Small businesses are an incredible way to build wealth and a wonderful tool for young adults to learn how to launch and manage businesses on a small scale. Starting a new business venture however can be daunting, especially as new rules and regulations are released or changed. Below are some key points to keep in mind on how on to start a small business venture on the right financial foot.
Consider setting up a simple cash flow system
- Contrary to many beliefs, you don’t need to go out and buy QuickBooks in order to run your business. You can start with something as simple as an excel file to track income and expenses. However, we would highly encourage you to set up a separate checking account (not co-mingled with a personal account) to receive income and pay expenses. This will make tax time a breeze by providing your accountant with a summary of all cash flow from one source.
Keep in mind long term storage for important documents
Consider using cash accounting instead of accrual accounting
Consider taking advantage of start-up cost deductions
Consider taking advantage of the business property deduction
Consider all available business expenses
Consider the 199A Business Income Deduction
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Disclaimer: Information provided is for educational purposes only. HBWM does not provide tax, legal, compliance, or accounting advice. In considering this material, you should discuss your individual circumstances with professionals in those areas before making any decisions. Further, HBWM makes no warranties with regard to such information, or a result obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information.