After You Have Started, Fine Tuning Your Business

1) Tax deductions that you may not have though of:

- Examples of items that you world deduct as an employee that are also deductible for work as an independent.

Expenses in maintaining or acquiring professional licenses, uniforms, work shoes, CEU's, education, dues, journals, books, professional memberships etc.

- Examples of items that become deductible as an independent

Mileage to and from the work site, meals, home office, bank fees, credit interest, benefits, health insurance etc

2) Paying your estimated taxes

As mentioned previously, you should set aside a minimum of 35% of each check to pay estimated taxes. You will need to make quarterly payments to the taxing authorities that you are liable for. The IRS has an online payment system called  EFTPS . Many states have online payment services (Click here for a link to state tax offices). Calculating the amount of estimated taxes to pay each quarter can be time consuming. To our current clients, TravelTax offers a Estimated Tax Service for only 50$ annually. Click here for more information on this program. This will open a second browser window.

3) Self Directed Benefits

If you plan on working as a contractor for a substantial amount of time, you will want to consider a tax advantage approach to approach health insurance and retirement. Depending on your particular situation, some plans may require an incorporation of your business. See our page on health insurance or retirement plans for more information.

4) Incorporation

While incorporation does not shield you from personal acts of malpractice it does separate your business debts and liability for any employees or those representing you, Incorporation provides better benefits options and tax savings. As a corporation, you may be considered an "agency" which in some cases would require JACHO certification.

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