Small Business

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The surcharge was originally enacted in 1976, and Congress has extended it several times since.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.

An advantage is that it is a way to combine the financial abilities and skills of several different people. Some disadvantages are that the general partners are liable for the actions of the other partners and a partnership is not that easy to get out of. Speak to your local CPA about selecting the best entity for your purposes.

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 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.

Expenses incurred or paid before a business starts operations are considered capital expenses. In recent years up to $5,000 ($10,000 in 2010) of the first 60,000 were able to be elected to be expensed with the balance capitalized over 180 months. There are limitations if the total costs exceed a certain amount. $60,000 in 2010)

Although the 2012 federal minimum wage will remain unchanged at $7.25 per hour, six states have announced that their minimum wage will increase on January 1, 2012.
Arizona: announced a 30-cent per hour increase, from $7.35 to $7.65 per hour; an employer can pay a tipped employee a wage up to $3.00 per hour less than the minimum wage – $4.65 per hour.
Florida: announced a 36-cent per hour increase, from $7.31 to $7.67 per hour; tipped employees must be paid at least $4.65 per hour. The minimum wage was previously increased six cents per hour on June 1, 2011.
Montana: The announced a 30-cent per hour increase, from $7.35 to $7.65 per hour.
Ohio: announced a 30-cent per hour increase, from $7.40 to $7.70 per hour; the minimum wage for tipped employees increases 15 cents per hour, from $3.70 to $3.85 per hour. Additionally, employers can pay the federal minimum wage to minors ages 14 & 15-years old, and adults if the business’s gross revenue is $283,000 per year (previously $271,000).
Oregon: announced a 30-cent per hour increase, from $8.50 to $8.80 per hour.
Washington: announced a 37-cent per hour increase, from to $8.67 to $9.04 per hour.
Missouri: announced that the state minimum wage will remain unchanged at $7.25 per hour.
The rate increases are for the “regular” minimum wage. Under federal minimum wage law, states may permit employers to pay a lower hourly rate, sometimes referred to as a subminimum wage, based on certain factors; examples include age (minors), tips, commissions and employer gross revenue.