Viking Magazine - February 2022 - 11

SNAPSHOT
HOW MANY SMALL BUSINESSES ARE THERE IN THE U.S.?
There are 32,540,953 small businesses-defined as having fewer than
500 employees-in the U.S. Of that number:
have tax-deferred options to save for
the future. With your CPA, discuss
the various 401(k) and individual
retirement account (IRA) choices
available to you.
81%
or 26,485,532
businesses,
have no
employees,
also called
" nonemployer
firms "
SOURCE: U.S. SMALL BUSINESS ADMINSTRATION OFFICE
LEGITIMIZE YOUR BUSINESS. While
formally registering your business as an
entity isn't always necessary depending
on your line of work, opening up shop
as a limited liability company (LLC)
or S corporation, for example, has
its benefits: your personal assets are
protected should you ever be sued,
you get tax breaks and it gives your
company a credibility boost in the eyes
of potential clients. The designation
also allows you to apply for an
employer identific tion number (EIN)
with the Internal Revenue Service
(IRS), which is crucial for the next step.
SEPARATE PERSONAL AND BUSINESS
EXPENSES. You may think it's easier
to track all expenses using one card
linked to one bank account, but that
spells disaster come tax time when
you have to comb through statements
to decipher which purchases were
personal and which were professional
a year after the fact. Once you've been
granted an EIN, open a separate bank
account solely for your business. Apply
for a business credit card while you're
at it, too.
HIRE AN ACCOUNTANT. No matter
how long you've been managing your
personal finance , business accounting
@sonsofnorway
is a whole new world. A finance
professional like a certifi d public
accountant (CPA) will be able to
help you manage the money coming
in through your business, plan
for retirement, maximize your tax
credits and keep records in case
you're audited. A CPA's hourly fee
may seem steep, but they'll save you
money in the long run.
TRACK AND MONITOR YOUR MONEY.
You don't need to be an accounting
expert to run a small business,
especially if you've hired a CPA,
but it's still necessary to keep
track of the money coming into
and leaving your business bank
accounts. Bookkeeping software like
QuickBooks, Wave and FreshBooks
all offer features like automatic bill
pay, invoicing, inventory tracking
and monthly finan ial statements.
SET UP A RETIREMENT ACCOUNT.
Don't let self-employment derail
your retirement goals. Just like
employer-sponsored retirement
plans, small business owners also
or 6, 19%
055,421
businesses,
have paid
employees
PAY QUARTERLY TAXES. When you
become self-employed, taxes are
no longer withheld from your
paychecks. Translation: you're
on your own when it comes to
paying taxes. Rather than dishing
out one lump sum every April 15,
however, businesses are required
to pay quarterly taxes, or estimated
taxes, in January, April, June and
September. To avoid owing a large
chunk of change when you file
for the year, a good rule of thumb
is to dedicate 30% of your earnings
to taxes.
When you're
self-employed, a good
rule of thumb is to
dedicate 30% of your
earnings to taxes.
DON'T FORGET ABOUT INSURANCE.
Your new title of " entrepreneur "
doesn't automatically come with a
benefits package, so it's on you to
research and shop around for health
insurance coverage in the national
or state marketplace (that is, if you
aren't able to hop on a spouse's
policy). Additionally, if you are
starting a business with a partner,
consider covering them with a life
insurance policy (and vice versa) that
would protect your business should
they unexpectedly pass away. ▼
Sons of Norway, 1455 West Lake Street, Minneapolis, MN, offers financial products, but not all
products are available in all states. Products issued by Sons of Norway are available to applicants who
meet membership, insurability and residency requirements.
February 2022
11

Viking Magazine - February 2022

Table of Contents for the Digital Edition of Viking Magazine - February 2022