At some point in life, nearly everyone daydreams about being their own boss, making their own schedule, and living a life of independence and fulfillment. However, only a brave few decide to turn their side income or passion into a full-time job by becoming self-employed. Although self-employment certainly brings benefits like the ones listed above, there are also many challenges that accompany this type of employment.
If you are considering becoming self-employed in 2018, here are three things you should know prior to making your leap.
It’s important to speak with a tax professional
One major aspect of self-employment that you must not overlook is the new way in which you will need to file your taxes. Experts at Corporate Business Solutions emphasize the importance of having proper tax planning, as it can eliminate the risk of headaches down the road. Not only will you not have your taxes automatically deducted as you have in your current job, but there are new deductions, forms, and rules to be aware of. In order to make the process run smoothly, it is best to speak with a tax professional as you transition into self-employment.
Now is the time to get your finances in order
Rather than handling your personal and business expenses from one account, create separate credit cards, checking accounts, and savings accounts for your business expenses. Why? Maintaining separate accounts allows you to effortlessly track purchases for your business. This is especially helpful when it is time to file your taxes, since a dedicated business account will save you hours of combing through one account for potential deductions. Additionally, take this time to pay off any outstanding debts, build up your savings, and create a cash flow plan. Since self-employment usually means irregular pay and a reduction in salary at the start, having your finances in top shape is key to staying prepared.
Seek legal advice
Whether you’re starting a blog, an online store, or a landscaping company, there are associated legal rules which must be followed. How are you supposed to know what laws and regulations apply to your work? Seeking legal advice (especially if you plan to run a small business) from an appropriate legal professional is key in avoiding costly and stressful legal mistakes.
Successfully create your path to self-employment in 2018
While there is a significant amount to learn prior to becoming self-employed, it shouldn’t discourage you from starting on your new journey. In addition to the responsibilities of freelancers, business owners, and other self-employed individuals, there are numerous advantages not offered with traditional employment. Make 2018 your year to finally step out and make your dreams of being your own boss a reality.