Ask a CPA

DBA is an acronym for "Doing Business As". It is also known as a Fictitious Name. Most states require that sole proprietorships and partnerships that are conducting business under a name other than the owner(s) must file for a DBA certificate in the county where business is conducted. The DBA certificate is generally obtained at the Clerk of Court of the county in which business will be conducted. Fees are typically between $100 and $225 and most courthouses have records that may be searched to determine if your suggested name will be unique.

Interest Rates for Q1 and Q2 2012 will continue to be charged as follows:
3% for overpayments (2% for corporations)
3% for underpayments
5% for large corporate underpayments
0.5% for the portion of a corporate overpayment in excess of $10k.
Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points. Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points.
The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point. Further, the federal short-term rate that applies during the third month following the taxable year also applies when determining estimated tax underpayments during the first 15 days of the fourth month following the taxable year

Although you purchased a sole proprietorship for 1 amount, that amount must be allocated to the individual assets for depreciation purposes. Allocation is based on the proportion of the sales price to an individual assets fair market value at the time of the sale. Speak to your local CPA about the allocation formulas.

Generally your freelance job will issue you 1099-MISC slips for earnings more than $600.
The gross amount of your freelance jobs should be reported on IRS Schedule C along with the corresponding expenses. The net amount of this business income is subject to Federal tax and Social security taxes.
The federal tax will be calculated on the tax bracket you fall into Also, the net amount of your business multiplied at .9235 multiplied at .133 will equal your social security tax.
If wages exist the social security tax may be reduced.
This calculation is done on IRS Schedule SE.
The net business income will be subject to state tax depending on your state.
Speak to your local CPA about the tax consequences of your freelance job(s).

Yes. Beginning 1/1/11 you must use electronic funds transfer to make all federal tax deposits for employment taxes, corporation tax's and excise taxes. Forms 8109- and 8109-B Federal Tax Deposit Coupons cannot be used after 12/31/10. Generally electronic funds transfers are made using the EFTPS system. If you do not use EFTPS you can arrange for a trusted third party to make deposits on your behalf such as a payroll service or financial institution. To enroll in EFTPS visit www.eftps.gov or call 1-800-555-4477 1-800-555-4477. Speak to your local CPA about assisting you in signing up to the Federal Tax Payment System.

Yes. Beginning 1/1/11 you must use electronic funds transfer to make all federal tax deposits for employment tax's, corporation tax's and excise tax's. Forms 8109- and 8109-B Federal Tax Deposit Coupons can not be used after 12/31/10. Generally electronic funds transfer are made using the EFTPS system. If you do not use EFTPS you can arrange for a trusted third party to make deposits on your behalf such as a payroll service or financial institution. To enroll in EFTPS visit www.eftps.gov or call 1-800-555-4477. Speak to your local CPA about assisting you in signing up to the Federal Tax Payment System.

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.

Most individuals and many sole proprietors with no inventory use the cash method because they find it easier to keep cash method records.
However, if an inventory is necessary to account for your income, you must generally use an accrual method of accounting for sales and purchases. Generally, if you produce, purchase, or sell merchandise in your business, you must keep an inventory and use the accrual method for purchases and sales of merchandise.
However, the following taxpayers can use the cash method of accounting even if they produce, purchase, or sell merchandise. These taxpayers can also account for inventorial items as materials and supplies that are not incidental . A qualifying taxpayer under Revenue Procedure 2001-10 in Internal Revenue Bulletin 2001-2. or A qualifying small business taxpayer under Revenue Procedure 2002-28 in Internal Revenue Bulletin 2002-18. You are a qualifying taxpayer if: Your average annual gross receipts for each prior tax year ending on or after December 17, 1998, is $1 million or less. (Your average annual gross receipts for a tax year is figured by adding the gross receipts for that tax year and the 2 preceding tax years and dividing by 3.)
Your business is not a tax shelter, as defined under section 448(d)(3) of the Internal Revenue Code. You are a qualifying small business taxpayer if: Your average annual gross receipts for each prior tax year ending on or after December 31, 2000, is more than $1 million but not more than $10 million. (Your average annual gross receipts for a tax year is figured by adding the gross receipts for that tax year and the 2 preceding tax years and dividing the total by 3.) You are not prohibited from using the cash method under section 448 of the Internal Revenue Code.
Your principal business activity is an eligible business (described in Publication 538 and Revenue Procedure 2002-28) Business not owned or not in existence for 3 years. If you did not own your business for all of the 3-tax-year period used in figuring your average annual gross receipts, include the period of any predecessor.
If your business has not been in existence for the 3-tax-year period, base your average on the period it has existed including any short tax years, annualizing the short tax year's gross receipts.

No. The use of the standard mileage method is limited to a self-employed individual or an employee who operates an automobile for business purposes. Corporations would not qualify. Partners in a partnership would qualify because they are considered self-employed.

No. The use of the standard mileage method is limited to a self-employed individual or an employee who operates an automobile for business purposes. Corporations would not qualify. Partners in a partnership would qualify because they are considered self-employed.