| TAX TIP.
Here's a way to ensue you don't forget your tax payments: Check
out the Electronic Federal Tax Payment System (EFTPS) that allows
small businesses to pay taxes by automatic withdrawal from your
own bank. Details are at: http://www.irs.gov/irs/display/0,,i1%3D46%26genericId%3D10090,00.html
|
| SEP &
SIMPLE PLANS. Don't forget that as a part-time business you
can still set up a SEP or SIMPLE pension plan for your part-time
income. Consult your CPA for details. |
| HOME-OFFICE
DEDUCTIONS. We're asked frequently about what tax deductions
can be taken for an office in the home. All the answers can be
found in IRS publication #587, Business Use of your Home. Get
it at http://www.irs.gov/forms_pubs/pubs.html. |
|
BUSINESS
FINANCING. Don't forget your credit union! Nearly all credit
unions allocate some percentage of their total assets to commercial
lending.
|
| NEW TAX
BREAK FOR LEASED AUTOS. Starting this year (1999) leased,
as well as owned autos, qualify the standard mileage rate of 32.5
cents/mile. Your CPA or accountant can give you details. |
|
ENROLLED
AGENT? These folks are licensed by the federal government
and specialize in business tax matters. They can be an alternative
to a CPA at a lower cost! Check for an agent near you by calling
the National Association of Enrolled Agents at (301) 212 9608.
They have about 10,000 members. Also check their website at
http://www.naea.org
|
| IRS
WEBSITE. The IRS has a new website (http://www.irs.gov) and
it is quite good. Most forms and publications are available for
instant download and many of the publications are on-line which
is quite useful for quick research. There is a lot of handy and
useful information here - check it out. |
| HIRE
WISELY - SAVE TAXES! Did you know that if you hire welfare
recipients, teens from low-income families, disabled workers,
and some veterans, you can receive big tax credits? I said credits,
not deductions - i.e., dollar for dollar reduction in your tax
bill. Hire a welfare recipient, for example, and receive a tax
credit of $3,500 against the first $10,000 in wages paid. Get
details at 1 (888) 872 5621 |
CREDIT
HISTORY. You should check your credit history with the major
national credit bureaus at least once a year. Call or write to
get a copy of your report.
Experian, PO Box 2350, Chatsworth, CA 91313. 1-800-392-1122
TransUnion, PO Box 7000, N. Olmstead, OH 44070. 312-408-1400
Equifax, PO Box 740241, Atlanta, GA 30374. 1-800-685-1111 |
| DUNS.
Speaking of DUNS, you should get a DUNS number even if you are
not interested in pursuing Government business. Many of your potential
customers may check D&B to see if you are a "real business." The
DUNS number will allow D&B to identify your business. Get the
number - it's free and takes about 2-minutes over the telephone.
You are given the number immediately. |
| SOCIAL
SECURITY INFO. Your social security records are important
(especially in light of possible Year 2000 problems!). Get a current
copy by calling the Social Security Administration at 1 (800)
772 1213 and ask for a "Personal Earnings and Benefit Estimate
Statement," Form SSA-7004 or get one over the internet at http://www.ssa.gov |
| A GOOD REASON
TO INCORPORATE. We all know that incorporation can provide
some measure of personal liability but it can also save you taxes.
Self-Employment taxes are imposed at a rate of 15.3% on the first
$68,400 of self-employment income, and at a rate of 2.9% on all
income above this. This tax apply to ALL the income earned by
a sole-proprietor, even if the owner leaves some of the earnings
in the business. However, if you operate as a S-corporation only
earnings actually paid to an owner as compensation are subject
to payroll taxes. Any money left in the business for reinvestment
or distributed to a shareholder as a dividend is not subject to
payroll taxes. Thanks to the TaxTalk Newsletter for this information.
Learn more about this excellent newsletter at http://www.isquare.com/fhome10.htm#3 |
| RETIREMENT PLANS
FOR THE SELF-EMPLOYED. Don't forget to take advantage of the
plans that are available to allow you to make tax-deferred pre-tax
contributions. The SIMPLE plan allows contributions up to $6000
per year. The SEP plan allows contributions up to 15% of salary
or a maximum of $24000 per year. Check with your tax advisor for
details. These plans can also be used by small businesses - up
to 25 employees for SEP and up to 100 employees for SIMPLE. |
| IRS INFO.
Download forms and publications at the IRS site: http://www.irs.gov/plain/forms_pubs/index.html |
| RETIREMENT PROGRAM.
Do you have a RETIREMENT PROGRAM in place? If you are self-employed,
it's up to you. Take advantage of the SIMPLE retirement plan.
If you put a plan in place before the end of the year you can
make your contribution up to the due date of your taxes in 1998
and still take the deduction for 1997. Talk to your CPA. |
| TAX IDEA.
If you have a corporation, don't overlook the possibility of leasing
equipment back to your corporation. Lease payments you receive
are not considered wages and therefore, no payroll taxes. Discuss
with your tax advisor. |
| Starting September
1st, the federal MINIMUM WAGE increases to $5.15. |
| TAX IDEA.
If you have a corporation, don't overlook the possibility of leasing
equipment back to your corporation. Lease payments you receive
are not considered wages and therefore, no payroll taxes. Discuss
with your tax advisor. |
| FAX "LEGAL" NOTE.
I'm told that to help ensure that a fax can be used as a legal
document include the words "FAX IS AS ORIGINAL" as part of the
fax. |
| TAX TIP. If
you're self-employed, don't forget to consider a SEP or Keogh
retirement plan which can tax-defer current income. You can establish
a Keogh in a given year up to the last day of the year and you
have until April of the following year to fund it. |
| NEED A LEGAL BUSINESS
FORM? "The Complete Book of Small Business Legal Forms" by
Daniel Sitarz provides a wide variety of forms from contracts
and leases to promissory notes and collection documents. $19.95
or $29.95 with disk. Nova Publishing, 800 462 6420. |
| TAXES. Although
not known for their accuracy (!), the IRS has a recorded information
line including a variety of topics including the new IRA rules.
Call 1 800 829 4477. The regular information line is 1 800 829
1040. |
| SMALL-CLAIMS COURT.
Send for a free handy booklet, "About Taking Legal Action," provided
by the Consumer Information Center, Pueblo, CO 81009. |
| COPYRIGHTS.
Copyright, a form of intellectual property law, protects original
works of authorship including literary, dramatic, musical, and
artistic works such as poetry, novels, movies, songs, computer
software and architecture. Copyright does NOT protect facts, ideas,
systems, or methods of operation, although it may protect the
way these things are expressed. Learn more about copyrights at
http://lcweb.loc.gov/copyright/ |
| TAX TIP. Under
the new tax law, if you're self-employed, you will be able to
deduct health insurance premiums starting at 40% this year and
increasing to 100% in 2007. |
| NOTICE! For
those of you with employee's, don't forget that the minimum wage
has changed and you are required by law to post the new numbers.
($5.15 beginning Sept 1, 97). This info must be "posted" even
if you have one employee and you are paying above the minimum
wage. |
