Every year, every American that earned money is required to file taxes. Whether you are an individual who only receives income from an employer, a side hustler who earns a little more on the side, or a full-time business owner with a registered business, you can find some interesting insights into your business by reviewing your taxes.
Start With the Top Line
The first place to look when considering your taxes is the top line. Looking at yourself as a business, think of this as your total gross revenue. On the 1040 form, you can find this number on line 22. This is the total of all dollars you brought in over the course of a year from your job, side income, royalties, rental properties, dividends, interest, and anything else.When looking at this number, compare to your annual fixed expenses, like rent or mortgage payments, utilities, and insurance to better understand how your income compares to your overhead. The leftover number is what you have left to live on, invest in yourself and your business, retirement, and emergency fund savings, and a little leftover for fun spending.
