Small Business

If you are incorporated, you are deemed a employee and should be included on a payroll system. S corporation owner shareholders need to take a "reasonable" salary. Only begin a payroll for yourself when you know your business has the cash flow to allow you to regularly and consistently take a check. The amount of your check will be net after withholdings. If you never have had any experience running a business, you definitely need to retain a CPA to advise you about payroll reporting requirements for yourself and your workers. You are personally liable for any payroll taxes you do not pay in a timely fashion or those you fail to report, even if you are incorporated. Some CPAs will recommend a payroll service company.

You must contact the State Department of Taxation where your business is located. Sales tax is a tax charged by various states on the sale of products or services? You must register with that state and every state's rules are different. Contact a CPA in your state to determine your responsibilities. As a business owner always remember, you are personally liable for sales tax not remitted properly, whether you collect it or not. So get yourself a good CPA.

There are many sources of money to start a business. However, realistically borrowing money from traditional sources such as a bank for a small business startup will be based solely on the credit worthiness of the owner of the business. In other words, you will have to sign personally. The SBA and Business Development Center are good places to start inquiring if your credit is good. If your credit is not good, find an angel investor, a friend or family member, to jump start your idea. A CPA quite often can help you find alternative sources of money, traditional and non-traditional.

If you are a sole proprietor or are a involved in a partnership, you are going to need a certificate of doing business and a Federal ID number. The certificate is usually obtained at the county or township hall in the county or township you are doing business. If you are incorporated, the bank will require a copy of your filing receipt or certificate of incorporation, your corporate seal and your Federal ID#. A CPA can obtain your Federal ID number and even incorporate your business for you.

Generally, the value of the employer furnished meals is not taxable to you if furnished on the business premises for the employer's convenience.
Generally, if the meals are furnished during the work period or immediately before or after the work period, then they are not taxable.
If the meals are supplied other than during the work period or immediately before or after the work period (such as on the employees day off) then the value of these meals are taxable.

Sole Proprietors with business expenses less than $5,000, do not have a net loss from the business, use the cash method of accounting,do not have an inventory during the year, have only one business as a sole proprietor, have no employees during the year, are not required to file Depreciation Form 4562, are not required to file Office in Home Form 8829 and have no prior year un-allowed passive losses, may use Schedule C-EZ.

In general, if you use a part of your home for both personal and business purposes, then no expenses for business use of that part are deductible. There are certain exceptions for the storage of inventory or samples used in a business or for qualified day care providers. You should speak to your local CPA about the "office in home" deductions.

The Education Jobs and Medicaid Assistance Act of 2010 signed into law August 10, 2010 repealed the Advance EITC. After December 31, 2010, workers can not receive Advance EITC in their paychecks. Advance EITC is also known as AEITC or AEIC. Workers who received Advance EITC or AEITC on their paychecks need to file a tax return to report the amount received.

Restaurants employing at least 10 people must make a special report to the IRS of income and allocated tips. Generally, the IRS assumes tip income of 8%. The allocated amount is shown on individuals W-2 as tip income.