Avoiding Common Tax Mistakes

This article from CNET discusses common mistakes that attract IRS scrutiny and offers tips to avoid them, such as completing your return accurately and reporting income correctly, as failing to do so can lead to audits or delays. It also emphasizes the importance of meticulous record-keeping, especially for self-employed individuals claiming deductions, and being cautious with charitable deductions to avoid raising red flags with the IRS.

Advantages of Setting Up a Business Checking Account

If you are a busy entrepreneur, you may think that dumping all your earnings and expenses into an existing account will save you time and hassle. According to this article from CNBC, for smoother tax filing and better money management, it’s smart for small business owners to keep personal and business finances separate by having different checking accounts. This not only makes tax time easier but also comes with perks like a business debit card, loan and grant opportunities, and extra benefits from business checking accounts, making it a good move for businesses of any size. See the link for more details!

As an Entrepreneur, Are You Paying Yourself Correctly?

Many entrepreneurs, especially women, face challenges in paying themselves fair salaries, contributing to a gender pay gap in entrepreneurship. Despite efforts to address this issue, a survey reveals that female entrepreneurs, on average, earn 28% less than their male counterparts, emphasizing the need for business owners to ensure profitability and strategic financial planning to afford fair compensation for their work.

To read more about this, see this post by Abigail Ingram, executive director of the Polsky Exchange,  a 34,000-square-foot incubator space that leads the University of Chicago’s Polsky Center engagement with the South Side community through programs and initiatives that support local business owners and entrepreneurs.

Applying for a Small Business Loan

This post from CNN Underscored is a helpful piece that discusses the steps small business owners can take to secure funding through loans. It highlights the importance of determining the type of loan that best suits the business’s needs, considering factors such as the required amount, purpose of funds, and the business’s size. The article suggests comparing lenders, including traditional banks, online lenders, and microlenders, based on factors like interest rates, fees, loan terms, and funding speed. It also emphasizes the importance of gathering necessary documents, submitting a comprehensive loan application, and reviewing the loan agreement before finalizing the funding process. It is a grate reference piece if you are looking to use loans as a source of capital to grow your business.

Embracing Your Scrappy Side

A recent article in TechCrunch discussed the challenges faced by female founders in the startup journey, emphasizing the need for a different approach to fundraising. The author, Andrea Sommer, shares her experience co-founding Hive Founders, a global network and accelerator for women entrepreneurs, highlighting the importance of collaboration, adaptability, and well-roundedness for women seeking investment. She also addresses the unique challenges women face in fundraising, such as different behavioral patterns from investors, and emphasizes the importance of building genuine relationships with investors. Sommer advocates for female founders to embrace their scrappy side, be disciplined with resources, and seek guidance from other women who have successfully navigated the fundraising process.

5 Credit Pitfalls to Avoid as a Small Business

In this article in Entrepreneur, five common pitfalls that small businesses should avoid when establishing business credit are highlighted. These include not regularly monitoring business credit scores, using outdated or inaccurate business information, paying business expenses with personal accounts, choosing the wrong business structure, and using vendors that don’t report trade credit. By addressing these issues, small businesses can build a strong credit foundation essential for accessing funding, fostering growth, and building partnerships.

Avoid These Pitfalls If You Are A Small Business Owner

This post from LegalZoom which was recently updated in September 2023 highlights the top ten mistakes made by new business owners. The list includes:

  1. Not having a business plan
  2. Not having a marketing plan
  3. Impatience
  4. Overspending
  5. Underpricing
  6. Not forming the right business entity
  7. Thinking you don’t need insurance
  8. Not having a written agreement with your business partners
  9. Failing to protect intellectual property
  10. Thinking you can do it all yourself

Check out the link to read more detail about what to do if you think you are falling short in that area as the post goes into depth on each item in the list.

What You Need To Know if You Use Venmo or Paypal for Business Payments

Lawmakers are debating changes to tax reporting for business transactions on payment apps like Venmo and PayPal, as well as e-commerce platforms such as eBay, Etsy, and Poshmark. The American Rescue Plan Act of 2021 lowered the threshold for Form 1099-K, which reports third-party business payments. Previously, individuals received this form if they had over 200 transactions totaling more than $20,000. Now, the threshold is just $600, causing concern that many taxpayers might mistakenly receive a 1099-K, even for small, one-time sales. Bipartisan efforts are underway to raise the reporting threshold back to 2022 levels, with some proposals suggesting an increase to $10,000. If you are a small business that receives revenue via these payment apps, it’s essential for to stay organized and be prepared for tax reporting. Read more about the issue in this article posted on CNBC.

Where Should Small Businesses Keep Their Cash?

After three recent failures of medium-sized banks, many small business owners are worried about the safety of their money. According to this article from Investopedia, experts recommend diversifying deposits across multiple institutions to stay within the $250,000 FDIC limit. In addition, small businesses may want to approach credit unions and small banks as they may offer better terms. Check out the article for more thoughts on the topic.