprietorship. You won’t necessarily get tax documents in the mail every January like a lot of other people, you have to do it yourself. Getting someone with experience to help you file your taxes is a really good idea, especially when you’re first starting out. A lot of people want to do everything themselves, but if you really don’t know what you’re doing, it could cause costly mistakes down the road. Make sure you keep track of all of your deductible business expenses throughout the year as well, as this will help make your tax process easier if you don’t have to go searching for things to deduct.
Tax season is a time of year that most Americans dread. It’s something that requires a significant amount of effort to do correctly, and the idea that if you do it wrong that you’ll be heavily penalized by the IRS makes the task stressful. It doesn’t help that the majority of Americans are uneducated on what their lost tax dollars do. Taxes are just a necessary chore that all Americans participate in together every spring, without really understanding what their money is going towards.
Although the exact amount per dollar that goes to different causes differs slightly per year, each year the percentages are roughly the same, differing by a few cents one way or the other.
Where do my taxes really go?
The easiest way to envision this is to imagine your paid taxes as a single dollar. Although we all pay much more than $1 every year in both federal and state taxes, the easiest way to look at it is to simplify it to a small dollar amount.
One dollar in federal taxes gets divided up as follows(as of 2015):
28.7 cents – Health
25.4 cents – The Pentagon
13.7 cents – Interest on Federal Debt
8 cents – Unemployment and Labor
5.9 cents – Veterans Benefits
4.6 cents – Food and Agriculture
3.6 cents – Education
2.9 cents – Government
1.9 cents – Housing and Community
1.6 cents – Energy and Environment
1.5 cents – International Affairs
1.2 cents – Transportation
1..1 cents – Science
Over the past few years, these numbers haven’t changed very much, and so you should expect your 2016 tax dollars to be spent about the same. However, due to the recent change in presidency, it’s very possible that these numbers could drastically change when you file your taxes next year.
State vs Federal taxes
The above figures are a representation of how your federal tax dollars will be spent. However, your individual states’ taxes will differ dramatically. In Utah, we have a single personal income tax, which is a flat rate of 5%. According to the tax foundation, the total income tax collections averages to $833 per person. Utah ranks 23rd highest in the country for state income tax.
Although paying your taxes may always be a daunting task, it helps to understand where your tax dollar is actually going. Ignorance may be bliss, but a lack of ignorance makes things a lot less confusing.
More and more individuals are pursuing going into business for themselves, preferring to have control over their career rather than reporting to a chain of command within a company. Becoming self-employed can be nerve wrecking, as you have no way of guaranteeing the future. No matter how successful your first year of being self-employed went, you’re probably dreading tax season. Taxes aren’t something anyone really enjoys doing, but being self-employed can make filing your taxes a much more daunting task.
How do self-employed taxes differ?
When you have an employer, they withhold your income and Social Security and Medicare taxes every year. Sometimes, they withhold too much, resulting in a tax return when you file your taxes. Being self-employed means that no one is withholding these taxes for you, which results in having to pay these taxes when it comes time to file your taxes.
Instead of getting a W2 form 1040 in the mail at the beginning of the year to make filing your taxes a simple task, you have to fill out your 1040 form yourself. While this may seem difficult, after doing it a few times you’ll be filing your taxes yourself with ease. The IRS website has a lot of resources to access these forms and instructions on how to fill them out.
Even when you’re not self-employed, you’re sometimes eligible for certain deductions that will save you some money when filing your taxes. When you’re self-employed, you’re eligible for a few different deductions. For example, if you work out of a home office, it’s possible you’ll be able to deduct some of the expenses of your home. This is called the home office deduction, and is available to both homeowners and renters.
Something important to remember throughout the year to make your tax process easier, is to not only keep track of your income, but also your expenses. Save any receipts that you got from business expenses. For example, if your line of business requires you to travel a lot, save receipts from gas stations, purchasing airline tickets, and business related hotel stays.
Save 30% of your income
You don’t want to be blindsided when it’s time to pay your taxes. The easiest way to prevent having to pay a lot out of pocket every spring, is to put away 30% of your income every month, so you have money in your savings for all of your Self Employment Taxes.
Your kids want to earn money to help them buy treats, toys, and presents for themselves, their friends, and siblings, yet gone are the days of lemonade stands, yard sales and mowing the lawn. What can you do to help them earn money despite being trapped inside by the dreadful winter weather?
