The Small Business Tax Help Blog

Posts Tagged ‘finance’

If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

In November 2009, the IRS started a new National Research Program Initiative (the Initiative): an industry wide specific random audit of employment taxes for 6,000 entities to encompass the course of the next thirty six months. The scope of the Initiative is dual in nature: First: assess systemic Employment Tax Compliance: and second: collect assessments from delinquent employers.

With tax revenues decreasing from the down economy, the U.S. Treasury Department is increasing its efforts to close the tax gap the difference between the total tax liabilities and taxes paid to the IRS. Auditing employment taxes is seen by the IRS as a crucial means of closing the tax gap. For tax year 2001 for example, the gross tax gap was estimated by the IRS at around $345 billion, with underreporting of employment taxes accounting for around 17% of the tax gap.

The IRS will audit companies to ensure that Federal withholding taxes are deducted and paid over to the government from employees wages for Social Security and Medicare as well as Federal Unemployment taxes. An employer found to be in noncompliance could face harsh civil penalties and interest on unpaid taxes. These fines could have a particularly severe impact on small business owners.

The IRS has prioritized four areas to focus their auditing efforts under the Initiative, including:

Worker Classification: i.e. whether an employer properly classifies an employee as an employee or independent contractor for tax purposes. Determining which depends on the behavioral, financial and type of relationship the company has with the person performing the work.

Employee Fringe Benefits: A fringe benefit is a form of pay for the performance of services. i.e. benefits such as insurance coverage, company car or child care, etc. that are provided by employers tax free to employees but not to independent contractors.

Reimbursed Business Expenses: e.g. reimbursement for taking a client to lunch, purchasing office supplies: which requires a written business expense plan. I.E. You must have paid or incurred expenses that are deductible while performing services as an employee. You must adequately account to your employer for these expenses within a reasonable time period, and you must return any excess reimbursement or allowance within a reasonable time period.

Compensation of Owners who are also employees of the company, whereby unpaid taxes may result in personal liability for the employer.

Since the employment tax audits Initiative has begun, it has been reported that the IRS has already started the process of selecting businesses for audit of their employment taxes. Noncompliance with employment tax law can result in severe repercussions for employers. To ensure that procedures are in place to meet with compliance of applicable tax law can save time, money and distress in the event of an audit.

For example, the Internal Revenue Code requires each employer to properly categorize their Worker classification in order to not only make sure they are in compliance with the tax laws but also be able govern their workers appropriately . Employers should consider consulting with experienced counsel in preparation for the Initiative and in the event of an audit of their employment taxes.

How Mich. gov candidates would handle Business Tax

_Oakland County Sheriff Mike Bouchard: Eliminate the Michigan Business Tax. As a state senator, voted against setting up a board that grants tax credits to encourage businesses to locate or expand in Michigan.

Wealth Of Information For Small Business Tax Savings

Question: Does anyone know any good books for Canadian home business taxes?

I’m looking to start a home based business, but I’m hesitant without proper tax knowledge. If anyone has recommendations, please let me know! Thanks!

Answer: Hello,

There are two things I would add to the above post.

When choosing a professional accountant, you should look for a designated accountant (CGA/CA/CMA). They're the only accountants required to have continuing professional development, liability insurance and who's practices are inspected by their peers on a regular and ongoing basis to ensure a high level of quality service.

Also, most designated accountants will be happy to sit down with you for anywhere between a 1/2 hour to an hour to go over your record keeping with you free of charge. It's part of business development for us. So I'd take advantage of that and get a consultation when you are first starting your business. Perhaps go to two or three different accountants and stick with the one you're most comfortable with.

There are very few books that I've run across that could explain even the basics of proprietorship income taxes without getting overly technical. I really think your best bet is to go visit a professional.

Cheers!

City Workers To Be Docked Back Taxes

Philadelphia city workers who owe back wage, real estate or business taxes will soon see a bite taken out of their paychecks.

