You started your business because you were passionate about your idea, or because you saw a hole in the market that you could fill, or because you want to change the world. (Hey, I’m not judging!) That’s pretty freaking awesome, but…there’s more to running a business than just executing your idea. That’s why I’m here with this post to talk about how I set up my business finances!
It’s a topic that most of us happily avoid discussing, but like them or not, they’re a reality. When you’re employed by a business, you know that you have taxes withheld from your paychecks. Depending on your state, federal, state, and/or city taxes are withheld. You file the W-2 form, and the accounting team with your employer takes care of those withholdings for you.
But what about when you’re self-employed?
I’m going to jump right into the nitty gritty on this one, because it’s on my mind and because I had to deal with it recently while I was doing work for one of my clients. Let me give you a bit of backstory:
For some of my wonderful clients, I provide the service of searching for copyright violations of their Teachers Pay Teachers products and then sending cease-and-desist emails to the violators on their behalf. This is a process that sometimes gets a bit involved, and I’ve even had to work with one of my clients’ lawyers for violators who weren’t responding to (or even opening) my many emails. When I most recently logged into my client’s “legal” email account (A.K.A. I made a Gmail account called legal.myclientsbusinessname for this purpose), I saw the following response from someone I’d emailed about her school’s website having posted one of my client’s Teachers Pay Teachers products: