At ProVision, we love to help new investors and business owners get started and on their way to financial freedom. One of the most common issues that I'm asked is what to do tax-wise during the first year of business. Kari asked it this way:

Q: I am a new investor, setup an LLC like Robert suggested and now don't know where to start. All our money is in our names not sure how to roll it over to the company. We purchased our first home in September, rehabbed it and have renters in the home with a cashflow of about $250. All money that was out of pocket came from our current account. I was looking into getting Quickbooks which I feel will benefit us. I have been keeping all receipts for our expenses and now we have revenue. How do we get started to make sure our first year taxes go smoothly.

A: First, you are right to get Quickbooks (version Quickbooks Pro is best) and get your accounting set up properly. We have two really good courses on bookkeeping and Quickbooks that you can find on our website at http://www.provisionwealth.com/products. You have a couple of choices about how you record your contributions to your LLC. You can record it as owners equity (capital) or you can record it as a loan. There can be some asset protection benefits to recording it as a loan. Be sure that you are set up with your tax preparer to pay quarterly estimated tax payments. Also, be sure you have made the proper tax elections for your entity.

I strongly recommend that all new investors work with a tax advisor to create a long-term, flexible tax strategy. In less than a month, you can learn everything you need to know about operating your first year in such a way that it's easy for you and reduces your taxes and also protects your assets. Feel free to call us at 866.467.5809 if you would like to know more about tax and asset protection strategies.

Warmest regards,

Tom