As ABC is getting ready to close the third quarter in 2012, I will be calling our CPA to schedule an appointment to discuss year-end tax projections. In the past I have looked at the taxation system as a problem, a thorn in my side. However, I have come to realize that the taxes I pay is money that is not mine just as the payroll money paid to our employees is not mine. Essentially, I am employing the government.
Now, I realize this may open the door to the discussion regarding the amount of taxes paid and the quality of this “employee”; however, I want to focus on the mindset that may cause some businesses to get into trouble. This can be a–kind–of–trouble that may close your business doors.
Our family plays this card game called “Rock-n-Roll”. The game consists of 8 cards face down. To start the game each player turns 2 cards of the 8, face up. As the game progress more card is revealed as you draw from the card pile (or discard pile), replace the face-down card with the face up drawn card. The face-down card replaced is then placed in the discard pile. This reveals the value of the card. The person to the players left now has the chance to use the card discarded or draw a new card from the card pile.
Sometimes the discarded card’s value is a really good and it is easy to say, “I shouldn’t have given you that one (card)”. I have found myself feeling a bit “crazy” thinking that way. Processing my strategy, I came to realize that I am the caretaker of the face-down cards owned by the player to my left. When the game started these cards were a second hand for them. Knowing this I realized that I too have a second hand in the 8 cards to my right. I too get the experience of them being slowly revealed during the game. The game is now more like a treasure hunt for me.
Thank you for staying in the conversation to get my analogy to what this has to do with business. I hire employees to do a job and I pay them an agreed amount to complete the tasks of that given job. I make sure that there is money is set aside so that payroll is never missed. I realize that if I don’t make payroll that I will not have the help needed to keep the business operation flowing and the doors open.
So if I apply the same attitude to my taxes owned, I will be planning ahead, knowing that this money is not mine. I now know that I will never have a tax problem. I will be setting aside the money needed to make sure my tax “government payroll” is covered. The positive pay out is that if I play my “hand” right I will keep more of the interest making money, vs giving too much tax to soon, and then getting the pleasure of paying taxes from an account that has been building in preparation.
The nice side of this is that as your business success grows you will need to pay more taxes!!! It will be almost like treasure hunting again…… or not!
So maybe there is no such thing as a tax problem!? Hopefully, you too are checking in with your CPA while planning for the end of the year.
Remember, it is the small businesses that are the backbone of America!! Press on!!
~ Ronald J Tyler, Owner and Founder of V-tech. Merchants