1. Set up an LLC for each separate business venture you do: I've got to where I can set up a totally compliant LLC in AZ, CO, or WA in about an hour.

2. Immediately "opt in" to be taxed as a S-Corp via IRS form 2553. I believe you have 90 days after forming your LLC to apply to be taxed this way without losing your LLC structure. This will allow you to get the benefit of avoiding some of the self-employment tax as Jonathon mentioned above.

3. Once you start making regular cheddar hire a firm like Paychex or the equivalent to do your payroll. They'll do your direct deposits, quarterly filings and yearly filings. I think I paid $45 per month for a single member LLC the last time I used them. You're a chump if you waste your own time doing this.

4. Hire a $6 per hour bookkeeper via ODesk: I use this AMAZING bookkeeper out of the Philippines. We have a shared DropBox folder that I drop all my receipts and statements into and out pops corporate books that are constantly up to date for less than $100 per month. (oDesk is better than Elance because you only pay for the time that is actually spent on your project and they run a time tracking app on their computers that takes screenshots.) Granted I don't have hundreds of transactions per month but you can't beat a college educated, perfect English, Skype available, helpful accounting professional for $6 per hour regardless of how much work you need them to do!

When tax time rolls around I'm totally ready to hand over my perfectly balanced books to my accountant AND avoid a fair amount of self-employment taxes.

Jonathan Volk had a great post last week I wanted to share with 5 Star readers.

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