Small Business Sales Tax
The advantages of small business tax deductions appeal to entrepreneurs whether transactions are conducted from the corner of a dining room table or the corner office of a company headquarters. The national Small Business Administration (SBA) doesn't provide a strict definition of which companies are considered in this category or put limitations on the total amount of sales or the number of employees. Some businesses can be quite large and still be included under the auspices of the SBA for receiving government assistance, such as low interest loans, and for tax purposes. Though the actual statute and regulations are more complicated, the simplest criteria are that the company is independently owned and doesn't dominate the particular industry. Whether the company is considered in the SBA category varies according to the industry. An important aspect of running a company is keeping meticulous income and expense records. Equally important is the proper collection of small business sales tax to be remitted to the appropriate state agency.
A benefit of the growth of the Internet has been a proliferation of sole proprietorships and partnerships. The Internet makes it extremely easy for sellers and buyers of goods and services to connect with each other. Online auctions and some other company websites have created an easy way for individuals to open up virtual stores with very little expense. Many people have gotten a start in business by searching through their attics and garages for items to sell at popular auction websites. Improved technologies and security safeguards have increased consumer confidence in making monetary transactions which has further increased the popularity of Internet sales. Jumping on the virtual store bandwagon is a great way for individuals to make extra income without leaving home. The small business tax deductions allowed by the Internal Revenue Service is another incentive for establishing even a small Internet presence. A person who establishes a business, whether online or at a physical location, as a sole proprietorship can usually complete a Schedule C Profit or Loss from Business to include with the other income tax forms. On this form, the sole proprietor adds the totals of various expenses to come up with either a profit or a loss. Though the IRS usually allows a loss for a couple of years (since start-up expenses can be hefty), the agency also provides guidelines for determining whether the venture is a bona fide company or just a hobby. Anyone filing Schedule C should be making legitimate efforts to earn a profit.
Of course, the more complicated the company structure, amount of sales, and number of employees, the more complicated the record-keeping and reporting requirements become. Basically, the IRS allows small business tax deductions that are "ordinary and necessary" for the particular industry. By opening even a tiny sole proprietorship, an entrepreneur can deduct Internet and cell phone costs, office supplies, postage, professional fees (such as for an attorney and an accountant), and other costs of doing business. These are separate from the calculation for the cost of goods sold which will need to be determined when completing Schedule C. Capital expenses are also handled separately and personal expenses do not belong on the form at all. The IRS provides helpful information on its website to assist entrepreneurs in complying with the rules and regulations.
Two areas that can create a great deal of confusion are the legitimacy of a home office deduction and travel expenses. Prospective entrepreneurs may wish to download the following material from the IRS website: Publication 587 Business Use of Your Home and Publication 463 Travel, Entertainment, Gift and Car Expenses. A link is also available to Standard Mileage Rates which can be very beneficial. Being able to deduct the expenses of a home office, which includes a percentage of the monthly mortgage or rent payment and a percentage of the utilities can significantly lower the company's taxable income. It may also subject the tax return to more scrutiny or even trigger an audit. Therefore, it may be prudent to seek a professional opinion from an attorney or accountant when utilizing a home office deduction. This is a good example of a time to heed this advice: "Every prudent man dealeth with knowledge: but a fool layeth open his folly" (Proverbs 13:16). Certainly, it's folly to disregard the tax code, though it is prudent to take advantage of every legitimate deduction offered by the government.
Prudence is also needed when it comes to understanding the small business sales tax. The federal government has not levied a national sales tax, but almost all the fifty states have. The rates vary from state to state and, because of add-ons by counties and municipalities, sometimes even from one locale to the next. For example, the state sales tax rate for the Florida is 6%, but counties may add to that rate. Purchases made in the popular tourist destination city of Orlando are taxed at a 6.5% rate while those made in a neighboring county are taxed at 7%. The entrepreneur will need to educate herself about the requirements of the city, county, and state where she establishes her company. She also may need to know the requirements of other jurisdictions where sales are completed. Her company will be required to collect the appropriate amount of money from her customers and then to pass those funds on to the proper state agencies. Depending on the jurisdictions involved and the amount of sales (both in volume and monetarily), this can become a record-keeping nightmare and may require the services of a trained accountant or, at the very least, a savvy bookkeeper. The entrepreneur not only needs to know when to charge such fees, but also when the law requires a small business sales tax to be paid. The owner can apply for a resale certificate that exempts him from paying sales tax on wholesale items that he plans to resell at a profit.
