save for taxes Archives - Solopreneur Profit Coach |

Why Hire a Tax Professional For 2020?

Do not DIY your taxes this year. Especially if you received a Paycheck Protection Program (PPP) loan, a grant, a long-term SBA loan, or some other type of financial assistance, working with a professional this tax season is imperative. Let’s talk about why that is.

Keeping Things Neat

Especially if you got something like a PPP or SBA loan in 2020, there are certain things you need to keep track of and report com tax time. A professional can help you identify these things and get all your ducks in a row.

The same goes for figuring out how to report any grants or other assistance you and your business may have received. I know some people took money out of an IRA, and knowing how to report that is something a professional can help with as well. In general, 2020 was a financially tumultuous year for most businesses and individuals. A professional tax preparer can help you figure out what you need for 2020 taxes, and how to do them to the best benefit for you and your business.

The Benefit of Professional Training

The training tax preparers go through each year is extensive. With tax policy changing every year and differences between handling state and federal taxes, there is a lot to learn (and re-learn). A lot of the things they get trained on are just the types of things small business owners often miss or botch on their own taxes, simply because they don’t know what they’re missing.

2020 was a very “special case” type of year in terms of public policies around money. In special cases like these, taking advantage of the special training of a professional can be very helpful.

Reach Out for Recommendations!

If you’d like help or advice from a professional tax preparer, financial advisor, or myself, please don’t hesitate to reach out! I’m happy to give referrals to awesome folks who could become a part of your long term money team. You can reach out to me by scheduling a free 30-minute Financial Self Care Consultation. Whatever path you take, please know I am here for you to act as a resource. I wish you the best this tax season!

Angela

Know What Your Numbers Are Telling You

This article is the third in a month-long series on taking care of your finances as self-care. Specifically, I’m focusing on what you can do with your money to take care of yourself and improve your business in 2019. You can read the whole series by clicking here.

In the last installment of this series, I talked about how important it is to separate your business and personal finances. Doing so gives you access to a lot of important information about your finances. However, it’s also important to know what to do with that information once you have it. This requires some analysis. Let’s dive in:

Know What Your Numbers Are Telling You

Look back through your financial records for the year. Figure out what products, services, or other sources brought in the most revenue. Identify which months you made your largest and smallest amounts of revenue, so you can understand the rhythm of your income.

Do the same for your expenses. Did you have surprise expenses come up that caused you problems? How can you plan for these surprises in case they happen again? For many people, taxes are a surprise expense. You can plan more effectively once you look at last year’s tax expenses, and prepare for upcoming years.

Solopreneur Paycheck

Look at your total revenue. Did you pay yourself? Did your business pay you money? If so, move money from your business to your personal account. In the Profit First system, Owner’s Pay and Profit accounts are used to divvy up income and ensure that the owner is getting paid. This is called paying yourself first, an important practice for any business owner. Actually separating your income from the other categories, like savings for operating expenses and taxes, is key to a thriving business.

Bringing It All Together

By analyzing your finances and gleaning all this information, you are ultimately able to tie loose ends and create a financially streamlined business. Strategizing to prepare for surprise expenses and taxes, offer more of your most profitable products or services at the optimal time of year, and remembering to pay yourself all contribute to financial success. If you’re interested in doing this analysis work with some professional help, I’m happy to speak with you. Take a look at my service packages and schedule a curiosity call. If this has piqued your interest about Profit First, download the first 5 chapters for free here on my website! I do hope this post helps you find some financial insights into your own business!

☮

Angela

Image Source: Martin Sanchez