Did you know…
…that in 2019, American women started an average of 1,817 new businesses per day between 2018 and 2019?
…that these businesses generate revenues of $1.9 trillion?
…that over the last five years, the total number of women-owned businesses increased 21%?
It’s true! Female entrepreneurs are in a league of their own and help propel this economy forward each and every day.
However, whether it is a side-hustle or your full -time gig, the day-to-day business grind can be quite challenging at times, and the quarterly tax-filing process is no exception. To help make that process a bit easier, I’ve partnered with the tax pros at H&R Block and outlined five key tips and tricks every entrepreneur can implement:
Tip #1: Keep business and personal expenses separate
This. Is. So. Important.
Before you do anything else for your business, do yourself a favor first and make sure you’ve established a separate business account for your expenses. Even if your business is only just getting started, take the time to open a dedicated bank account just for your business needs. Mixing your business and personal expenses can create unnecessary headaches when it comes to filing taxes and keeping information organized. Take a few moments this week to make sure you’ve enabled the adequate level of separation between your business and your other finances. You’ll be glad you did!
Tip #2: Track your income and expenses throughout the year
As you can likely deduce, staying organized is the name of the game if you are to achieve success as an entrepreneur. To that end, filing your quarterly taxes will be MUCH easier if you track your income and expenses in real-time throughout the year. Having someone on hand to manage your books or just keeping track of your expenses in a simple spreadsheet will make it far less complicated to manage your tax liabilities throughout the year.
Tip #3: Set aside money for your taxes weekly
Just as you would set aside money to fund an emergency account or other savings goals in your personal life, the same should also be done for your business. Make arrangements to transfer money from your business checking to your business saving account each week (or whatever frequency works best for you). This way, you will have a pool of funds to draw from each quarter when paying your taxes or to use in the instance of an emergency.
Tip #4: Make sure you’re saving for your retirement, too!
Though entrepreneurs often have a to-do list miles long, one “task” should be prioritized early on: saving for retirement. It can be tempting to wait to contribute to your own retirement until after your business is established and viable, but keep in mind that time is such an important ingredient in the investing recipe if you are to truly allow compound interest to work its magic. This week, spend a few moments to understand the best tax-advantaged retirement options available to you as a self-employed entrepreneur. If you already have such an account open, be sure to assess your progress. Can you increase your contributions? Do you need to make any adjustments? Your future retirement is important – make sure you prioritize it!
Tip #5: Ask the experts when needed
Chances are, you didn’t get into your business because you love doing your taxes. There are only so many hours in a day, so don’t let worrying about your taxes or bookkeeping prevent you from using that time efficiently. H&R Block offers solutions for all of us self-employed and side-husting businesswomen that can get you help wherever, whenever and however you need it. Instead of trying to do everything yourself, for what you don’t know, ask the experts. Their dedicated resources specifically created for entrepreneurs can make all the difference in allowing you to focus on being the incredible businesswoman that you are.
This post is sponsored by H&R Block and may contain affiliate links. We’d like to thank them for their partnership and dedication to helping educate women on their retirement options and empower them to own their financial futures.
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