It's quite possible that there has never been an easier time to startup one's business. Even a tiny venture can provide significant advantages through appropriate use of small business tax deductions. But the entrepreneur needs to be prepared to do homework on the rules and regulations, both in collecting and paying, of the small business sales tax for her jurisdiction and those of her customers.
Payroll Tax Problem HelpMost tax problem resolution issues can be solved by consulting the appropriate resource, whether it be an accountant or legal professionals offering services on line. Assistance can even come in the form of software in a box if the answers needed are simple and straight forward. Payroll professionals will appreciate payroll tax problem help available from consultants on line and in the phone book. Perhaps a call to a fellow business owner would do the trick. However, the more complex the solution that is needed, the more likely it is that the answer will be found at an attorneys office. Tax problem resolution should be taken very seriously, since not dealing with the problem could eventually result in having all a persons assets seized by the government until the debt can be paid.
There are many different problems created when filings are not timely or appropriately completed. Some of these problems are the creation of a lien, audits, levies and even bankruptcy. Each problem needs a separate solution. The best way to go about solving these types of difficulties is to seek out assistance early on. Do not wait until the government is in the room asking questions, or when the professional accountant can go no further to solve the problem. The more time devoted to solving the problem with a legal professional, the more likely it is that a good solution will be found that meets the needs of both parties. When the government notifies someone of an asset seizure, the individual only has thirty days to come up with a solution before action is taken to take the property. This means that not only are physical belongings going to be seized, but so will bank accounts and wages!
Trying to deal with the government without professional representation puts the individual at a distinct disadvantage, because all the knowledge needed regarding tax laws, how to fill out forms, researching laws and cases are not within the reach of the ordinary citizen. Therefore do not think that it will be easy to slide through the situation in a short amount of time. Most likely too much will be offered to the government in settling the situation, or due to improper completion of paperwork, it may be rejected altogether. Receiving notice of a bank levy is even more serious, because the person only has twenty-one days to comply and pay the debt owed. If the money isn't paid, the bank will freeze the bank accounts of the debtor, meaning no money at all will be allowed out of the persons bank account. After that period of time all the account money goes to the government to pay what is owed in back taxes. Find an attorney immediately if this happens! In Biblical times the Romans exacted taxes on the citizens of Rome. Taxes were called a "tribute". "Render therefore to all their dues: tribute to whom tribute is due; custom to whom custom; fear to whom fear; honour to whom honour" (Romans 13:7).
Companies must also be careful to ensure that payroll taxes are paid on time. Payroll tax problem help is available through tax attorneys and can be found in almost any yellow pages in any city. The problem here is similar to that of other types of problems, in that if the forms are not filled out correctly, if the forms are not filed on time or the proper amount of money is not collected, then business owners and employees responsible for the handling of money disbursements will be held liable for paying what is owed. If the payments pile up and are not received, then penalties and interest are levied against the company and then the problem becomes even more serious. Payroll tax problem help can be had almost immediately just by making a phone call to the attorney. Understand what rights can be retained, get the questions answered about who is held responsible and what is liable to be lost.
The payroll money a company is responsible to pay are those taxes withheld from an employees pay check, such as for Social Security and Medicare. These monies are held in trust until it is time to pay them to the government. Therefore, these are referred to as Trust Fund Taxes. Filing the correct forms on time with the correct information is crucial to avoiding a government audit. If ignored, the business could be lost altogether. Attorneys are experienced at litigating business filing problems with the IRS by negotiating compromise situations or payment plans to prevent liquidation of business assets, or levies of owner property. Payroll tax problem help should be sought out as soon as notice of a Trust Fund Tax penalty has been received.
One of the most serious offenses is that of fraud and failure to file. Government investigators looking into these matters are from the criminal investigative division of the Internal Revenue Service. These people will take the non-filer to court and investigate all the finances of the individual in question in an exhaustive manner; until the agents are satisfied that prosecution is or is not necessary. This level of investigation is conducted on three different levels, which is often beneficial to the person under suspicion of fraud, because it allows more opportunity for the attorney to convince the government not to take the issue to court. There will be no stone unturned in cases such as these, so immediately seek out tax problem resolution.
Regardless of the type of situation the individual is in, understanding how serious the issues are is a first step towards finding the right assistance to resolve the issues. Go online or look in the phone book for attorneys or a CPA who understands thoroughly all laws and can successfully argue the case before the government. Otherwise, the next door the person walks through could be the one with metal bars. Payroll tax problem help and other tax problem resolution professionals are ready and waiting to assist anyone who gives them a call. Do not wait until the last moment!