Overview
1. Open a small business bank account: First, you need to open a small business bank account. This will allow you to track your expenses and income and let you pay taxes easily.
2. Track your small business expenses: Make sure to keep track of all your business expenses, including advertising costs, travel expenses, supplies, and any other costs associated with running your company.
3. Develop a bookkeeping system: It is important that you develop a bookkeeping system that allows you to easily record all transactions related to the business so that they can be tracked over time in order to accurately calculate taxes owed or refunds due on previous filings.
4 . Set up a small Business payroll system: Setting up an automated payroll system is also recommended as it will help ensure accuracy in paying employees their wages on time as well as tracking deductions for taxes due on those wages.
5 Investigate import tax: Depending on where you are located, there may be import taxes that apply when importing goods from outside the country into yours so it’s important to investigate this before making any purchases.
6 Determine how you’ll get paid: You should also determine how customers will pay for their services or products – cash, credit card? PayPal? etc
How to pay Taxes for my social media marketing agency?
1. Determine Your Tax Status
1. Determine if you are a sole proprietor, LLC, or partnership: If you are self-employed, your business income will be claimed on your personal tax return.
2. Consider corporations: Corporations are separate tax entities and are taxed independently from owners; income from the corporation is taxed as an employee.
3. Research state tax laws: Be sure to check out the laws for the states where you have team members (potentially across multiple states).
4. Consult with a professional: Talk to a tax expert if you’re unsure about potential obligations or have questions regarding compliance issues or exposure risks related to taxes on social media marketing agency income.
5. Conduct an Exposure Tax Analysis: Have Blumer CPAs perform an Exposure Tax Analysis to discover potential liabilities and areas of exposure related to taxes on social media marketing agency income.
2. Research Your State’s Tax Requirements
Research the state tax laws for your business. This can be done by visiting your state’s Department of Revenue website or speaking with a tax professional.
Find out if there are any special taxes that apply to businesses in your industry or any exemptions you may be eligible for based on size or other factors.
If applicable, learn about self-employment taxes such as Social Security, Medicare, and Unemployment Insurance contributions that may need to be paid depending on how you structure your business entity/relationship with employees (e.g., independent contractors).
Check into any local sales taxes that may apply to goods/services sold online if you have an ecommerce website (note: many states exempt certain types of purchases from sales tax).
Make sure all appropriate filing deadlines are met for submitting annual returns/statements related to these taxes so that you don’t incur penalties or interest charges unnecessarily..
3. Understand Your Business’s Tax Liability
Calculate your total income for the year. Include all revenues from your social media marketing agency, including fees for services and any other sources of income such as contracts, grants, or donations.
Determine which taxes apply to your business’s total income and calculate the associated tax rates for each type of tax that applies to you (such as corporate tax rates).
Add up all applicable taxes and multiply by the total amount of income earned during the year in order to calculate your final tax liability amount due at filing time (this may be different than what is owed on an estimated basis throughout the year).
Be sure to keep track of any expenses that qualify as deductions against this total amount due when filing taxes (such as business expenses related specifically to running this small business).
4. Assess Your Expenses and Deductions
Open a separate business checking account for your social media marketing agency. This will help you keep track of all business transactions and identify any potential deductions.
Use accounting software to track income and expenses for the business, such as invoices and payments received or due. Professional accounting software will make it easier to stay on top of outstanding invoices, cash shortages, or slow-paying customers that may affect your overall tax bill at the end of the year.
Create categories to budget and analyze performance (e.g., advertising costs, and website maintenance fees). This will allow you to better understand how your expenditures impact profitability over time so that you can make more informed decisions about how much money should be allocated toward each category in future years.
Take advantage of any relevant tax deductions available for small businesses (e .g., cost of goods sold) by keeping detailed records of all purchases related to running your social media marketing agency.
5. Choose the Best Tax Software for You
Gather information about the different accounting software options available. Read reviews and compare features to find one that meets your needs.
Consider platform integrations, broad reporting, sales tax configuration, and customer support for each software option you are considering using.
Evaluate if the accounting software has an integration with your ecommerce platform or supports third-party app integrations with tools for contract management in order to optimize efficiency in managing both accounts simultaneously.
Make sure that the software offers advanced reports such as inventory and expenses so that you can monitor your business’s financial health quickly. Check for 24/7 support and self-service centers in order to address any potential issues quickly without needing to wait for a response from customer support team members at all hours of the day or night if needed during peak periods like end-of-year tax filing season etc.
6. File Your Returns on Time
It is important to file tax returns for your social media marketing agency on time.
If you have a sole proprietorship, partnership, multiple-member LLC, S corporation, or corporation structure, then you are required to file Schedule C (for sole proprietors), Form 1065 (for partnerships), Form 1120-S (for S corporations) and Form 1120 (for corporations).