During and after a snowstorm, allow your kids to go around the neighborhood asking if the neighbors will allow them to shovel their driveways for a small fee. The going rate for snow shoveling is about $10-$20, depending of the complexity of the job. You can teach them how to bargain with neighbors on a good price. Have them design and print out fliers to take around right before it snows with a number to call if the neighbors would like them to shovel their driveway. However, make sure to check local laws about unlicensed solicitors and peddlers to make sure that your children are not breaking the law by handing out the fliers or going door to door.
Some people pay their children an allowance to do their household chores. If you do not, you can pay them for going above and beyond the call of duty. If you have something to do around the house that you haven’t gotten to yet because you are too busy, hire one of your children to do it for you. They can organize rooms, do the laundry, deep clean bathrooms or the kitchen, etc. You can pay your children less than you would pay a maid to do many of the same tasks. Make sure that you set high expectations for the finished product, and pay based per completed task, not per hour.
Pet Sitting or Baby Sitting
If your children are old enough, help them find babysitting jobs with neighbors. Many mothers need someone to tend their kids while they do their Christmas shopping. Your neighbors might be going out of town for the holidays and they may need someone to watch their dog while they are away. Most animals are fine to stay at the neighbor’s house and they simply need someone to feed them twice a day and let them out to use the bathroom. However, some pets need special attention and will need to be brought to your house. Make sure you understand the risks before you bring someone else’s animal into your home.
Sell Things Around the House
There are many things around your house that you probably don’t use any more: old electronics, books, decorations, games, etc. Help your children learn how to post things on local selling sites like Craigslist or KSL. Give them a percentage of the sale if they do the footwork like taking pictures and posting the item.
Winter is an expensive time with the four most extravagant holidays right after each other (Christmas, Thanksgiving, Valentine’s Day, and Halloween), increased utility bills, and more frequent driving. All of these expenses add up and can be difficult to foot, especially if you are on a tight budget. There are many ways to save money through the winter, including cutting expenses, driving less, and making homemade gifts.
Turn Down the Thermostat
Turning down the thermostat can save you up to 3% on every degree below 70°F that you set your thermostat. Get a programmable thermostat so that the heat can automatically be lowered when you are away at work and during the night so you can save money but still be warm.
A lot of heat escapes through the cracks under doors and around old windows. Put a towel under your door to prevent heat from escaping. Optionally, you could buy or make a draft guard to do the same trick. Put weather stripping around the edges of your windows, and insulate the glass by applying a clear plastic film to prevent heat from escaping.
During the winter, people tend to drive more, even when going down the street to visit a neighbor. Driving more uses gas, and turning on the heater uses even more gas. Try to combine trips while running errands to save money. For example, instead of coming home from work and then going back out to go shopping, stop by the store on your way home.
Avoid Retail Therapy
Many people try to beat the winter blues by participating in Retail Therapy. While sometimes it is important to purchase new boots and clothes if yours from last year are destroyed, you don’t need 30 pairs of boots or 17 brand new coats. Try to limit your unnecessary spending. If you would like to treat yourself, buy new-to-you clothes by going to a local thrift store.
There are many things around your home that you never use and just clutter your home. Sell them on eBay or Amazon.
Give friends, neighbors, and family members meaningful homemade presents rather than expensive store-bought gifts. Homemaking presents will also make your friends and family feel more important because you took the time to individualize something for them. If you do buy gifts from a store, do not pay to have them wrap it for you. A roll of wrapping paper costs $2-$5, and you can wrap dozens of presents, while it can cost $5 to have one present gift wrapped at the store.
Halloween has come a long way from the home-made holiday that it once was. People used to make homemade treats to pass out to little ghosts and goblins instead of purchasing bags of candy. Costumes were home sewn or glued instead of purchased at the local grocery store or online. It wasn’t until the 1970’s that the holiday became commercialized. Now, consumers spend more during Halloween than any other non-gift giving holiday (it is surpassed by the three main gift-giving holidays: Mother’s Day, Christmas and Valentine’s Day). Americans will spend between $7-8 billion on Halloween, including candy, costumes and decorations. Read on for more crazy financial facts about Halloween. Continue Reading →