As if starting a business wasn’t scary enough, throw in all the legal bullshit you need to know and it can make you want to run! BUT, have no fear – it isn’t as scary as you may think, I promise!!
I am in no way shape or form a lawyer and anything I write on this blog is just from personal experience and my own opinions. Before making any legal decisions you should contact your lawyer.
1. Separate Your Business Expenses From Your Personal Expenses ASAP
I once had a tax guy tell me the three ways to piss the IRS off was to lie/cheat about your taxes, ignore the IRS when they send you a letter, and not separate your personal and business funds. The sooner you can separate everything and be reallllllllly honest and clear about what’s business and what’s personal, the better.
2. ALWAYS Have A Contract
I don’t care if you have to go without your iced latte for 2 months because you have to pay a lawyer for a solid contract, do it. You will save your ass so much money (and heartache and stress and all the things) in the long run by covering it from the start. Even if you are just doing a sponsored post for a company, get everything in writing before you do anything OR accept any payment. If you accept payment before a contract is signed then the contract doesn’t count!
3. Investing In a Tax Person and Bookkeeper is Money Well Spent!
Don’t try to do that shit on your own, especially if you are making decent money. It will cost you anywhere from $500-$2000 for the ENTIRE year and it’s so much easier than doing it yourself. And to top it all off, they will also save you a lot more money than if you just tried to figure it out all alone!
4. Register Your Business ASAP
I see so many boss babes skipping this important step more than I’d like to admit. Not only is it super illegal to run a business without reporting it to the IRS, but I’ve found you take your business so much more serious when it’s legit. Think of it like dating vs. marriage. Not that dating isn’t legit, but marriage is so much more official. Your more committed because the bond is solid. Do yourself a favor and register your business. If you need help, I always recommend legal zoom it is my jam.
5. Put Your Tax Money In A Separate Account and DON’T TOUCH IT!
Depending on where you live and how your business is registered, you’ll have to put away different amounts and your tax guy can help you out with that! For our business, we have to put away 30% off the top of every single payment we receive. We have a system set up to where it automatically takes it out of our business account and puts it in a separate account that is to be paid at the end of our tax year. Do yourself a favor and don’t cut corners on this. Nothing is worse than to owe a bunch of money to the government that you don’t have. Be responsible and put that shit away. And if you feel your not making enough, set your price and then add tax. You deserve to be paid what you want. So raise your price to match your worth.