This year through December, Americans have applied for more than 5 million federal Tax Identification Numbers needed to register new businesses, according to data from the U.S. Census Bureau. That's already outpaced the roughly 4.3 million applications for new businesses for all of 2020, as well as the 3.5 million filed in 2019.
From there, you should also be open to taking on new work or revenue streams as you see fit, she said. Business expenses include things like the cost of establishing an entity such a limited liability company if necessary, and paying for equipment and services like bookkeeping software or buying a new computer. You may also need to buy your own health insurance and set up your own plan for retirement savings, benefits you'd generally get through an employer.
The first is that you need to stay organized with your finances and be clear about what's a personal expense versus a business one. "Knowing that, you should be planning before the year's over how you can minimize tax liabilities," she said. This includes knowing what to write off as a business expense as well as what other credits and deductions you're eligible for.
"I announced it like people announce that they got engaged or they had a baby," said Woodruff-Santos, adding it can help drum up potential business in your current network.