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Small Business needs are many. If you are just starting a business you will find many things you will need here.
Federal Business Forms, State Requirements, Entity Discussions
If you want some personal coaching on your business, e-mail me and we can discuss it.
Federal New Business needs
|
Employer
Identification number on line application Form W-9 |
This is a Federal Form that gives you an employer number. I
suggest you get this even if you do not have employees. Many times
you will need to give this number as a business, or your Social Security
number. I would much rather have this number to give out that my
Social Security number. Fill out the form on line or mail or fax
in. This is free through the Federal Government. Some States
require this to start a business checking account. They will send
you a form shortly after you get this number to inquire about employees.
Just mark on the form you have no employees, if you do not. |
| Estimated Tax Coupon | This coupon is used to pay estimated taxes.
The question is when do you have to start paying estimated taxes.
Remember that the biggest tax you will pay is Self Employment tax.
This tax is basically Social Security and Medicare. It equals out
to about 15.3% of your self employment income. This also means net
income. It is important to keep good records so you can figure
this number. You take your gross income minus your expenses to get
your net income. There are so many factors involved to get to this
number though. Do you have an office in home? Did you make
big purchases during the year for your business? All of these
things are a factor. Please seek professional help in figuring out
if you need to pay this. |
| Quarterly Tax Returns | Quarterly tax returns are for business's that have employees. If you have no employees, you do not need to file these forms. |
Depending on the State you live in you will need to go to the States Department of Revenue to find out what you will need to do. In the State of Oregon you will need to register the business name (DBA). You will need to get a BIN (Business Identification Number) if you have employees.
The best help I can give you on the type of Entity is study and decide carefully. I have listed some pros and cons, but the Small Business Association Website has it stated in a much larger capacity.
| Sole Proprietorship | Files a Schedule C with the personal 1040 form. Eligible for Section 105 Medical Deduction |
| Partnerships | Not hard to form, but Partnership Agreement
should be made between the partners. Files 1065 partnership form Profits flow through to partners income on a K-1 Limited Life, meaning if one of the partners leaves the partnership is dissolved. |
| S- Corp | A tax election only; this election enables the
shareholder to treat the earnings and profits as distributions and have
them pass through directly to their personal tax return. The catch here
is that the shareholder, if working for the company, and if there is a
profit, must pay him/herself wages, and must meet standards of
"reasonable compensation". This can vary by geographical region as well
as occupation, but the basic rule is to pay yourself what you would have
to pay someone to do your job, as long as there is enough profit. If you
do not do this, the IRS can reclassify all of the earnings and profit as
wages, and you will be liable for all of the payroll taxes on the total
amount. |
| C-Corp | A corporation chartered by the state in which
it is headquartered is considered by law to be a unique entity, separate
and apart from those who own it. A corporation can be taxed, it can be
sued, and it can enter into contractual agreements. The owners of a
corporation are its shareholders. The shareholders elect a board of
directors to oversee the major policies and decisions. The corporation
has a life of its own and does not dissolve when ownership changes. |
| LLC |
The LLC is a relatively new type of hybrid business structure that is now permissible in most states. It is designed to provide the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership. Formation is more complex and formal than that of a general partnership. The owners are members, and the duration of the LLC is usually determined when the organization papers are filed. The time limit can be continued, if desired, by a vote of the members at the time of expiration. LLCs must not have more than two of the four characteristics that define corporations: Limited liability to the extent of assets, continuity of life, centralization of management, and free transferability of ownership interests. |