What is an Active-Duty Entrepreneur?

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What is an Active-Duty Entrepreneur?

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JasonAnderson.jpgAn active-duty entrepreneur is a military service member or spouse who deliberately plans and carries out the steps required to conceptualize, develop, and (perhaps) launch a small business while still on active duty. They understand that utilizing their unique military ecosystem (which provides job security, a dependable salary, health-care, and a predictable career timetable) provides them a built-in advantage over other aspiring entrepreneurs. In fact, the military ecosystem might be the ideal place to begin small business development. Think of the untapped well of entrepreneurial potential energy the Department of Defense has to offer! If only a small percent of the overall military population mobilized this new approach, it would be a game-changer by spurring small business development, innovation, and job creation resulting in an overall positive affect on the sluggish US economy.


An active-duty entrepreneur understands that creating a business is an exceptionally difficult task but one that can be overcome if they use the military ecosystem to their advantage. With a predictable career timeline, service members (separating or retiring) have a definitive timeline to begin their planning. With a timeline established, they can leverage their bimonthly salary to gradually budget for and invest money in their small business in a deliberate and pragmatic fashion.


An active-duty entrepreneur understands that carrying out these steps represents a best opportunity to enjoy successful small business ownership and a more stable transition from the military at a very low risk to themselves and their families. With the luxury of time, a stable job, and consistent money, the service member can endure the tumultuous early phases of business conception and start up while learning to be a savvier private sector operator. As they grow more mature together over time, so does the chance that the small business seeds they plant will create a viable small business that could provide a steady income before separation or retirement thereby negating the typical apprehension associated with transition.

 

About the Author:  Jason Anderson is a 19 year USAF Lietenant Colonel who is also a small business owner and author of the book, "Active Duty Entrepreneur."  You can follow Jason on Facebook (https://www.facebook.com/activedutyentrepreneur) and Twitter (https://twitter.com/ADEntrepreneur1).  To read more from Jason and to order his book, follow this link:  http://activedutyentrepreneur.com/ 

See also...

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Contractor vs Employee

employee-contractor-300x270.jpgSo, you have a job offer and the employer offers you employment as either an independent contractor or an employee. You figure that since your wife is in the military, you don't need the insurance and your paycheck will be bigger without all that withholding taken out.

Life as a 1099'er

Ready to take that 1099? Not so fast. You might be in for a big shock at the end of the year. Here is a list of some of the hits you'll take.

• All the income taxes for each taxing entity will be due every quarter after your first year in business. A total of 90 percent must be paid by April 15 of the following year or there will be a penalty.

• You will have to pay the entire Social Security tax. That amounts to 15.3 percent on your first $113,700 and 2.9 percent over that amount. Employees get half that amount paid by their employer automatically. However, as a self-employed individual, you may deduct the half that an employer would have contributed.

• Independent contractors are not covered by non-discrimination laws, wage and hour protection, unemployment insurance, or pension and benefit protections that “real” employees receive.

• If you drive or run other equipment for the business that pays you, you won't be covered by the employer's insurance policy. Guess who that leaves?

What Makes an Employee

The basic issue in deciding whether a person is an employee or an independent contractor is the business's control over the work of the person. This sounds like a simple matter, but courts constantly are deluged with arguments about this issue.

If you're told when to come to work; if you don't provide your own equipment or supplies; and if you are paid in set increments such as hours or piecework, you are an employee, period. If they train you, you are an employee. The courts have made clear that just because the employer doesn't decide to use control, doesn't mean you are then an independent contractor. The crux of the matter is whether they have the right to do so. Read the IRS publication about the issue of contractors vs employees.

Making the Right Decision

Before you make any decisions, take some time to investigate and consider which category works best for you and your family. If you are leaning toward becoming an independent contractor, make sure you're prepared to save enough to cover your tax expenses and any additional costs like liability insurance.

Consider incorporating as a LLC to protect yourself and give you additional tax protection. It's a good idea to get the help of a paralegal, lawyer and tax specialist.

If you are considering becoming self-employed, be certain to read the IRS Bulletin Understanding Employment Taxes. This is a simple document that explains what the requirements are in everyday language.

This post was sponsored by the School of Firearms Technology from the Sonoran Desert Institute.

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MOAA Legislation

vid_moaalegthumb.jpgThe Military Officers Association of America is the nation's largest and most influential association of military officers.  It is an independent, nonprofit, politically nonpartisan organization.  They are the leading voice on compensation and benefit matters for all members of the military community, and are a powerful force speaking for a strong national defense and representing the interests of military officers at every stage of their careers.  

Learn why male military spouses and their families should pay attention and get involved with what MOAA is doing.  

Interviews with Karen Golden (Deputy Director, MOAA Government Relations) and Monique Rizer (Deputy Director, MOAA Spouse Programs).  Video Credit to MOAA Video Department for providing some b-roll footage.



 

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