Understanding your numbers is understanding your business.
You can be busy all day and still wonder where the money went. Sales are only part of the story. What it costs to do the work, what you keep, and what you'll owe in taxes matter just as much.
Busy is good. Profitable is better.
If you sell a product, how do you know which one earns you the most if you do not know what it costs to make it? If you provide a service, are your prices covering the time and expenses involved? The details differ from one business to another, but the question is the same: what are the numbers telling you?
We work with freelancers, independent contractors, and small-business owners to make sense of the tax side of that picture. We review your income and expenses, ask about changes in the business, and help you understand the result. Your records should give you something useful to work with throughout the year.
What we do for self-employed clients
- Schedule C for sole proprietors and single-member LLCs
- Self-employment tax and estimated payments
- 1099-NEC, 1099-K and platform income
- Home office, vehicle and mileage, equipment purchases
- Your personal Form 1040 and state return, right alongside the business
- Tax planning during the year
- Bookkeeping, so your records are in good shape when it's time to file
Bookkeeping
We offer bookkeeping. We can meet you at your business or on Zoom, take a look at how your books stand today, and help you get your entries and your balance sheet back on track. Whether you're a little behind or starting fresh, we'll help you get to a place where tax time is calm instead of a scramble.
Estimated payments, without the guesswork
When nobody withholds tax from your pay, paying as you go is up to you. We look at what you've earned so far, what you're likely to owe, and help you set payments you can plan around. If your income changes during the year, tell us then, not after the fact.
Let’s look at how your business is set up
The structure you chose when you started may still be right. Or the business may have grown enough that it deserves another look. We want to understand how it is formed, how it is taxed, what work you do, and how much profit it is producing.
Once your profit is steady and meaningful, an S corporation election may be worth a look. It isn't right for everyone, and the answer depends on your numbers. We can run them together, and James can guide you on timing.
What an S corporation election can change
A single-member LLC is generally taxed like a sole proprietorship unless it makes a different tax election. An eligible LLC can elect S corporation treatment and remain an LLC legally. We are reviewing how the business is taxed, rather than assuming you need to start over with a new company.
With sole-proprietor treatment, business net earnings generally are subject to self-employment tax as well as income tax. With S corporation treatment, an owner who works in the business must receive reasonable wages for that work. Those wages are subject to payroll taxes. Remaining profit passed through to the owner generally is not subject to self-employment tax. That is where a potential saving can come from.
The word reasonable matters. You cannot simply call everything a distribution and pay yourself a token salary. We look at the work you perform and what appropriate compensation would be. If most of the profit needs to go toward that pay, the tax saving may be small.
Curious where this leads? Read about business entities: S corporation, partnership and C corporation.
Does the benefit outweigh the extra work?
An S corporation brings payroll, a separate business tax return, and additional administrative costs. State rules and taxes matter too. Owner pay also affects retirement-plan contributions, so the decision needs to fit your broader plans.
We compare the potential savings with those costs and responsibilities. If the election makes sense, we can discuss the requirements and timing. If it does not, there is no reason to add complexity just because someone told you every LLC should be an S corporation.
What we'll ask you for
- Last year's tax return
- Income summary, 1099-NEC, 1099-K and platform reports
- Expense summary or records (receipts, statements)
- Mileage log and vehicle details, if you use a vehicle for the business
- Home office details, if you use a space for the business
- Equipment or large purchases during the year
- Estimated tax payments you made (dates and amounts)
- Wages or contractor payments you paid, if any
- Share everything through Intuit Link or SmartVault, not email. Request your tax organizer.
Plan while you still have choices
Growing revenue, hiring help, buying equipment, or changing the way you pay yourself can affect your taxes. Tell us what you are considering before the year is over. We can look at the tax consequences and help you make a decision with a better grasp of the numbers.
Talk with us about your business or request your tax organizer to start gathering your records.
Questions
Do I need a separate business bank account?
It makes your records much easier to keep clean, and it's a good habit. Whether it's required depends on how the business is set up. Ask us about your situation.
Do you work with side-hustle and gig income?
Yes. Income from platforms, deliveries, freelance work and similar sources goes on Schedule C when it's a business. Tell us where the money comes from and we'll sort out how it's reported.
What is self-employment tax?
It's the Social Security and Medicare tax on net earnings from self-employment, on top of income tax. We estimate it during planning so it doesn't surprise you.
Can you help me decide about an S corporation?
Yes. We weigh the possible tax savings against the extra work and tell you plainly if it's not worth it.
Do you help with bookkeeping?
Yes. We can help you keep your books in good shape through the year so the return is quicker and more accurate.
How do I send my records?
Through Intuit Link or SmartVault, not email.