These forms must be filed by April 15 for businesses with a calendar year-end or March 15 if they have a fiscal year-end. Failing to meet these deadlines can result in penalties and delayed processing of your return. Additionally, those who have small businesses should also consider filing other related tax forms such as Schedule EIC or Schedule SE depending on their circumstances.
How to do accounting for your social media marketing agency?
Step 1: Set up an account for your social media marketing agency
1. Create a business name: Use our free Business Name Generator to come up with a unique name for your social media marketing agency.
2. Check availability of domain name: Check if your chosen domain name is available with GoDaddy.com
3. Secure domain name: Purchase the domain and set it up on your web hosting platform of choice (e.g., WordPress).
4. Create a website: Install a content management system (CMS) such as WordPress or Drupal to create an attractive website for your agency’s services and products/services offered
5 . Create logo: Use our free logo maker to create a professional logo for use on all marketing materials associated with your business, such as websites, social media pages, etc.
6 . Set up LLC: Incorporate an LLC for added legal protection by using Northwest’s $29 plus state fees package
Step 2: Choose a business name
1. Use a Business Name Generator to get started.
2. Check if your name is available as a web domain with GoDaddy.
3. Create a logo using our free logo maker.
4. Once you’ve chosen a name and created a logo, file the LLC’s formation documents with your state’s Secretary of State office or an online portal for free business filing services like IncFile or LegalZoom.
5. Finally, make sure you have all of the necessary licenses and permits required by law such as an LLC license if you’re in one of the states that require it (like California).
Step 3: Choose an LLC registered agent
It is important to choose an LLC registered agent for a social media marketing agency because it offers many benefits, such as privacy and peace of mind. Many Best LLC Services offer a free year of registered agent service when you hire them to form an LLC.
Additionally, having a registered agent will allow your LLC to receive legal documents and tax notices on time without any hassle. Therefore, it is crucial to choose the right registered agent service for your social media marketing agency so that it can run smoothly without any legal issues arising later on down the line.
Step 4: Establish other LLC accounts needed
Open a separate business checking account for your LLC. This will help you keep track of all business transactions and ensure that they are properly recorded for tax purposes. Set up a savings account or other financial vehicles to organize cash flow funds and plan for taxes.
Consider getting a business credit card to build credit and secure funding in the future, but only if your LLC is required to have one by law (check with your state/province).
If necessary, register your business name with the state/province where you plan on doing business (check with each bank for paperwork requirements). Keep accurate records of income and expenses throughout the year using accounting software or another system so that filing taxes is easier next year
Step 5: Create an operating agreement
An operating agreement is a legal document that outlines the ownership and member duties of an LLC. It provides clarity on how decisions are made, how profits are distributed, and how conflicts will be resolved.
It is important for social media marketing agencies to have an operating agreement in place because it helps to ensure smooth operations, protect the business from potential legal issues such as disputes between members or lawsuits from clients, and provides peace of mind for all involved parties.
Having an LLC operating agreement in place also makes it easier for owners to make decisions regarding major changes such as expansion or selling the business.
Step 6: Get an EIN
1. Visit the IRS website and fill out Form SS-4, Application for Employer Identification Number.
2. Provide basic information about your business, such as its name, address, and type of entity it is (sole proprietorship/partnership/corporation).
3. Receive your EIN immediately after submitting the form online or by mail if you choose to fill out Form SS-4 manually instead of online.
4. Use your EIN when filing business tax returns or making tax payments in order to comply with IRS regulations regarding businesses that have employees or income from certain sources like rental properties or investments in securities trading accounts etc.
Step 7: Track expenses and track income
Open a separate business checking account for your social media marketing agency. This will help you identify all business transactions clearly, allowing you to accurately report them on your tax return and claim any applicable deductions.
Use accounting software to track your business’s income and expenses. Professional accounting software will make it easier for you to stay on top of outstanding invoices and spot cash shortages or slow-paying customers before they become big issues later on in the year.
Set up basic small-business accounting records in a spreadsheet if needed, though it is more tedious than comprehensive small-business accounting software such as Quickbooks or FreshBooks. Securely store all financial information in a cloud-based platform so that it can be accessed anywhere at any time
Conclusion
1. Determine which taxes apply to your social media marketing agency: Social media marketing agencies are subject to federal income tax, state income tax, and local taxes depending on where they are located.
2. Calculate your total taxable income for the year: To do this, add up all of the revenues generated by your agency in a given year and subtract any expenses related to running the business (such as salaries, rent, etc.).
3. Figure out how much you owe in taxes: Use this number along with any applicable deductions or credits that can lower your overall tax liability (e.g., employee contributions).
4. Make sure you’re filing correctly: Once you have calculated how much money needs to be paid in taxes for a given period of time (usually quarterly or annually), make sure that it’s filed correctly via an IRS Form 1040 Schedule C if applicable for small businesses like social media agencies that generate their own revenue with services rendered rather than products sold directly to customers.
