NotSoObvious Posted March 19, 2013 Share Posted March 19, 2013 We are making a big leap into self employment. Can you give me your best tips on saving money, what we can write off, saving for retirement, organizing finances, etc.? I have to figure out health care this week. Can you recommend any good websites that offer advice? We've always been employees! We have some professional help, but I'm completely obsessive and need to read and research for myself. :) Quote Link to comment Share on other sites More sharing options...
Catwoman Posted March 19, 2013 Share Posted March 19, 2013 My best advice to you is to contact a CPA in your area who specializes in working with small businesses, and bring a list of questions with you when you meet with him or her. It might cost you a bit of money to do it, but the information you get could potentially save you a bundle in the long run. Quote Link to comment Share on other sites More sharing options...
NotSoObvious Posted March 19, 2013 Author Share Posted March 19, 2013 Hmm... We've been talking with our regular CPA but maybe I should find someone who only works with small businesses. Thanks! Quote Link to comment Share on other sites More sharing options...
Susan C. Posted March 19, 2013 Share Posted March 19, 2013 Make sure you save enough for taxes, they are now much higher. You have self employment taxes (the old social security/medicare tax on your stub, but now double because you are now the employer and employee) along with federal taxes. I was shocked at how much I sent in quarterly! Put aside 20-25% for estimated payments. Quote Link to comment Share on other sites More sharing options...
Stellalarella Posted March 19, 2013 Share Posted March 19, 2013 We made the leap 3 years ago. It's been really hard. I had no idea how comforting it was to have regular and predictable income. Save, save, save up to get 3 months living expenses (at least!!). Don't try to keep living on your current budget--try to cut back and save everything you can. My husband's freelance income tends to decrease dramatically!! between Thanksgiving and mid January. We've learned the hard way that he really needs to make the bulk of his income by October. Not having a real, true ability to take vacation days has been an emotional challenge. You might have to find a way to navigate that if you have been used to paid time off. I will say, though, that even despite all the anxiety and difficult adjustment, we are glad to be self-employed. It has been hard, but not without its benefits. Quote Link to comment Share on other sites More sharing options...
dancer67 Posted March 19, 2013 Share Posted March 19, 2013 That is a loaded question, We have been self employed for 10 years. Write offs? Depends. Are you using part of your home for a business? Renting a space? You have to pay estimated quarterly taxes. Say goodbye to tax returns. We use ours(if we get any) to be applied to next years tax payments. We do not use an accountant. I do our taxes on turbo tax which is easy. But a CPA would be good if you have no clue where to start. Get an EIN number so you do not have to use your SS#. Are you having employees? That is a whole other ballgame. In the state where I live, we get health insurance because we meet the income guidelines and do not have access to health insurance from an employer. And many things also depends what kind of business. Are you going to be keeping inventory? Do you live in a state where you have to pay sales tax? A lot of info out there. But unless we know specifics it is hard for anyone to tell you what you can deduct on your taxes etc...Good luck! Quote Link to comment Share on other sites More sharing options...
magnificent_baby Posted March 19, 2013 Share Posted March 19, 2013 We've never been self employed full time, but DH does part time self employment. Hire a very good tax consultant. Taxes can get complicated when self employed. Quote Link to comment Share on other sites More sharing options...
Halcyon Posted March 19, 2013 Share Posted March 19, 2013 Set aside money for taxes. See if your state has health insurance that you can buy into, even if your income is too high. Regular insurance is killing us. Set a budget and stick to it. Set up an emergency fund of 3 months living expenses. DH and I have been self employed our whole lives (he has been running his business for 30 years). Taxes are a BIGGIE. Huge amount of money. Quote Link to comment Share on other sites More sharing options...
elegantlion Posted March 19, 2013 Share Posted March 19, 2013 Depending upon your business, get used to irregular paychecks. Save all your receipts, don't wait until the end of the quarter or year to organize them. Familiarize yourself with the necessary tax forms, like a schedule C. If driving is part of your business, keep track of mileage. Know what constitutes an employee or a contract worker and know how to pay them and generate their needed tax forms, W2 or 1099. Quote Link to comment Share on other sites More sharing options...
Happy Posted March 19, 2013 Share Posted March 19, 2013 Keep a savings buffer, always. Some years my little photography business didn't make a profit, but all the tax deductions saved us whopping amounts on our taxes. Learn to see the benefits where you can. When a self-employed person is sick, injured, or on vacation, the income stops. If you can build a business where activity is not dependent on you, the income continues. Make that a goal. Last year when I was sick, my real estate business came to a near stand still. My goal now is to build a team of other agents and or rental properties around me so that I will have an income even if I get to take a month off to visit Paris. Which reminds me...we do take time away. Often it is for a convention or other business travel...we get to go some place fresh, see new sites, learn something, and write most of it off. Look for educational and business related opportunities for travel if it's important to you. Both my husband and I are self-employed in different businesses. Variety is important. When his work is not going well, hopefully mine is and vice versa. Our health insurance is through Blue Cross, Blue Shield. There are ways to join 'groups' so you don't have to be totally alone. Our premiums are whopping, but the insurance is decent. It's one of the costs of doing business. Quote Link to comment Share on other sites More sharing options...
duckabell Posted March 19, 2013 Share Posted March 19, 2013 Also talk to an accountant about the structure of your business -- LLC, s-corp, etc as there are different legal and tax implications of each structure. Quote Link to comment Share on other sites More sharing options...
texasmama Posted March 19, 2013 Share Posted March 19, 2013 I echo the advice to have a savings buffer for hard times. Hard times come more often when you are self-employed. Get used to things being unpredictable. Health insurance and dental care have been two of our biggest issues/expenditures. We pay too much money for lousy health insurance with high deductibles and poor coverage, and there is no decent dental insurance that I have found so we just go without and pay out of pocket. This adds up for my crew. Quote Link to comment Share on other sites More sharing options...
Stellalarella Posted March 19, 2013 Share Posted March 19, 2013 Do not wait until the end of the year to try to make sense of expense receipts, etc. It is just so much better to do it all along the way. Also, if you are using vehicle for mileage, make sure you have a beginning odometer reading for the date you begin using that vehicle for your business. Also, if you have vehicle expenses please look up AND RECORD the blue book value for your vehicle on the date that you begin using that vehicle for business. You will need that value if you ever sell the vehicle...we had to deal with that this year. ugh. Quote Link to comment Share on other sites More sharing options...
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