Today TaxMama hears from a journalist who wants tips for kids starting summer businesses.
So, with summer coming up, your kids are starting to get into projects like lemonade stands, mowing lawns, grooming neighbors’ pets, running errands for the infirm in your neighborhood, or starting online businesses. Here are two tips to help you help them start out right.
1) Keep all your receipts. Start learning to treat this like a real business. This is a good time to learn to keep records and develop good habits for future jobs and businesses.
Get a receipt pad – and give every customer a receipt for their purchase or payment. You’ll look so professional. You can get them at Quill (quill.com) as cheaply as $1.79 for book with 50 duplicate receipts (1 for customer, another copy for you).
2) Get an accordion file with at least a dozen pockets.
A nice, sturdy plastic pocket file is only $5.99 at Staples.
Label them as follows (they come with labels):
Income – receipts for money people gave you.
Product costs – for instance, lemonade, plastic cups, sugar, etc. – for lemonade stands.
Advertising – cost of signs, paint, markers etc.
Loans – if someone loaned you the money to start the business, keep track of how much they lent you – and how much you’ve paid back.
Partners – make a list of your friends who own and run the business with you. Write down what each of you is expected to do – and how you will split the profits.
Employees – are you going to just pay some friends to work with you? Get their names, addresses, telephone numbers and Social Security numbers – just in case this business really takes off and you end up paying anyone over $600 for the year. (Yes, it could happen). And use that receipt book to record how much you paid each person. With the copy in here.
And so forth. Use the pockets to track all the different things you want. Use them for receipts, or notes about different parts of the business.
And remember, you’ll find answers to lots of questions, about kids in business, and other tax information, free. Where? At TaxMama.com
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- Quill.com :: $1.79 for book with 50 duplicate receipts
- Staples :: $5.99 plastic 12-pocket accordion, or expanding file
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