2013 Accounting Tip #8

There are many ways to get organized for taxes. Each person needs to find the way that works for them to ensure that they will stay consistent and current. We will provide you some tips at getting started, you may even find a tip that you like better than your current way of doing things.

Make sure you pay yourself a living wage.  Many business owners are just trying to get their gig off the ground.  In doing so, their focus is on creating sales and running the day-to-day operation without having a plan on what they are going to pay themselves.  Don’t buy into the myth that all owners make a large salary from the get go.  Remember that as your business grows you will likely achieve a higher rate of pay, but this is not always true.  Many business owners consequently just draw out money whenever they feel like it or need it to not have their personal checking account bounce.  Don’t do this.  Have a plan.  Decide in advance how much of a draw you need to make a living and pay your personal expenses.  Once you have determined what is a decent wage for yourself, schedule this draw on a regular basis realizing that it may not be a wage that you want it to be, and may have to be adjusted as you work at building your business.  Make sure you follow the tax strategy for paying yourself depending on if you are a Sole Proprietor, S-Corp, C-Corp or LLC.  Seek the advice of a Tax Professional if you need additional input.


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