Author: Lisa Leveillee, Small Business Senior Advisor
- Many self-employed workers ask, “Am I a business owner?” The answer is often yes.
- Treating self-employment like a business can reduce taxes and increase benefits.
- Opening a business checking account and tracking expenses are key first steps for small business owners.
Many people work for themselves without ever realizing they’re actually running a business.
If you’ve ever been paid by check or cash without taxes withheld by a “boss,” then you’re not just working a job — you are self-employed. This applies to contractors, freelancers, gig workers and even side hustlers. Whether you’re fixing a neighbor’s fence, driving for a rideshare service or designing websites in the evenings, if the IRS isn’t receiving taxes upfront, it’s up to you to manage your income like a business.
That’s not just about filing taxes once a year. Treating your work as a business opens the door to keeping more of what you earn, managing expenses wisely and even building long-term financial security.
A Real-World Example
Take John, a family friend who recently finished our basement. John makes a living in construction doing remodeling projects and home repairs. He is very talented and specializes in finishing basements.
For our project, he transformed an unfinished basement into a rec room, gym/yoga room, office and bathroom — a four-month process that involved licenses, deadlines, material purchases, labor, outsourcing to electricians and plumbers, and patience.
We paid for all the supplies and licenses with our credit card, taking advantage of the rewards and bonuses offered for monthly spend. That led me to think about other benefits John missed out on our project and wonder how many other projects he had.
As we talked with John, one thing became clear: he wasn’t running his construction work like a true business.
Here’s why.
John earned $25,000 for our basement project. He deposited the money into his personal checking account and planned to report that full amount as income at tax time. And he isn’t the only one using that model. The plumber and the electrician he subcontracted were also reporting their income in a similar manner. They get paid by customers, deposit the money into their personal accounts, add up the payments they received and report that as their income at the end of the year.
What they didn’t account for were the expenses they incurred to earn that income.
Using this job as an example, John made $25,000. To earn that money, John needed specific tools, equipment and safety gear. He also needed to drive to the job site, and most importantly he needed licenses and insurance to work on the project. All these things cost money. But when reporting his income, John was paying taxes on the $25,000 income and not deducting any of the expenses incurred.
This situation isn’t unique. At FNBO, we often see individuals cashing checks from a contractor they call “the boss.” But if no taxes are withheld, that “employee” isn’t really an employee at all. They are a business owner, and they need to track both income and expenses so they aren’t left with an unexpected tax bill or worse, paying more than they should.
Small Shifts, Big Benefits
After finishing our project, John decided to make a few changes. He set up a separate business checking account to organize income and expenses. He began using a credit card for project costs. Now he is earning rewards that he can put toward family experiences — like a future trip to Disney. More importantly, he started to recognize that treating his work like a business gives him more control over his finances.
That’s the mindset shift many self-employed people need: you don’t just “do the work.” You run a business. And with that comes both responsibility and opportunity.
Where to Start
If you see yourself in John’s story, here are a few first steps to take:
- Open a business bank account. Keep your business income and expenses separate from your personal finances.
- Track your expenses. Tools, supplies, mileage, insurance and licenses all matter. Deducting these costs can save you money at tax time.
- Seek guidance. Free resources like your local Small Business Development Center or business librarian can provide tools, templates and advice.
- Think ahead. Even a simple business plan that outlines your services, pricing and financial approach will help you grow with intention.
Take Yourself Seriously
If you’re working for yourself, you are a business owner. Whether you’re remodeling basements, driving deliveries or freelancing online, the money you earn and how you manage it matters. By taking a few intentional steps, you can stop leaving money on the table and start building a business that works for you.
At FNBO, we’re here to support you with resources, guidance and banking solutions designed for small business owners. The first step is recognizing that you are one. The next is deciding to treat yourself like one.
About the Author
Lisa has more than 25 years of experience in the restaurant industry. After transitioning into banking, she learned how a bank could have supported her previous businesses. This experience provided Lisa with a solid understanding of how to help small business owners succeed.
