Back when you first started your business you took the painstaking time to set a plan in place to ensure your business would run well. You crossed every T and dotted every I, making sure you had everything you needed to cover the running of your business. Even the best laid plans sometimes hit obstacles. One obstacle you may hit affects the finances of your business. It is called forgotten expenses.
Here are 5 forgotten, but still crucial expenses, which should be considered when determining the finances of your business:
Self-Employment Taxes – Unlike when you worked for someone else, as your own boss you are responsible for paying the self-employed version of FICA (Federal Insurance Contributions Act) tax known as SECA (Self-Employed Contributions Act) tax. SECA covers your contribution for Social Security and Medicare. For 2012, the Social Security contribution should be 10.4% for the first $110,100 of earnings. You do not have to pay the 10.4% for earnings over that (from self-employment. another job or both). The Medicare contribution for 2012 is 2.9% regardless of the amount earned in a given year. Although the amounts owed can be offset by income tax provisions, estimated quarterly taxes should be filed. If you do not file your Self-Employment Tax in this manner you may be subject to paying underpayment penalties when you file your taxes next year. Any questions regarding Self-Employment taxes due should be discussed with an accountant.
Cell Phone Service – This may seem like a petty expense but if not watched it can balloon into a major expense. If you do not have the right plan in place you can deal with overages that could go in to the hundreds each month. Make sure the plan you pick covers e-mail, text and internet services. It should also contain enough minutes to cover the majority of calls you plan on making/receiving.
Professional Fees – Having an accountant in place will allow you to have any financial questions answered in a timely manner. It will also ensure that any tax questions that may come up will be dealt with and that your taxes will be properly prepared. Depending on the type of business you have, having a lawyer knowledgeable in that field would also be beneficial.
Association Fees – Whether it’s joining an industry specific trade group or your local Chamber of Commerce, this is an outlet for getting potential clients. Since these can cost hundreds of dollars to join and there is no guarantee on what you might get out of them, due diligence should be done in choosing which ones you might join.
License, Permits and Fees – Does your profession require a license to do the job? Does the city/town you are located in require a permit to be in business? These are questions that need to be answered prior to you opening the doors of your business.
As a buffer you should always have at least an additional 20% set aside in your budget to cover unforeseen expenses. It is better to have a little more set aside just in case rather then have to close the doors of your business because you do not have the funds to run it.
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