 This was the year! You took the bold step of making your side hustle your day job. You had a decent year; you may not want to live on the income you made for very long, but you made it. Pat yourself on the back, raise a glass—you are a bonafide entrepreneur. Welcome to the club! That was yesterday; then you filed your taxes. I remember this day well... "I have to pay what!?" If you have been an employee all your life, you likely have grown to expect a tax return, not to have to return your hard-earned money to the government. You may have even expected to pay a certain sum—after all, everyone has to pay taxes—but hoped that your other deductions would offset enough that it wouldn't hurt too much. We can't help it; not everything in our minds makes the switch from employee to business owner in one, or even a few years. Don't give up. It may feel like there is no point in owning a business if it will always be an uphill battle to get ahead. Here's the thing: that is not how it has to be, and you have choices to solve this problem now. So often, I see entrepreneurs fail to thrive because they think they have only two options: to succeed or fail. There are always more than two choices; you just have to stop, think, strategize, and decide. Stop Stop all the doomsday scenarios running through your brain, showing how you will not make it because you're ruined, and allow your mind to be open to the possibility that there is not just one way but many around this. Think Think differently. As any life coach will tell you, change your mindset, and you change your life. It goes something like this... Everyone has to pay taxes, and so do I. If I didn't know how much more I would have to pay as a sole proprietor or small business owner, now I do. Lesson learned. Now is a good time to hire an accountant for next year so I can plan ahead. This is a sign of my success. I rocked the shit out of this year! I just need to get over this hump, and I will be on my way. Strategize Now that your mind is in a better place, it is time to figure out how you will pay this year's tax bill while still growing your business. I highly recommend hiring a financial planner. Most small business owners think they can't afford one, but this simply isn't true. There are two business professionals you can not afford NOT to hire: an accountant and a financial planner. They both can save you more money than you will ever pay them by educating you on deductions, tax savings, and damn good ideas that you're in the wrong industry to come up with yourself. Don't settle for the first one you google; interview and ask questions to ensure they can see things with a big-picture strategy and that your best interest is at heart. (The following brainstorming example is not intended to replace a financial professional's advice or your own good sense. Only you and the professional you choose to entrust the knowledge with know your financial situation and how these ideas would impact the overall picture.) Do you have resources of which you are unaware? What about:
Part of your plan should be how you will also pay next year's taxes. Hiring an accountant to project your quarterly taxes and show you how to pay them can be part of your immediate strategy for paying your taxes now. Decide There are more solutions to consider, and it may take employing many ideas to make it work. But you do not have to choose to quit. If you decide NOT to quit, then more decisions must be made to move forward. The important thing is to move. Happy Tax Day! You Earned It! Pat yourself on the back, raise a glass—you are a bonafide entrepreneur. Welcome to the club! Rebecca Garza is a Start-up, Business, and Marketing Consultant who helps small businesses build a brand presence and grow.
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