Covering Your Financial Bases: Tips for the Self Employed

Nov 18

Being your own boss can be a very exciting and liberating thing. You get to set your own hours and call the shots, but these are just a couple of the many perks available to the person who takes the leap into this self made world.

Among the freedom of setting your own schedule, you get to have complete creative license to paint the office a certain color, take the business a different direction, work from home today, or work from the front porch of your vacation house in Maui tomorrow.

The perks of being self employed go on and on. However, don’t be fooled into thinking that being your own boss is all sunshine, rainbows and walks on the beach. With this new found responsibility, there are things that need to be done that you were probably not aware of when you were part of the “union covered haze” of the “employed by corporation”.

Here are some tips for covering your bases in the BYOB (Be Your Own Boss) world.

Set Up A Business Bank Account

In your discovery and exploration of this unfamiliar territory, it’s crucial to you to set up a bank account that is separate from your personal account. You need to keep your personal affairs separate from all business dealings.

You definitely want to safeguard yourself from any liabilities, whether that be by state or federal means. You’ll be taken far more seriously if you set up a business account, plus, when the IRS comes knocking, you’ll have nothing to hide and nothing to worry about.

Get Yourself Insured

Insurance is something that gets tricky and can quite frankly be very stressful. It was so nice that being employed under the corporate umbrella full time meant that you got benefits,  but now it’s all up to you. It’s all about finding the right carriers, and it’s of the utmost importance that you and your family is kept insured.

To make the process less stressful, try going through a place that will take care of all insurance related things for you; including dental, medical, and life insurance.

Claim Your Tax Credits and Benefits

As a self employed business owner, you’ll want to save money wherever possible. There are numerous expenses that pop up upon start up and you don’t want to be responsible to pay all of those out of pocket. This is what can kill a start up business.

Do your research on what benefits and tax credits you may qualify for. Consider hiring an experienced consultant to ensure that you’re getting the most out of your situation. You may be able to write off that roll of paper towels you had to buy for the office.

All in all, these are a few suggestions to keep you financial grounded when transitioning to the self employed world. Congratulations on your new venture.