More & more, I see tax pro’s marketing the S-Corp election for massive tax savings but just like anything else, it’s important to do your homework before letting someone convince you that their way is the right way. It’s not a one-size fits all, and in this article I’m going to share some of the drawbacks (dirty secrets) about S-Corps plus what you can expect to pay for various services associated with electing S-Corp status.
First, though,
An S-Corporation, or S-Corp, is a selected business structure, that one would choose at the time of forming their company. Choosing this structure allows pass-through taxation, meaning that profits and losses pass through to shareholders' personal tax returns, avoiding double taxation (i.e. the business being taxed AND you personally being taxed the income you pay yourself from the business).
On the other hand, the S-Corp...
If you’re in a business similar to mine where you have long-lasting client relationships or high ticket offers (courses, coaching, etc), you might want to think about gifting to your clients as appreciation for signing on with you, or as you close out an engagement. Of course, there’s always holiday gifting too. However, before you start shopping for presents to show your appreciation to clients, employees, or vendors, it's important to understand the IRS rules and requirements surrounding business gifting. In this blog post, we'll explore the dos and don'ts of business gifting and provide examples of what you can deduct and what you can't.
A business gift refers to any item given to clients, employees, vendors, or business associates with the intention of promoting goodwill, strengthening relationships, or expressing gratitude. Common examples of business gifts include personalized merchandise, gift baskets,...
Running a successful online course business requires more than just creating and delivering valuable content. As a course creator, you need to track and analyze various financial indicators to ensure the profitability and sustainability of your program, course, and business. In this blog post, we will break down the key financial metrics that you as an online course creator should pay attention to in order to gauge the health and success of your business.
One of the primary financial indicators to track is revenue. Tracking your different revenue streams such as: course sales, private coaching income, affiliate income, and any other...
At Of Course Bookkeeping, our select software for Online Course Creators and Ecommerce is Xero.
Here's why:
Here are some of the reasons it's best for course creators:
Welcome back! Last week we talked about figuring out when you have an employee vs. an independent contractor. This week we’re talking about when you will know if you can afford to hire an employee.
But first, I need to be transparent and let you know that some links are affiliate links which means if you buy, I may receive a small commission from the sale. This does not cost you anything.
“If you can’t fund a separate bank account, you can’t afford to hire anyone.”
You may have heard this before, but if you’re feeling like you need to hire someone to help out, you probably should have done it already. Hopefully you are finding this article before you get to that point, because there are some steps you will want to take beforehand to make sure you can afford that employee. When you start a business, you should have a vision of where you’d like to end up. And if your vision includes...
So you are here because you want to start an online business. Maybe you have an idea already and you just need to know what to do to make it happen. Or maybe you are looking for ideas on what types of business you can do online. Let’s jump right in!
But first, I need to be transparent and let you know that some links are affiliate links which means if you buy, I may receive a small commission from the sale. This does not cost you anything.
Decide on what you are passionate about and look for a way to either take it online or do it from home. Here are some examples:
Bookkeeping - if you have a great attention to detail and enjoy things with a right or wrong answer. If you have experience in bookkeeping, check out The Bookkeeping Business Accelerator®. If you need to learn bookkeeping, check out Become a Bookkeeper
Virtual Assistant - if you are highly organized and enjoy helping others manage their schedules,...
What an exciting time in your business, if you have gotten to the point where you need to add to your team!
Sometimes you can hire contractors (to outsource some work) but sometimes it makes better sense to hire an employee. We’ll go over the differences between ‘independent contractor’ and ‘employee’ from the IRS’s standpoint, so you have all the info you need to make the right choice for your business. Next week, we’ll talk about the money side of hiring one vs. the other.
The IRS has a 3-factor approach to determining who is an independent contractor vs. an employee. Those 3 factors are: Behavioral Control, Financial Control and Relationship of the Parties.
A worker is considered an employee if the business has the right to direct and control the work performed, even if that right isn’t exercised.
These are examples of behavioral control that would indicate the worker should be an employee:
The...
So you’ve read or maybe listened to Profit First, by Mike Michalowicz. Or you’ve heard about it, but you aren’t much of a reader and you’re looking for the cliff notes version.
The premise
The main idea is to take your profit first, instead of waiting until year end when you file taxes and your accountant tells you what your profit was. You basically budget your profit into your business and work backwards from there. Profit First is essentially the envelope method of budgeting, but for business, and using bank accounts instead of envelopes—because you can’t run a business with cash this day in age.
The 5 envelopes (bank accounts)
You will start by opening 5 bank accounts for your business:
Profit - this is where you will transfer and keep your profit
Owner’s Pay - this is where you will transfer the money you pay yourself
Taxes - you guessed it, this is where you’ll transfer the money for the tax man.
Operating Expenses (Opex)...
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