Your official back-to-business syllabus
Can you believe it's already back-to-school season?! Parents, say it with me, WOOOOHOOOO!!! Kidding, kinda.
But there's something about August that feels like one of the last fresh starts you get for the rest of the year… all the stores start to put out their fall decor (before Labor Day, wth?!), the marketers remind you to start planning for your Black Friday promos, and I remind you that you've got an estimated tax payment due next month (9/15).
And on the topic of fresh starts, I want you to do something that's going to give you the ~ultimate~ fresh start next year as long as you lay this groundwork now. Yeah, I'm talking contractor compliance!
The January task that everyone loves to hate (yep, 1099s) doesn't actually have to be that bad if you have a system to keep up with your contractors when you onboard them and pay them throughout the year.
So, if you've paid someone this year to provide contractor labor to your business (like a VA, OBM, social media manager, contractor, etc.), it's time to audit their contractor file!
Here's everything you should have for each contractor:
Signed Contractor Agreement
Completed Form W-9
Contractor vs. Employee Status: Confirmation (and documented evidence) that this person should be treated as a contractor instead of being treated as an employee.
Amount Paid: Your bookkeeping system should be set up to track payments by contractor, then you can easily see your total payments to each contractor at the end of the year.
Standard Payment Method: Ideally, you'll pay all your contractors using the same method (preferably ACH, payroll provider, check, etc.)
Contractors aren’t the only people who should be getting paid by your business; you’ve got to make sure you’re getting your money too!
The only problem is, depending on how your business is set up, that might mean transferring money to your personal bank account, running payroll (and setting a reasonable salary), taking distributions, or getting guaranteed payments. The method matters when it comes to paying yourself!
If you’re not sure how much you can afford to pay yourself or how to pay yourself in the most tax-efficient manner, I can help!
I’m taking on 2 new clients in August. Email me I’ll send you all the details to secure your spot on my client roster!
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