Remember the Tax Man
Pretty much everything I post is blindingly obvious but then it is the obvious stuff which often is either overlooked as being too easy or simply forgotten in the quest for more advanced or avant garde techniques.
My friends company recently went bust. They were making good money and had good cashflow. They were actually a firm of business coaches and if you were their client, the first lesson they taught was saving for your tax bill. Guess what happened to them?You got it right. They were given their quarterly tax bill and couldn’t pay it. This coincided with a drop in revenue and they were closed down owing tens of thousands in unpaid tax bills! It was a great pity because many of them had invested most of their own money into the firm. Some had taken out loans or re-mortgaged to buy in. There was also the loss of about six jobs and the after effects of that.
It was so easily avoided. I never saved for my quarterly business tax bills either but one thing I did was to keep all my PayPal income in my PayPal account. It just so happened that ever quarter it was pretty much enough to pay my tax bill.
It is imperative that every business owner or self employed person saves up a percentage of their income for the tax man. I would save you from the pain and stress of having to find an extra 25% income for the end of the month to pay a tax bill you knew was coming three months ago.
If a firm of business coaches can make this mistake then anybody can.
Paul Browning
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12 Comments
I.R.O.N.Y.
Like they say, only two things are guaranteed in life: DEATH and TAXES.
“Practice What You Preach”
I know it sounds silly, but I can see how the taxes can be overlooked. Business owners get so caught up in bringing in new clients and building their brand, that sometimes the paperwork/details can be overlooked.
I agree about saving tax payments in advance. If it is automatically deducted from your profits, there is no way to forget them. There will be no last minute shuffle to come up with the money.
Take advantage of tax loophole, you have to be tax ninja or you will end up busted.
Always leave room for taxes…even it means you have to break the bottom line.
Agree with Alexander: ?Practice What You Preach?
With taxes, the payer may want to forget but NEVER will the payee forget
There are two inevitables in life: death and taxes. Eventually they catch up with us.
My husband and I started an eBay business and we were hammered at tax time because we didn’t really think about it during the year. We had to change our business plan to include putting money aside from each sale to avoid that this year. So true.
Taxes are too easy to forget about when you have a business. It is such a mistake to only think about it when they are due. It can only wind up hurting you if you don’t plan for it.