Step 6: Annual Money Matters
Just as your boat requires annual maintenance, so does the financial side of your business. Your long-term business success depends on accurately tracking and managing your profit and losses, beginning from your first season through your last.
Alaska Sea Grant has created an annual financial checklist for "putting away" your business at the end of the season. Separating family expenses from fishing business expenses is sometimes challenging, especially in a family-run operation. The publications below can help.
Tax time
Another crucial priority each year is getting an early estimate of what and when you'll be owing for federal, state and/or local taxes. Meeting with a tax preparer shortly after the season is highly recommended.
Not all income and expenses will be necessarily known the moment you tie up the boat after the last trip of the year, but getting a rough estimate of income tax brackets, listing out any major expenses or purchases, etc., will get you and your CPA on the same page.
Also, while not to up-to-date on latest tax law, the Fishing Tax Center on the US Internal Revenue Service website provides information about how the IRS defines terms like "depreciation" and "fishing deductions," and includes several tips on good record-keeping habits as they apply to tax preparation.
Resources
This in-depth publication, created by Oregon Sea Grant, provides a simple expense tracking system to help earmark family versus business finances.
When the fishing season is over, it’s time to act on financial strategies for your fishing business. This publication will help you organize a financial management to-do list: meet your tax preparer, strategize long-term investment in your operation, pay down debts and save for retirement and next year’s start-up.
Whether captain or crew, the season is not done until bills are settled, the boat is winterized, taxes are estimated, and business, family, and personal financial needs are evaluated.