The first week of May is National Small Business Week!

National Small Business Week recognizes the critical contributions of entrepreneurs and small business owners. We're celebrating by sharing some of our most valuable tax tips for self-employed/small business owners:

• Make Estimated Tax Payments throughout the year if you don't have taxes withheld and paid from your paycheck. Income tax is a pay-as-you-go tax and most people have tax withheld by their payroll provider. If you're a small business owner, you may not have that luxury! Making estimated tax payments (also known as quarterly tax payments) to both the IRS and State will prevent them from charging the penalty for underpaying estimated tax payments, and also may be easier to budget throughout the year instead of paying a large bill at tax time.
• Understand how to classify the people who do work for you as either employees or contractors. An employee is generally considered anyone who performs services, if the business can control what will be done and how it will be done. What matters is that the business has the right to control the details of how the worker's services are performed. Independent contractors are normally people in an independent trade, business or profession in which they offer their services to the public.
• Maintaining separate books and bank accounts for your business will not only help you keep track of your expenses, but can be a vital shield during an audit or lawsuit. Accountants call this the "corporate veil", meaning that you aren't comingling personal and business funds, or comingling funds between businesses. It shows you recognize each company is its own distinct entity. This will help protect your personal assets and funds in case of an audit or lawsuit, as well. We've seen cases where an IRS auditor classifies all expenses in a business bank account as "personal" because the client ultimately couldn't determine which ones were actually for the business. 

Be sure to discuss these and other tax tips with your tax professional.

Interested in hearing more? Or have ideas of your own? We'd love to hear them!

Just like your garden, it's time to start planting the seeds for a successful year!

Your business is a lot like a garden. If you tend to it throughout the year, you're much more likely to have a successful and low-tax year than if you wait until the last minute. Here are just a few ideas and processes to implement during the year that may help you save time and set you up for a successful year:

• Track your mileage throughout the year: You can use a phone app, or mileage log, to do this. Mileage really does add up to a significant expense! For 2023 the mileage deduction is 65.5 cents per mile. 
• Stay on top of your bookkeeping: We'd advise using a bookkeeping software, outsourcing your bookkeeping to a professional, or at the very least an Excel spreadsheet, to keep track of money coming in and out of your business. It's much easier to categorize expenses and income throughout the year than it is to go back and try to recreate your records at tax time. 
• Contribute to retirement and health savings accounts: Not only are these good for financial planning, the amounts that you contribute can lower your tax bill! 
• Utilize payroll software: Yes, you can do payroll yourself, but utilizing a payroll software will save you time and stress by helping you pay employees, calculate the taxes, and file quarterly payroll returns. Some payroll products even do these all automatically. 
• Determine your industry's sales tax requirements: Not every business is required to collect sales tax, but neglecting to do so can cause huge issues with Minnesota Department of Revenue. 

Contact our office if you'd like to discuss more small business tips and solutions. 

Every month we put the spotlight on another local business.

This month we're featuring:

Connie, Sue, and Dick, from Looney Sisters Crafts!

What do you do?

We are a family run craft business, consisting of two sisters, Connie Walerius and Sue Roycraft, and Sue’s husband Dick. We started up very gradually during the Covid quarantine period, and began branching out:

• We started making items with a Cricut.
• Husband joined in with his Scroll Saw work.
• Decided to start up our Etsy site.
• Added a CO2 60W Laser.
• Became an LLC.
• Attend vendor markets all over the Twin Cities metro area.

What is your specialty and who do you help? 

Our specialty is making wooden Scroll Saw items, as well as wooden layered laser cut items. We also make hand-knitted and crocheted glass koozies, which are especially popular at some of the local breweries who help support our business.

We provide uniquely made décor, gift items, and seasonal items for everyone.

What is the best way to reach you to get started?

The best ways to reach us would be through our sites:

Etsy: Looney Sisters Crafts

Instagram: looneysisterscrafts

Facebook: Looney Sisters Crafts

What do you do when you're not working?

When not working the business, Connie works full-time as a Quality Engineer, Dick works full-time as an Operating Engineer, and Sue retired last year. We like to do things together like going to concerts, visiting local breweries, traveling, and casual crafting (because we love it so much!)