As you check out the various programs that you can purchase to increase the ease of business management, you may assume from the Office Auto Pilot platform reviews that these software programs can take care of everything. While they can take care of a number of tasks, the actual running of your business in the eyes of the law and the government requires significantly more management. Whether you choose to form a sole proprietorship or develop a corporation or an LLC, you need to make sure that you keep up with all of the necessary business tasks so that you don’t run the risk of bankrupting your business with punitive damages and excess fees.
Set Up a Separate Business Account
If you check out the Office Auto Pilot platform reviews, you’ll see that this program like a number of others assists with purchasing and checkout functions for your website. What you might not realize though is that as a business you must have a separate business account. The money you obtain from your business should not be transferred into your own personal account if you are running a legitimate business. Hobby or side businesses can get away with this sometimes, but to be on the safe side you should always establish a separate business account.
The business account must only be used for business matters. When you need money, you should pay yourself from the business account, but you should not pay your personal bills directly from this account. Doing so decreases your professionalism in the eyes of the law, and it may cause the government to see you as a hobby or side business rather than a legitimate business that receives tax deductions and other business benefits.
Save Copies of All Business Related Transactions
According to the IRS, you must save copies of all receipts for business related transactions if they exceed $75. The tax experts on Entrepreneur.com recommend saving all business related receipts. In case of an audit, you need to be able to demonstrate where all of the money went, and it can help if you scanned and saved all of the receipts for business expenses, especially if you claim them as a deduction. Make sure that you do this for all reoccurring expenses as well. If, for instance, you review Office Auto Pilot and decide you want to purchase a monthly subscription, you need to save the PayPal receipt and the monthly bills that you receive so that you can claim it as a deduction.
Maintain Copies of Utility Bills, Taxes, and the Like for Tax Purposes
In general, it’s safe to discard utility bills within a year of the payment. But when you decide to claim some of your utility expenses as home office deductions or your office utility bills as business deductions, you need to maintain those copies for at least three years. The IRS does state that if there are any irregularities with your taxes or you have inappropriately filed a deduction that does not apply, then you may be responsible for maintaining copies of those bills and your taxes for seven years to the end of your life, depending on the nature of the offense.
In general, it’s best to just scan copies of your utility bills, taxes and everything else so that you have it on hand for tax purposes. The government does not require actual hardcopies for any of this information so long as it is accurate.
Select Controlling State Law
When you start your business, you must select controlling state law. In fact, on your information product website you should have the page that includes the legal notices. Within the legal notices, you must state which state’s law controls in any disputes that may come up. Failure to do so means that the plaintiff can choose from a number of potential forums to sue you, and most of the time the plaintiff will choose to sue you in his own hometown. It’s standard operating policy for businesses, whether online or off, to include a statement of the law that will control in case of any disputes that arise out of their services.
If you review the Office Auto Pilot terms and conditions when you sign on for their services, you’ll see that they like just about every other business out there state which laws will control. We have also reviewed Office Auto Pilot and found out how it compares and rates against its competitors. Read more about it here: http://online-training-guide.com/compare/office-auto-pilot-review/. You can figure out from this office auto pilot platform review whether it is worth your time or not.
Follow the Formalities for Your Business Form
Running and information development business can seem rather informal. Even if you get dressed formally for the online lessons that you present on the various online training platforms, you have significant freedom. But state laws require adherence to the particular business form formalities. Remember that the more protections you receive from your business form, the more formalities you must observe.
To learn the specific requirements in your state, go to your state government small business administration sub site. If your state government’s website does not have this information, then contact your local courthouse. They should be able to provide you with a copy of the applicable laws and regulations. Remember that you are responsible not only for its state formalities but local formalities as well. The local formalities are generally found in the local courthouse. The clerk’s office should have this information.
Set Aside Tax Money Right Away
According to Business Insider, one of the biggest reasons that businesses become undercapitalized comes from a failure to set aside tax money as soon as payments come in. When your work involves developing an information product series including online courses and eBooks etc., it’s easy to funnel the money right back into benefiting your business. However, the government always wants its share.
Unless you have formally incorporated or chosen another particular business form, self-employment tax typically applies to entrepreneurial businesses like information product developers. The total tax you must save will include both federal and state taxes and vary based on the tax bracket you are in. As a general rule, you should set aside between 20 and 25% of all your earnings. To avoid the temptation to spend this money, set it aside in a separate bank account. It helps to set up to bank accounts for your business. Checking account should be set up for all business transactions and receipts, and a savings account should be set up to hold the tax money until it’s time to make the payments. Never keep the tax money in the same account as your business funds. The risk of accidentally spending that is far too great.
After you’ve been in business for a couple years, you’ll be able to gain enough information for your estimated quarterly taxes. Don’t make the mistake of thinking that the estimated quarterly taxes are all that you will owe. The estimated quarterly taxes simply provide an approximation of what you think you will owe by the end of the calendar year. The calculations are made from your previous years in business. If you start to have a more profitable year than you anticipated, start taking out the extra money right away. But don’t pay less in your estimated quarterly taxes if the year becomes slower. The government will find you if you do not pay the full amount that you specified in your estimated quarterly taxes. If you overpay, the government will reimburse you at tax time.