The Small Business Tax Help Blog

Posts Tagged ‘business’

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Question: Which EIN to use in EFTPS for single member LLC disregarded entity?

I have a single member LLC – disregarded entity – sole proprietorship. IRS gave me 2 EINs. 1 for the LLC and 1 for the sole proprietorship. I do not run any payroll because I work for myself and I am the only one in my business. I used the Llc EIN when I opened a bank account. However, I do not know which EIN I would use in paying Estimated Tax Payments – for self employment. I was also told that I need to file 940/941 quarterly – but I do not run payroll. What should I do?

Answer: Use the EIN for your LLC.

The IRS, in my opinion, got it wrong for LLC. The intent of congress was obviously to make a corporate-like structure. The IRS considers it a disregarded entity for tax purposes, but the LLC is still paying the employment tax, so use their EIN.

You should be paying yourself on a W-2, not self-employment, and that amount should go on your 941 and 940. You are not self-employed with the LLC.

Question: CPA or CA program?

Firstly, i am from New Zealand studying at Otago Uni.I am doing a Bcom double majoring in accounting and finance. If i want to reach the NZ chartered accounting institute requirements i need to do another 4 accounting/tax/audit papers plus 4 liberal or non-business papers.As it is, my degree will take 4 years(with CA requirements). With CPA australia i don’t really need anything as they take a more practical approach and give mentoring ect. Is one more respected than the other? I know here they have CA firms. Can you work in these with a CPA?

I guess to give me an answer you really need to know what sort of future i want to get into. I guess i’d like to work in NZ for a few years then do some work in places like canada or America especially, or anywhere with good mountains and outdoors.

To sum it up; is CPA known well enough in NZ to do? or is the CA worth spending the extra year at uni to do.

Answer: I’ve just completed all the uni requirements for CA, and am about to sit PCE1 …. so I’ve already gone through the path of thinking which is better to do.

My thoughts:
You can’t practise in NZ without CA.
CPA is an Australian qualification so is great – for Ozzie.
CA is more easily transferable to other countries, IMO.
CPA is more like NZ ACA.

Conclusion: CA is worth the extra effort.

BTW, CA requires mentoring too. (See NZICA website.)

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Question: Can I use receipts that are dated be for my incorporation of my business?

I have been saving receipts since this year for my business. however, I have not inc. it yet but will in the next few weeks. Can I use this receipts for tax purposes come next tax season?
I will incorporate an LLC!

Answer: You can use those receipts for your PERSONAL income tax return, but not for the corporation’s return. See your incorporation attorney for further advice.

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Johnnie A. Fritz Jr., a former Buffalo police officer and car dealer, today was spared a jail term and granted a conditional discharge after prosecutors confirmed he had come up with the nearly $13,000 in sales tax receipts he owed the state.

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Question: How do I find tax information for an Australian Business buying and selling online in France?

I am an Australian Resident, currently living in France with my french husband. I am developing an online store, sourcing and selling within france. I need the business to be registered at my Australian address
as my Temporary Spouse Visa does not allow me to start a business in France, and it also appears to be more beneficial tax-wise.
The business will have a permanent premises in France, a post redistribution centre. I believe this means I will be taxed in france and Australia, but that ATO offers relief on double tax paid?
I need advice on exactly how much tax I should be budgeting for and even if I am even able to start a business under these conditions. How will Securite Sociale be calculated? TVA? (I am having trouble finding a small business accountant who is proficient in Australian and French business accounting.) Any suggestions appreciated.

Thank you in advance

Answer: Hi, Anita.

I work for a Chartered accountant. As far as i am aware you do not need an accountant who is proficient in French business accounting. You just need an accountant who is proficient in Australian business accounting.

The issue to be noted in your scenario is:

1) While living in France, are you earning any income from Australia?

If the above is true then you would have to do your tax returns, which will include your income from france as well as Australia too. By doing this we would be able to ascertain what your annual income is and what portion of it is taxable. Thereafter the income you received from France is again deducted in the deductions colums once your tax liability has been decided.

On the other hand if you have not had any income from australia, you would just need to lodge your returns, with income from france and then again deducting it after your taxable income has been ascertained which means you will not be paying any tax extra tax than what you should be paying in that given scenario.

This system is in place since Tax calculations in france may be diferent to tax calculations in Australia. So say for example the tax free threshold in france is 4000EUR and here in AUS is 6000 then we would calculate it according to 6000AUD and not 4000EUR.

I hope it explains.

Thank you

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Question: When to start paying income tax on self-employment?

Obvious answer is Jan 31st and July 31st!

But if i started self employment on July 2007 am i correct in saying that i return tax forms in 2008 and start paying in Jan 2009 and July 2009 for the tax year 2007-2008

Cheers!!!

Answer: 2008 tax return will be issued in April 2008
You have until 31 January 2009 to file this return
Tax on your income for Year ended 5 April 2008……..that is your income from whatever source from 6 April 2007 to July 2007 and your income from self employment from July 2007 to 5 April 2008………..is payable on 31 January 2009.
If this amounts to more than £500 then you also have to make payments of tax on account for the 2008/09 tax year.
The payments on account for 2008/09 assume that your tax bill for that year will be the same as that for the year to 5 April 2008.
The 1st payment on account for 2008/09 is also due for payment on 31 January 2009.
The 2nd payment on account is due on 31 July 2009.
As an example:
If your tax for the year to 5 April 2008 amounted to say £4,000 then the payments of tax due would be:-
On 31 Jan 2009……….2007/08 tax……£4,000
Plus 1st payt on a/c for 2008/09………£2,000
Total payable 31 Jan 2009………………£6,000
On 31 July 2009 you would have to pay your second payt on a/c for 2008/09……..another £2,000.
The payments on account for 2008/09 are of course taken off your tax bill for 2008/09 and only any remaining balance would have to be paid on 31 Jan 2010 (along with a 1st payt on account for 2009/10)
Hope this helps.

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Schedule SE Self-Employment (Form 1040) Tax return preparation