Tax refunds are an excellent source of start-up funds for those motivated individuals who would like to tell their boss to “Take this job and shove it.” According to the IRS, the average tax refund for 2012 was $2899 – an amount adequate enough to catapult a driven former employee into their own small or home-based business. This is becoming an increasingly opportune way to break free of the chains of “indentured servitude” and begin the journey towards financial independence.
Before starting my own business, I worked at a few menial jobs and I usually had to answer to a boss who was “somewhat less than gifted” in the area of interpersonal skills (and who sometimes wasn’t exactly the most qualified to be in his or her position). It doesn’t take long for someone to get an idea of how the game plays out to keep a person stuck in that type of a situation: It involves doing unappreciated and underpaid work all year while also loaning the government approximately 25% of your income out of every paycheck.
A growing number of individuals in the under-employed workforce feel it’s unfair to work long hours and see about 25% of one’s already under-valued compensation go to payroll taxes, but it’s one of the reasons why people are unable – or unwilling – to make the changes in their lives that will enable them to earn a better living for themselves. For many, it takes an almost super-human effort just to get through a whole week at a job that provides what often amounts to only a subsistence-level living at the end of that week. After the bills get paid, there’s not exactly an abundance of discretionary income left over that can be directed towards the goal of starting one’s own business. There IS, however, a way for many to fund the means to generate a higher income and finally quit working at an undesirable job.
Tax-filing season is the best time to reflect upon what benefit was gained from having worked over the previous year and to realistically assess what one has to show for it. It’s also the time for that loan that was provided to the government last year to be repaid. For many, that loan repayment will come in the form of a tax refund – which can be effectively applied to furthering one’s personal and financial goals IF one is committed enough to pursue them.
If one of your personal and financial goals is to start a small business and achieve financial independence, there is no better opportunity to begin that worthy enterprise than through your tax refund (or with an extremely generous inheritance, but who are we kidding here?).
The question to consider during this tax season is this: Does the tax refund get spent on a vacation, catching up on past-due bills, or investing that money into getting out of the rut by starting a small online or home-based business?
Many successful new entrepreneurs have dropped the vacation plans and have instead dedicated their tax refund towards the costs of starting up their own small business.
Start-up costs typically involve state filing fees, pertinent sales licenses, local permits, and marketing tools such as business cards, brochures, or a website. All of these initial start-up costs could very easily be covered by the average $2899 tax refund and serve as an investment towards the possibility of earning either a much better (and satisfying) source of income or, for some, to generate a second source of income.
For those entrepreneurs who start off by creating a supplemental income from a small or home-based business (while staying at their “regular” jobs), it can soon become apparent that devoting one’s full-time attention to the new business can generate enough full-time revenue to allow them to quit his or her regular “day” job.
New small businesses not only benefit the owner with a more meaningful way of earning a living, they also benefit society as a whole because they are also the largest source of new job creation. At the end of January 2013 there were 12 million people unemployed with almost 5 million of them who have been looking for work for 6 months or more. New small businesses were able to provide a significant portion of those people with much-needed jobs – which also helped to contribute to the economic strength of the communities in which they live.
For many who make the decision to start their own business, the rewards go beyond “just” the economic benefits (such as achieving financial independence). The satisfaction of being your own boss and making your own decisions ranks high in the list of what contributed to the consideration of self-employment in the first place. For those individuals who started their own businesses from their homes, the convenience and cost-savings of eliminating commuting from their work life plays a prominent role in their professional achievement. It also frees up more time to devote to generating income.
All of these positive outcomes can begin growing to fruition from a simple decision to invest this season’s tax refund into a better future by starting up your own business rather than splurging on that vacation (Disneyworld can always wait).
If you would like to discuss self-employment or have any questions about how to best utilize your tax refund to start a small online or home-based business, please feel free to contact me through my website or through my Twitter or LinkedIn accounts. I’m always happy to “talk shop” and I look forward to helping anyone who knows they deserve a better life than the one they presently have.