Take a Few Minutes to Setup Everything Right. Get a Larger Tax Return. And Start Winning—Even Before You’re Profitable.
Here’s the truth:
If you’re running a side hustle—even just a few gigs or a creative project—you’d be crazy not to set up an LLC and a business checking account. Why?
- Because the tax benefits alone pay for themselves.
- Because the IRS rewards structure.
- And because “not taking your business seriously” is the fastest way to leave free money on the table.
Let’s walk through it.
💼 Step 1: Open an LLC + Business Bank Account
This isn’t just for big businesses.
This is how you unlock tax strategy, legal protection, and long-term flexibility.
Why it’s a no-brainer:
- Tax write-offs become easier and safer
- Your business losses can lower your personal taxes (!)
- It protects your personal assets
- It separates business + personal finances (audit protection)
- It gives you access to business credit, grants, and banking tools (all hidden from your personal FICO score)
Even if your business never scales, the ROI on an LLC + business checking account is massive.
Think: a few hundred bucks to save thousands in taxes over the next few years.
View our quick start guide on opening your LLC here: CLICK HERE
💵 Pay Less Tax, Get Bigger Refunds
When you’re self-employed, you’re taxed on profit, not revenue.
So if you bring in $10K, and spend $8K on valid expenses, you’re only taxed on $2K.
And if you spend more than you made? That loss can reduce your day job taxes and potentially boost your refund.
This is the pass-through advantage—your business activity flows through to your personal return.
📉 Hobby-Loss Rule = Legal Write-Off Window
Here’s where it gets juicy:
The IRS lets you run at a business loss for up to 3 out of 5 years without issue.
This means:
- You can invest in gear, software, travel, training, etc.
- You can legally deduct those expenses even if you’re not profitable
- Those losses then pass through to your personal tax return, meaning they reduce your taxable income from your day job – you get a LARGER tax return
- You get to experiment—and still benefit even if the business doesn’t work out
And if one idea doesn’t work? Pivot. Start a new LLC, or restructure the same one. You still come out ahead by getting a larger tax return for buying the things you would already buy for your business.
Bottom line: You can legally build, fail, and save money doing it.
But you must treat it like a business—LLC, bank account, books. The best part is that this process literally takes a few minutes to set up.
✅ Step 2: Track Everything with QuickBooks Self-Employed ($20/mo) or a Free Solution (see below)
Once you’re set up, tracking everything with Quickbooks Self Employed is easy:
- Auto-tracks mileage (huge deduction if you drive for biz)
- Links to your bank account to categorize transactions
- Calculates quarterly estimated taxes
- Helps you log all those juicy write-offs
No spreadsheets. No headaches. No missed deductions.
QuickBooks does the heavy lifting, you just approve the data weekly.
Don’t want to spend $20/mo? View all of the free accounting alternatives here: CLICK HERE
🧾 What Can You Write Off?
If it supports your business, it’s likely deductible:
- Laptops, cameras, software
- Cell phone (percentage used for business)
- Website costs
- Business meals, travel
- Car mileage (65.5¢ per mile in 2023)
- Office rent or home office
- Percentage of your bills related to that home office
- Ads, branding, coaching, training
Every dollar you write off lowers your taxable income. And if you’re running at a loss, meaning that you do not make any profit? That loss carries through to your personal tax return, lowers your personal taxable income, and results in a larger tax return. All for doing the things you would be doing anyways.
🎯 Quick Start Checklist
- ✅ Set up an LLC in your state (easy + cheap) – View our Quick Start Guide
- ✅ Open a business checking account (keep everything separate) – View Our Business Banking Article
- ✅ Sign up for QuickBooks Self-Employed ($20/month) – View Free Accounting Options
- ✅ Start tracking mileage, expenses, and income – How to Automate This
- ✅ Save 25–30% of profit for taxes – Just place in a separate savings account
- ✅ Hire a CPA or use tax software at year-end
Final Word
Don’t wait until you’re “making real money.”
The best time to set up your business properly is now—when the stakes are low, and the upside is massive.
A small investment in an LLC ($100-$200) and proper accounting can literally put thousands back in your pocket, even if your side hustle never takes off, and you never make a dime in profits.
👉 Treat it like a business from day one—and the tax code will reward you.
