Small Business

Firms and workers file Form SS-8 to request a determination of the status of a worker for purposes of federal employment taxes and income tax withholding.
A Form SS-8 determination may be requested only in order to resolve federal tax matters. If Form SS-8 is submitted for a tax year for which the statute of limitations on the tax return has expired, a determination letter will not be issued.
The statute of limitations expires 3 years from the due date of the tax return or the date filed, whichever is later.
The IRS does not issue a determination letter for proposed transactions or on hypothetical situations.
The IRS may, however, issue an information letter when it is considered appropriate

Employees must report tip income on Form 4070, Employee's Report of Tips to Employer, (PDF) or on a similar statement.
This report is due on the 10th day of the month after the month the tips are received.
This statement must be signed by the employee and must show the employee's name, address, and SSN. Your name and address.
The month or period the report covers. The total tips received. No report is required from an employee for months when tips are less than $20.

If the business has 1 federal Identification number then 1 Form 941 should be filed. Employers with multiple locations or divisions must file one Form 941 per quarter. Filing more than one will cause processing delays and unneeded correspondence.

The IRS reminds employers that the Federal Unemployment Tax Act surcharge of 0.2% expired on June 30, 2011.
This means that the FUTA rate for employers decreased from 6.2% to 6.0% starting on July 1, 2011.
The IRS revised Form 940, Employer’s Annual Federal Unemployment Tax Return, to accommodate the two different rates
The surcharge was originally enacted in 1976, and Congress has extended it several times since. Unemployment benefits are not tied to the surcharge, so the expiration of the surcharge will not affect current or future unemployment benefits.

Some advantages are: it has minimum legal restrictions; and is easy to discontinue. Some disadvantages are: unlimited liability; your income tax cannot be deferred by retaining profits; and you may not bring in new owners or outside capital contributions. Speak to your local CPA to determine the best entity choice for your needs.

Some advantages are: you have limited liability; there are easy ways to transfer ownership; there is a perpetual life and the corporation has the ability to raise capital through the issuance of stock. Some disadvantages include: there is a double taxation of profits; the entity is subject to various state and federal restrictions; and a corporate charter may restrict the types of business activities. Speak to your local CPA to determine the best entity choice to fit your needs.

Some advantages are: there is limited liability; and the entity avoids double taxation of profits as is the case with C Corporations. The profits that are passed through to the shareholders are not subject to SE tax as in a partnership. Some disadvantages are: that the shareholders pay tax on earnings even if they are undistributed; the contributions limits to a qualified retirement plan are based on shareholder/employee wages, not the overall profits as with a Sole proprietorship; and it is less flexible in choosing a tax year.

Some advantages are that it avoids certain S corporation restrictions. It also avoids double taxation of profits. Some disadvantages are that it is currently considered a relatively new business entity with little case law or regulatory law currently available. There is inconsistent treatment from state to state. The entity must have at least 2 owners. Speak to your local CPA about determining the best entity choice to fit your needs.

Investors or lenders often require submission of a written business plan before funding a business. The basic components of a business plan are the cover sheet, table of contents, plan summary, about the company, about the product or services, market analysis, financing, specific project details, ownership and an appendix with miscellaneous information not included in any of the above sections.