Ready to level up your business game? In this week’s Independent Money Newsletter, you'll discover the essentials for choosing the right business structure, forming your business, managing your finances, and simplifying those pesky quarterly taxes.

Let’s dive in! 🏊‍♂️

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A simple guide to becoming your own CFO

Are you a gig worker, creator, business owner, or side hustler? As an independent worker, you don't have the luxury of relying on a CFO's guidance. Which is why we’re going over the “basic need to know” around business formation, bookkeeping, and taxes.

Choosing the Right Business Structure

When starting out, a sole proprietorship may be the simplest structure. Adding an LLC can provide additional protection without complicating your bookkeeping or taxes. For partnerships or S-Corps, expect more complex tax returns and associated costs. For more on the pros and cons of operating your business as an S-Corp, read here.

Setting Up a Sole Proprietorship or an LLC

A sole proprietorship starts as soon as you decide to treat your business seriously, often without any IRS filings. However, state requirements can vary, so check local regulations. LLCs require state filings and fees, such as California's $800 annual fee.

For more, here’s an in-depth explanation of the pros and cons of operating your business as an LLC vs a Sole Proprietorship.

Deciding When to Hire a Bookkeeper

Hiring a bookkeeper can be beneficial if you’re not comfortable managing your own books. It can free up your time for other business activities and help avoid costly mistakes. If it’s financially feasible, many find it worthwhile to outsource their bookkeeping.

Tools, Software, and Apps for Financial Management

Using a bookkeeping solution, even a simple spreadsheet, can be helpful. Popular tools include Google Docs for easy sharing, and software like QuickBooks Online, and Xero for comprehensive features and accountant access. Carry is an all-in-one platform for tax-advantaged accounts, investments, and strategies. If you have $200k+ in net annual income, Carry VIP is a done-for-you tax service.

Organizing Your Financial Records

Start by organizing your receipts—both physical and email. Regularly categorize transactions yourself or in your bookkeeping software to simplify monthly reconciliations, ensuring they match your bank statements. Keeping receipts will help prove any business expense was used for business proposes come tax and deduction time!

Understanding Quarterly Taxes

Being a business owner means handling taxes differently than employees do. Employees have taxes deducted from their paychecks throughout the year, adjusted based on their expected annual tax bill. Come tax season, they either pay any remaining taxes owed or get a refund if they overpaid.

On the other hand, business owners typically estimate and pay taxes quarterly. These estimates depend on their earnings or projected income for each three-month period. Missing these quarterly deadlines can lead to hefty costs, as penalties and interest rise with the amount owed and the delay in payment.

Mastering the essentials of business formation, bookkeeping, and taxes is key for gig workers, creators, and business owners alike. Stay organized and informed to navigate these responsibilities smoothly, freeing up more time to focus on what matters most—building and growing your business with confidence.

As always, be sure to consult with a financial or tax advisor to see what’s the best fit for your situation!

What’s Happening at Carry?

Here’s what you can expect in the coming weeks

See the full list of events here. ⏰

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If you want more resources on building wealth as a solopreneur/entrepreneur, check these out:

• The Solo 401k handbook 

• The Roth IRA handbook

• The Self-Directed IRA handbook 

• The Guide to Paying Less in Taxes

• What is a Solo 401k?

• How to Open a Solo 401k