Episode Details
Back to EpisodesBilly Robinson, CPA | Bookkeeping and Accounting In Private Practice | TPOT Podcast 053
Description
In this episode of the Practice of Therapy Podcast, Gordon talks with Billy Robinson, CPA about some essential things to remember when starting a business. Billy suggests seeking out a trusted CPA and an attorney in order to outsource some of the complicated aspects of running a business. We also learn why it is important to decide on your choice of business entity. Next, we discover how making profits and doing taxes are different when being the business owner as opposed to an employee. Lastly, Billy and Gordon discuss keeping overhead expenses low and some examples of key performance indicators. Overall, self-employment can be very rewarding, yet it is critical to making sure you are spending time ON the business rather than IN the business.
Meet Billy Robinson
Billy is a director based in the Kingsport office of Brown Edwards and focuses his area of practice on construction and real estate related companies, family-owned businesses and governmental agencies. Billy has twice been named a "Super CPA" by Virginia Business magazine and has been named one of the "Top 10 Business People – Under 40" by the Shenandoah Valley Business Journal. Billy graduated from the University of Virginia's College at Wise with a Bachelor of Science in Accounting and a Minor in Criminal Justice. He is a member of the American Institute of Certified Public Accountants, the Virginia Society of Certified Public Accountants, the Construction Financial Management Association, the Virginia Transportation Construction Alliance, the Shenandoah Valley Builder's Association, and the Associated General Contractors of Virginia.
Billy suggests seeking out a CPA and a reliable attorney to be your trusted advisors. Familiarize yourself with how owning and operating a business is different from being an employee. Owning a business includes a whole different set of responsibilities. For example, you will need to know how to set up payroll taxes and be familiar with filing requirements.
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Starting a BusinessThe most important decision is to establish your choice of entity in order to file your income tax return. For a lot of small businesses, the owner does not set up their business as a separate corporation and end up filing as Schedule C. Keep in mind you will not have much legal liability protection when filing a Schedule C. With a single-member LLC (limited liability corporation) the IRS will disregard that entity for taxation purposes and it will be reported on your personal return. Filing as a single-member LLC will earn legal liability protection.
Keep Business Finances and Personal Finances SeparateOwners need to have a type of accounting system for business expenses. Keep separate business credit cards and banking accounts from your personal ones. If being audited, the first thing the IRS will look for is personal expenses that have been charged with your business account. In order for something to be an expense, it has to be considered a necessary and ordinary expense for the business itself. QuickBooks is the best system out there for small businesses.
Startup expenses can be accumulated and written off in the first year. A car can also be written off as a business expense. However, it is important to keep your personal use of the car separate from business use. Keeping a travel log of mileage is a critical way to ensure this. You can even write off the mileage from your personal car at fifty-three cents a mile. Advertising expenses, certifications, t