In these lazy, hazy days of summer, probably the last thing anyone wants to think about is money. As long as we’ve got enough to go to the beach, the mountains, or wherever we want to go, we don’t think much beyond that.

It’s my experience, though, that summertime is often when people start thinking about going out on their own, starting that business, being their own boss. Indeed, vacation time may be the cause: Lying in the hammock, anything seems possible.

So this column is for all you trainers and would-be trainers who are thinking about cutting the cords and flying solo. Today and next week we’re going to talk about money stuff.

The tax man cometh
I bet that’s the last heading you wanted to see, huh? Well, as painful as it may be, going out on your own means coming face to face with the fact that you are now responsible for all your taxes and expenses. You are now the employer, remember? So, let’s go to the numbers:

Federal income tax 15 to 33%
Self-employment tax 15%
State income tax ??%
Local income tax ??%
Medical insurance ??
Retirement ??

To get a handle on what you may face, take a look at your last pay stub. In most cases, you are now going to have to cover every one of those line items. It’s up to you to figure out how to do that.

The one that many first-time self-employed folks forget is the self-employment tax. Before, your employer paid half of it (7.65 percent). Now you’ve got the whole kahuna yourself. And trust me, as one speaking from experience, nothing ruins your day like filling out your 1040 and realizing you didn’t allow enough for the SE form.

Keep records – and not the vinyl disk variety
To minimize the hit, it is vital that you keep detailed records. Now that you are self-employed, every legitimate business expense is deductible. To take the deduction, though, you’ve got to be able to prove the expense. That means records.

Mileage, other travel expenses, meals, telephone, even that spare bedroom—all of these may make a difference in your bottom line, and thus in your tax bill.

Which ones? With me here and you there, I can’t tell you that. Each person’s situation is different.

Either be the accountant, or see the accountant
I can’t emphasize this point enough—it’s up to you to take care of your dough. So, either learn about the tax laws, or pay someone else to learn about them. Don’t be penny-wise and pound-foolish. The money you spend on a good accountant will come back to you many times over in the amount you’ll save, either in taxes or in not spending money unnecessarily.

Choosing a good accountant is like choosing many other things: You can either play finger roulette with the phone book, or you can do some research. Ask other trainers who they use. Ask other self-employed people you know. Make up a list of possibilities, and then interview them.

That’s right—set up an appointment and do a job interview. After all, you are going to be paying him or her, so you have the right to make sure it’s a good fit. As any businessperson will tell you, two of the most important choices you will ever make are your lawyer and your accountant. There are many things you might want to ask, and there are numerous places on the Web telling you how to pick an accountant. Be sure, though, that your pick is experienced in self-employment matters and has an ongoing practice of self-employed clients.

We’re just scratching the surface
Considering that entire books have been written on how to be successfully self-employed, this column is just a brief warm-up. Remember: Everything in this column is unofficial advice. I make no claims to be any sort of financial adviser, tax planner, or to have two brain cells to rub together. If you act on anything in this column, you do so at your own risk. (Got to keep the lawyers happy.)

Next week, in part II, we’ll look at more details of going out on your own.

Bruce Maples is a writer, trainer, and consultant living in Louisville. His latest project is a tax guide for Eskimos entitled Your Igloo: Tax Shelter or Domicile? Follow this link to comment on this article or write to Bruce .