In today’s inflationary times and a down stock market, people are looking for side jobs as another source of income. But avoid some of the nasty surprises by planning ahead for additional income taxes, a possible increase in your Medicare premiums, or a reduction in your Social Security benefits.

You are working hard, very hard. In fact, you have never worked so hard in your life. Your employees are also working hard. Therefore, your business must be doing, amazingly well. Right? BUT...your bank account is nearly empty, your desk drawer is full of checks that you can't mail, and your line of credit is maxed. So, what is wrong - where is all the cash going? Often, the mystery may be explained by analyzing your financial statements.

Entity choice is important for many reasons. Asset protection and tax considerations are always near the top of the list. As a business progresses through the five (5) phases of a life cycle: start-up, growth, maturity, renewal/rebirth/decline and succession– the factors that earlier prompted a particular choice of entity may change. And, a new entity choice may become more appropriate.

Taxes usually aren’t much fun. They’re even less fun when one cannot afford to make payments without serious financial hardship. Don’t worry, the good old IRS has some ways to still get its money. This article, written by the IRS, details some avenues for paying your taxes when you can’t pay all at once, including getting a loan, payment plans, penalty relief, and more.

Happy New Year!

And get ready for the tax filing season.

Hopefully, you followed some of the suggestions outlined in Publication 552 to organize your records. If you did, great! This will make filing your tax returns a lot easier this year. It also means that you and your tax advisor can spend more time on tax and financial planning issues for 2023 vs. looking back to 2022.