Small Business

You must file IRS Form 8300 within 15 days of receipt of more than a $10,000 cash transaction. There are penalties for failure to file Form 8300. Only cash payments require this additional reporting. Cash is money. It is currency and coins of the United States and any other country. Cash is also certain monetary instruments - a cashier’s check, bank draft, traveler’s check, or money order Funds received by check or wire transfers do not apply. Speak to your local CPA about the IRS reporting requirements. You can obtain copies of IRS/FinCEN Form 8300 by: Calling the IRS forms line at (800) 829-3676 : Downloading Form 8300 in English or Spanish: Visiting the FinCEN Web site A business should mail Form 8300 to: Internal Revenue Service Detroit Computing Center, P.O. Box 32621, Detroit, MI 48232

If you have self-employment income, then you can take a deduction for health insurance expenses incurred for yourself, your spouse, and your dependents. If you are reporting a loss from your self-employed activity, then you are not eligible to deduct your health insurance costs since this particular deduction is limited by your self-employment income

Generally, the preliminary costs of investigating and setting up a business are amortized over a 60-month period. Startup expenses are things associated with setting up your business or investigating the purchase of an existing business.
Among the items that count as startup expenses: Doing an analysis of your potential market(s) , Paying for consultants , Buying initial supplies , Advertising your new business , Paying employees before the business opens .
Among the expenses that can qualify as an organizational cost: State incorporation fees , Lawyers' charges for drafting incorporation papers , Initial accounting fees .
For 2011 ONLY, You could have writen off up to $5,000 in business startup costs and another $5,000 in organizational expenses in the year that you start a business. (Note: These deductions are reduced if you have more than $50,000 of either type of expense.) Once you've written off that first $5,000, you can still get a tax benefit from other expenses. However, those startup costs will have to be written off, or amortized, over 15 years.
Depreciate your initial equipment and furniture - the assets you buy for your startup can be written off. However, unlike supplies and other expenses, assets have to be depreciated. There are different rules for different assets. Get a tax benefit for merchandise you first bought for yourself - If you've never used these items for business before, you could depreciate them, based on their value when you started using them in your business. Most office equipment, could be written off over seven years; computers can be deducted over a five-year period.
Whether it makes sense to take as many deductions of business startup costs as you can in the year you start a business depends on individual circumstances. In some cases, owners of startups may prefer to stretch out deductions over several years so that they balance out more evenly against eventual revenue streams. A tax pro can advise you on the best expense- and tax-planning strategies for your own startup venture.

To claim a home office expense you must be able to prove that you use the home area exclusively and on a regular basis. Generally, exclusivity would mean a place of business where you met with clients, customers or patients in the normal course of business. Your home office qualifies on a regular basis if you spend most of your working time there and most of your business income is attributable to the activity there. Business Income may limit your home office deductions. The disallowed amounts may be carried over to future years. Use IRS Form 8829 to claim the home office deduction. Speak to your local CPA about your potential home office deductibility.

No. You can choose not to carry back your NOL. If you make this choice, then you can use your NOL only in the carryforward period. (This choice means you also choose not to carry back any alternative tax NOL.)
To make this choice, attach a statement to your original return filed by the due date (including extensions) for the NOL year. This statement must show that you are choosing to waive the carryback period under section 172(b)(3) of the Internal Revenue Code.
If you filed your return timely but did not file the statement with it, you must file the statement with an amended return for the NOL year within 6 months of the due date of your original return (excluding extensions). Enter “Filed pursuant to section 301.9100-2” at the top of the statement.
Once you choose to waive the carryback period, it generally is irrevocable. If you choose to waive the carryback period for more than one NOL, you must make a separate choice and attach a separate statement for each NOL year.
Speak to your local CPA about the tax strategies invovled and the election form that must accompany the current year's return that caused the net operating loss.

When the general business credit exceeds the limitation in the current year, the excess or unused credit may be carried back 1 year and forward 20 years. Speak to your local CPA about carrying back a unused credit and filing an amended IRS, Form 1040X to claim the current year's unused credit.

From the employer's point of view, it is always better for the worker to be treated as an independent contractor.
The employer can save Social Security taxes, Medicare taxes, workers compensation insurance, disability insurance and unemployment taxes which are all mandatory payroll related expenses.
Employers which have pension and medical benefit insurance plans cannot discriminate and must include virtually all full time employees that meet certain requirements.
For this reason it usually pays to be an employee.
However the truth is, the status of whether one can be properly treated as an independent contractor is not so clear cut.
There is a 20 factor test used to determine ones status.
Please contact a CPA in your area to ascertain how these rules apply to your situation

Yes. The federal penalties are steep.
If an owner treated the worker as an independent contractor but did not file 1099s, the IRS can levy severe penalties against you, including a 3 percent penalty for failure to withhold income tax.
You would also owe the full employer portion of Social Security and Medicare taxes plus 40 percent of the employee's portion, which comes to 8.68 percent for Social Security and 2.03 percent for Medicare.
Please consult with a CPA in your state to determine any state penalties which could be assessed.

Yes. Section 530 of the Internal Revenue Code provides an exclusion that pertains to a worker who is not treated as an employee.
The exclusion mandates that: that the employer never treated the worker as an employee; did not hold out any other worker holding a similar position as an employee; filed form 1099 in a timely fashion for that worker; and had a reasonable basis for treating the worker as an independent contractor.