Sunday, August 12, 2007

Indie Business Mindset: Learn the Basics

I get many questions from blog and website visitors. I choose to post the questions that provide information to a wide range of independent professionals. And I post others that offer guidance to all indies. To acquire an indie business mindset must be a goal of all self-employeds.

In my book and seminars I explain specific ways to take a business approach to your indie venture. In my posts I give you unique questions from my indie readers.Their questions are unique, but, alas, their situations are not. They all need to work on developing a stronger indie business mindset.

Greg, from Douglasville, Georgia, sent me the email below. I embedded my response to him. Greg's situation is another example of a self-employed person not thinking like a business -- not looking at what he does as a professional endeavor. See if you think the same as I do.

Hi June -

I filed an extension, so I have more time...brief background, I had $12,000 total income for 2006.
What kind of income? From employment, self-employment, investments, rental property?

If I go the 1040EZ route again I will have to pay $250 federal & $175 state.

You can't use a 1040-EZ if you are self-employed.

My question is, I had a $7,000 medical bill this year & I have about $3,300 in mortgage deductions. Medical and mortgage interest are not business expenses.

Is it worth the effort to file an extended 1040 with both Fed & state just to save the $425?
Whether you invest your time to save your money is a question only you can answer. The first question is: What is your time worth?

Also must mention if I do this, I will have to pay a tax preparer most likely.
I highly recommend that self-employeds not prepare their own tax returns. Do your homework and then use a tax preparer experienced with indies.

In addition to having such a bad year when I have unusually high deductions I hate to pay taxes.

I think in 1947 there was a case reported of a man named Homer Slade who said he enjoyed paying taxes. This is the only known case on record.

Your advice is appreciated. Thank you, GT
You are most welcome, Greg. Asking questions points you in the right direction. Know that whether you make $1,200, $12,000, $120,000, $1,200,000 a year, you are a business. A business is run by certain rules and my blog and website are a good place to start learning the basics. Here's some links on both:
I am a Business
Is it a deductible business expense?
Help! I am self-employed. NOW what do I do?

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