Business: The Card Game: Visa Reigns With Silent Tax

I recently saw over 40 highly successful information marketing millionaires, at a series of seminars in London, revealing their secrets to creating wealth. Although each had an inspiring story to tell, they also pointed out that they were just ordinary people. Very often the pressure of debt or other personal challenges had driven them to take a leap of faith. What I learned was the information marketing business is booming, and there are still countless opportunities to make your own fortune. You can do this with little more than a personal computer, and a good idea or two. They key of course is to find that hungry crowd who will buy your stuff. Discovering your niche is often the most elusive aspect. Here are some valuable sources to exploit for free or low cost ideas. 1 Dummies Guides. This highly successful publishing company has a website where you can browse all of the topics they cover. Before committing to any subject, you can be sure that they thoroughly researched the potential for sales. Dummies.com 2 Borders, WH Smith or Barnes and Noble. Go straight to the magazine section and look carefully along the shelves. Here is the place to see hundreds of niches, and buyers of these publications all spend money to regularly to feed their interest. Choose and buy a few and they will be packed with product ideas. Online is Magazines.com 3 Your local Community College. Each year I get a guide to the courses run by my local colleges. Check out the variety of subjects covered.

Mine lists everything from cake decorating, to plumbing and tax saving tips. This is also a great place to find experts to use in your audio, video or E-book product. 4 Inside your own head. It has been said many times, that we all have a skill to teach. We modestly underplay our abilities, so ask your friends to tell you what you could pass on to someone else. Sometimes buddies know more than we do 5 Your most successful friend, neighbour or family member. Is there someone you call on for advice or admire for entrepreneurial spirit? Perhaps they are skilled at a business, sport or hobby? Could they be the star of your project? 6 Junk mail. We all get it and it could be a gold mine. Rather than just dumping, begin to recycle. Not to the bin, but into an ideas file. 7 Healthradio.com. This online radio station covers all kinds of medical topics. It’s not for Doctors, but for people like you and me. Someone once said look for a niche where there’s pain. 8 Hardtofindseminars.com This is a free website with hundreds of audio interview guests talking with owner Michael Senoff about their successes. You’ll start with one, and then work your way through all of them, as you get hooked. 9 Your own bookcase. There might well a hidden treasure here. Perhaps something that you intended to learn or improve yourself with long ago? 10 Early morning radio or TV info-mercials. There’s always a heavyweight expert here paying big bucks to promote something. Take note of the product and sales techniques. “But wait there’s more..” 11 i-Phone apps. Even if you don’t have an I-Phone, you can use Google to see the best selling applications or “Apps” The most popular of these sell hundreds of thousands of copies. Once again, it’s a great source of inspiration. You see where people are spending cash. Use these sources to build a list of possible product ideas. Then do your own research to test the viability. Good luck

Community Calendar

Elm Leaves welcomes items for the Community Calendar as well as items for Business Briefs, Campus News, Community Briefs, School Digest and Newsmakers. Items must be received a minimum of 14 days prior to publication, but earlier is better. E-mail items to oakpark@pioneerlocal.com; fax to (708) 383-3678; or mail to: Pioneer Press, 1010 Lake St., Ste. 104, Oak Park IL …

Tax Tips & Advice : How to Prepare Your Tax Information for Your CPA

A.M. Best Special Report: Underwriting and Investments Drive Improvement in Operating Results

OLDWICK, N.J.—-The U.S. property/casualty industry posted a larger profit in the first nine months of 2009 than for the same period of 2008, driven by improved underwriting results and continued recovery in the investment markets.

And The Oscar Goes To… Al

Government needs to change how it does business, legislators say

A full contingent of Washington state legislators from two local districts addressed about 65 people at a forum on Monday night sponsored by the Port Orchard Chamber of Commerce, calling for a restructuring of government and an increase of support for small businesses.

R&D Tax Credit and Small Businesses – 8