Welcome To The Personal Blog Of Christopher L. Bower

Hi, I’m Christopher Bower. I created this exciting Internet project along with a very talented team of professionals from the Metro Detroit area and across the United States. Included in this Blog are my personal experiences in professional  marketing, project management and people management along with carefully integrated photography and other creative elements… I hope you enjoy. In addition, this an extension of my current online and offline Michigan-based business known as Detroit Internet Marketing, LLC located in the city of Troy.

16
May
2016
0

Avoid Self-Employment Tax Debt Next Year

Tax season may be the highlight of the year for traditional workers, but for entrepreneurs, this is a season of debt – nothing more. If this is your first year filing self-employment taxes, you may be overwhelmed by the amount of money you’re expected to pay from your income. Nearly every first-time entrepreneur goes through this eye-opening experience, and unfortunately, there is no way to fix that now. With that in mind, there are some steps you can take to avoid self-employment tax debt next year if you start preparing right away. Follow this guide to minimize your costs next tax season.

Save Money In Advance

Ideally, you should save 20-25% of your income for taxes. Self-employment tax rates change from year to year, but they usually hover between 13% and 16% in the United States. Every time you get a check in from a client, put part of it away in a special tax account. Then you will have money available when it comes time to pay your taxes next year.

Pay Quarterly Estimates

Another way to avoid having a huge tax bill at the end of the year is to pay quarterly estimates to the IRS. You essentially fill out a mini-tax return every three months and pay an approximated tax rate based on your earnings. At the end of the year, all you have to worry about is your last quarter’s payment, not an entire year’s worth of tax debt. If you have overpaid when that time comes, the government will issue you a tax refund check that you can use toward next quarter’s taxes.

Keep Receipts For Tax Deductions

Self-employed individuals are at a high risk of getting audited, so you need to make sure that you store all of your financial records for seven years after you file your taxes. It’s also important for you to keep these year by year so you can get as many discounts as possible. Every business expense you have can be taken off your taxable income, including rent payments for an office space or utility bills for any area used in the business. Take advantage of as many tax deductions as possible to reduce your taxable income and your tax debt as a whole.

Find A Good Accountant

While it is entirely possible to file self-employed taxes on your own, the process is much more complicated than filing a standard Form 1040. You may need to file a Schedule SE, Schedule C, and other forms in addition to your Form 1040, depending on the type of business you run. If you are worried about messing something up or missing out on a huge tax break, find a good accountant that works with entrepreneurs and small businesses. The money you pay for accounting advice will be covered by your potential savings.

16
May
2016
0

The Shift From Freelance To Full Time Entrepreneur: Part 1

Many successful entrepreneurs get their start doing side gigs. A programmer might pick up a few spare coding jobs throughout the month, or a window cleaner might work on houses on the weekends. If you are considering turning your hobby into a career, you’ll need to take the right steps to properly transition into your new lifestyle. The guide below explains how to shift from freelance to full time entrepreneur with minimal mistakes.

Don’t Quit Your Day Job Cold Turkey

A lot of new entrepreneurs make the mistake of quitting their job right away to pursue their passions full time. This may seem like a good idea because it marks “complete commitment,” but it’s usually a recipe for disaster. Here’s why…

  • You may need to go back to your old job if the new adventure doesn’t work out. Why burn bridges that you might cross again?
  • You need to have money put away to make a successful transition. (See the next section for more details)
  • You may not have enough work in your new business to keep yourself busy.
  • You cannot rely on “hope” to get you through the shift.
  • Unfortunately, you may be in over your head.

The fact of the matter is that there are no guarantees when you become a full time entrepreneur. Even if you have a solid business plan and take all the necessary precautions, you’re still at risk of not succeeding. Try shifting into part time employment with your current job before you quit altogether. This should free up your time without removing your safety net.

Get Some Money Saved

It will probably take you a while to build up a strong client list, so make sure you have money put away to cover your bills for a few months. This money may also be used to fuel the growth of your new business, if you get it moving fairly quickly. Don’t just assume that you will make a ton of money right from the start. Some businesses take months or even years to reach a breakeven point before they are able to really see profits.

Research Job Stability In Advance

Are you entering a market with a positive future, or are you setting yourself up for failure? Do some solid market research before you commit to working full time so you don’t end up with your tail between your legs. Even if your job is lucrative right now, the money you earn won’t mean anything if it’s not consistent. Determine how much of a demand there is for your new business before you settle into it.

Continue to Part 2