Small Business

You may not deduct any part of the standard monthly charge for the first telephone line into your home.
If you have more than one line which is used for business, the costs are fully deductible.
The costs will include phone rentals, business long distance calls, and optional services such as call forwarding and call waiting.
To avoid possible problems with the IRS, it is suggested that you maintain separate business and personal phone lines.

The costs of buying and maintaining clothing that can be considered suitable for street wear are not deductible.
The costs of buying and maintaining Uniforms or work clothes not suitable for street wear are deductible. Uniforms for police or fireman are examples of uniform itemized deductions.

Most new business equipment can be either depreciated over its useful life or expensed immediately under Internal Revenue Code Section 179.
For a tax year beginning in 2012, the Code Sec. 179 expensing election is reduced to $139,000, with a $560,000 investment-based ceiling (down from $500,000/$2 million).
For tax years beginning after 2012, it will be further reduced to $25,000 with a $200,000 investment-based ceiling.
For a tax year beginning after 2011, expensing can no longer be claimed for qualified real property.
Generally qualifying property is:Tangible personal property (such as machines, equipment, furniture). Certain other tangible property used for specific purposes.
Single-purpose agricultural or horticultural structures.Certain storage facilities. Railroad gradings or tunnel bores.

Unlike Social Security, there is no limit on wages or earned income for Medicare purposes. Tax rates under the Medicare program are 1.45 percent for employees and employers and 2.90 percent for self-employed persons

Beginning on January 1, 2012, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be 55.5 cents per mile for business miles driven.
In 2011, the standard mileage rate(s) for 1/1/11-6/30/11 is business = 51 :The standard mileage rate(s) for 7/1/11-12/31/11 is business = 55.5 :

When starting a business, your choice of entity includes: operating as a SOLE PROPRIETORSHIP if you own it by yourself; forming a PARTNERSHIP if there are two or more owners; or being designated as a CORPORATION or a LIMITED LIABILITY COMPANY. Your choice to operate as a corporation involves tax and non-tax considerations which require in-depth analysis of your particular situation and can only be done with a CPA in person. However, generally speaking, a corporation provides protection against personal liability for business obligations and offers the greatest flexibility in terms of ownership and transferability. Most businesses for this reason are incorporated. Further discussions with a CPA are recommended before finalizing your decision.

Payroll taxes include Social Security, Medicare, federal and state taxes that are withheld from an employee's check, as well as the taxes which are due by the employer for having employees.
For example, an employer must match the amount of Social Security and Medicare tax withheld and remit those taxes in a timely manner.

A responsible party which includes the sole shareholder, officer, or authorized signatory is personally liable for the "trust funds".
Trust fund money includes payroll taxes that were withheld from the employees and sales tax which was collected from customers.
Business owners should never spend trust fund money, nor temporarily borrow this money. Business owners get into trouble this way every year.

CPAs which service small businesses usually provide "post facto" payroll services. These include preparing the mandatory quarterly Federal form 941 and state wage reports. Other quarterly reports can also include state unemployment, disability and workers compensation reports.
These reports vary from state to state. CPAs can advise their client as to when tax payments must be made.
Penalties for making payments late can exceed any fee the CPA could charge for these services by thousands of dollars. Penalties for late payment of payroll taxes are extremely harsh. A CPA can advise you as to state and federal payroll requirements that apply to your given situation.
Annual routine audits by the state unemployment agency, the workers compensation and disability insurance company are handled by the CPA.
Some CPAs provide even more extensive day-to-day payroll services for their clients, but most CPAs prefer to work with a payroll service company for their larger clients. These payroll service companies take the responsibility for producing employee checks, withdrawing the money for the government from the client's bank account and making the timely tax payments to the government agencies.