I’m making the jump from unemployed to self-employed, which sounds better on a first date don’t you think?
So I’m trying to learn about the differences between a “sole proprietorship” and a “limited liability corporation” and between “cash-based” and “accrual-based” accounting, and so forth. Which is to say, I’m learning about business and accounting for the complete idiot, since up ’til now, the most I’ve really done is checkbook balancing.
And my continuing education in the tax laws is now extending to Schedule C, on which business gain or loss is reported. I doubt I can afford much business gain this year if I want to stick with the experiment, although if I do have any profit I might be able to offset that by taking a deduction for health insurance, so we’ll see.
But my goal this year is to have a modest business loss in preparation for what will hopefully be a modest profit . We’ll see how it goes.
I never thought much about the intricacies of tax law back when I was paying hand-over-fist, but now I’m diving into the details. To anyone who’s been dealing with this sort of thing for years, I’m sure I seem charmingly naïve, but it never occurred to me that I’d have to keep track of my business expenses in 20 different categories in order to fill out a tax form. Now I know.
If you’ve been down this path I’d be interested in hearing from you and comparing notes.