Step #16 Check Irs Requirements

If you comply with basic IRS guidelines, you can deduct a percentage of normal household expenses (mortgage, interest, taxes, insurance, utilities, repairs, etc.) as a business expense. see the box accompanying this article and, for more detailed information, IRS publication #587, Business Use of the Home.

Also become familiar with these IRS forms: Schedule SE (compensation of Social Security Self-Employment Tax) and Schedule 1040 ES (estimated Tax for Individuals). Depending on circumstances, you may have to file them.

Step #17 Outfit The Business

Make a list of everything needed to start the business, but before you buy anything, look around the house for things you already own that are usable.

When you are ready to start purchasing, check the classified ads and garage sales. Both are good, inexpensive sources for office furniture, typewriters, computers, answering machines, etc. But only what is absolutely necessary for start-up, and wait until the business is off the ground to get the extras.

Step #18 Decide On Telephone Requirements

Call the telephone company to find out the cost of a business phone in your area. If you cannot afford a separate business line, investigate the telephone company’s regulations on using your personal phone in a business. Keep a record of long distance business calls as they are a deductible expense. Finally, consider the benefits of an answering machine to catch calls when you are out.

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Step #13 Select Business Cards, Stationery, Brochures

Spend time on the color, design and paper for these items. If you are not certain what is most suitable and effective, consult a graphics designer or a creative printer whose work you like.

Step #14 Open A Business Checking Account

Call several banks to find out what services they offer, and what minimum balance, if any, must be maintained to avoid paying a service charge. Also ask about credit card if you plan to offer this convenience to your customers. Bank fees can be significant, so shop around for the best deal.

If your personal checking account is with a credit union, see if it can also provide a separate business account. when you open your account, you may need to show the assumed name certificate and business license.

Finally, investigate obtaining a credit card in the business’s name. If this is not possible, set aside a personal credit card to use for business expenses.

Step #15 Set Up Record-Keeping Systems

Put together a simple and effective bookkeeping system with an 81/2 x 11″ three-ring binder, columnar pad sheets and twelve pocket dividers from the office supply store. For each month, set up columnar sheets for income and expenses. Use a pocket divider for each month’s receipts, bank statement, deposit tickets, and canceled checks.

In addition, an automobile log for business mileage, and filing system for correspondence, invoices, supplier catalogs, client records, etc. are two other useful tools.

For more information on record-keeping, see IRS publication #583, Information for Business tax payers.

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