When launching a small business, many entrepreneurs start out as sole proprietors. If you’re launching a venture as a sole proprietorship, you need to understand the tax issues involved. Here are nine considerations:
Is It Time to Upgrade Your Business’s Accounting Software?
By now, just about every company uses some accounting software to track, manage, and report its financial transactions. Many businesses end up using several different types of software to handle different accounting-related functions. Others either immediately or eventually opt for a comprehensive solution that addresses all their needs.
7 Common Payroll Risks for Small to Midsize Businesses
If your company has been in business for a while, you may not pay much attention to your payroll system so long as it’s running smoothly. But don’t get too complacent. Major payroll errors can pop up unexpectedly — creating massive disruptions costing time and money to fix and, perhaps worst of all, compromising the trust of your employees.
Should You Convert Your Business from a C to an S Corporation?
Choosing the right business entity has many implications, including the amount of your tax bill. The most common business structures are sole proprietorships, partnerships, limited liability companies, C corporations, and S corporations.
Tax Breaks for Increasing Accessibility
Certain small business owners may qualify for tax breaks by making their premises accessible to people with disabilities. The CDC reports that 61 million people in the United States are affected by disabilities.
Business Owner’s Health Care Self-Insurance and Stop-Loss
For businesses, sponsoring a health insurance plan for employees cost-effectively is an ongoing battle. In the broadest sense, you have two options: fully insured or self-funded.
A fully insured plan is simply one you buy from an insurer. Doing so limits your financial risk while offering the most predictable costs. The other option is what’s commonly known as “self-insurance.” Under this approach, your company funds and manages the plan, usually with the help of a third-party administrator.
Tax Tips for Growing Your Business with a New Partner
There are several financial and legal implications when adding a new partner to a partnership. Here’s an example to illustrate: You and your partners are planning to admit a new partner. The new partner will acquire a one-third interest in the partnership by making a cash contribution to the business. Assume that your basis in your partnership interests is sufficient so that the decrease in your portions of the partnership’s liabilities because of the new partner’s entry won’t reduce your basis to zero.
Sending the Kids to Day Camp May Bring a Tax Break
Among the many challenges of parenthood is childcare for kids when school lets out. Babysitters are one option, or you might consider sending them to a day camp. There’s no one-size-fits-all answer, but if you do choose a day camp, you could be eligible for a tax break. (Unfortunately, overnight camps don’t qualify.)
Boost Your Home Improvements with Tax Credits
For many homeowners, summer means it’s time to tackle home improvement projects. By investing in certain energy-efficient updates, taxpayers not only can lower their power bills but also can score some tax breaks.
What Expenses Can’t Be Written Off by Your Business?
If you check the Internal Revenue Code, you may be surprised to find that most business deductions aren’t specifically listed there. For example, the tax law doesn’t explicitly state that you can deduct office supplies and certain other expenses. Some expenses are detailed in the tax code, but the general rule is contained in the first sentence of Section 162 (PDF), which states you can write off “all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business.”