Tax Savvy for Small Business: Year Round Tax Strategies to Save You Money

by Daily, Frederick W.

• ISBN13: 9780873378321
• ISBN10: 0873378326
• Edition: 6th
• Format: Paperback
• Copyright: 2002-07-01
• Publisher: NOLO PRESS

Summary

Provides small business owners with what they need to know about federal taxes, and explains how to make the best tax decisions, maximize deductions and profits, appeal audit decisions, and stay out of trouble with the IRS.

Author Biography

Frederick W. Daily is an attorney with over 30 years' experience with tax law.

Table of Contents

Introduction to Business Taxes
Taxes for Small Businesses and the Self-Employed	2	(2)
How Tax Law Is Made and Administered-The Short Course	4	(1)
Sources of Tax Law	5	(1)
Marginal Tax Rate and Tax Brackets	6	(1)
The Alternative Minimum Tax (AMT)	7
Part 1: The Basics
Business Income and Tax-Deductible Expenses
How the Tax Code Focuses on Profit	2	(1)
What Is---And Isn't---Income	3	(1)
What Is Tax-Deductible in Business?	4	(1)
Current vs. Capitalized Expenses	5	(1)
Special Deduction Rules	6	(12)
How and Where to Claim Deductions	18	(1)
General Business Credit	19
Writing Off Business Assets
Expenses that Must Be Capitalized	2	(4)
Expensing Business Assets: IRC Section 179	6	(4)
Depreciating Business Assets	10	(7)
Depreciating Some Typical Business Assets	17	(2)
Leasing Instead of Buying Assets	19	(2)
Tax Errors in Depreciation	21	(1)
When You Sell or Stop Using Business Equipment	22
Bookkeeping and Accounting
Why You Need a Bookkeeping System	2	(1)
Should You Hire a Bookkeeper?	3	(1)
Manual or Computer System?	3	(4)
What Kinds of Records to Keep	7	(4)
How Long Records Should Be Kept	11	(1)
Bookkeeping Methods of Tracking income and Expenses	11	(2)
Timing Methods of Accounting: Cash and Accrual	13	(2)
Accounting Periods: Calendar Year or Fiscal Year	15
Business Losses and Failures
Unincorporated Business Losses	2	(3)
Incorporated Business Losses	5
Tax Concerns of Employers
Payroll Taxes	2	(7)
Employee or Independent Contractor?	9	(3)
Misclassifying Employees As Independent Contractors	12	(3)
IRS Filing and Payment Requirements for Employers	15	(1)
Recordkeeping Requirements on Service Providers	16
Part 2: The Structure of Your Business
Sole Proprietorships
Business Expenses	2	(1)
Profits Left in the Business	2	(1)
How Sole Proprietors Report Taxes	3	(4)
Estimated Tax Payments = Pay As You Go	7	(1)
Employment Tax Rules	8	(1)
Recordkeeping	8	(1)
Outgrowing a Sole Proprietorship	9	(1)
Ending the Business	9	(1)
Death and Taxes	9
C Corporations
Types of Corporations	2	(2)
How C Corporations Are Taxed	4	(5)
Tax Benefits of C Corporations	9	(2)
Incorporating Your Business	11	(3)
Issuing IRC § 1244 Stock to Benefit Shareholders If the Business Fails	14	(1)
Taking Money Out of a C Corporation	15	(4)
Tax Pitfalls of C Corporations	19	(1)
Dissolving a C Corporation	19
S Corporations
A An Overview of S Corporations	2	(1)
Should You Choose S Corporation Status?	3	(2)
Tax Reporting for S Corporations	5	(3)
How S Corporation Shareholders Are Taxed	8	(1)
Social Security and Unemployment Taxes	9	(1)
Electing S Corporation Status	9	(3)
Revoking S Corporation Status	12	(1)
Dissolving an S Corporation	13
Partnerships
Partnership Tax Status	3	(1)
Tax Reporting by Partnerships	4	(3)
Tax Obligations of Partners	7	(3)
Partnership Losses	10	(1)
Partnership Contributions	11	(3)
Withdrawals From a Partnership	14	(1)
Partnership Expenses	14	(1)
Selling or Transferring a Partnership Interest	15	(1)
Ending a Partnership	16
Limited Liability Companies
Limited Liability Company Income	2	(1)
Comparing LLCs With Other Entities	3	(1)
Forming and Operating a Limited Liability Company	4	(3)
Terminating a Limited Liability Company	7
Personal Service Corporations
Professional Corporations That Qualify As Personal Service Corporations	2	(1)
Taxation of Personal Service Corporations and Shareholders	3	(1)
Fringe Benefits for Personal Service Corporations	4	(1)
Potential Tax Problems With Personal Service Corporations	5	(1)
Transferring Shares or Dissolving a Personal Service Corporation	5
Part 3: Thinking Small
Family Businesses
The Legal Structure of a Family Business	2	(1)
Income Splitting to Lower Taxes	2	(4)
A Spouse in the Business	6	(1)
Preserving a Family Business	7
Microbusinesses and Home-Based Businesses
Business Expenses Incurred at Home	2	(1)
Deducting Part of the Cost of Your Home	2	(4)
Calculating Your Home Office Deduction	6	(3)
Home Office Tax Recapture When Selling Your Home	9	(1)
A Microbusiness As a Tax Shelter	9	(3)
Estimated Taxes	12
Part 4: Fringe Benefits
Fringe Benefits
How Fringe Benefits Save Taxes	3	(1)
Retirement Benefits	4	(1)
Motor Vehicles	4	(1)
Meals	5	(1)
Travel, Conventions and Lodging	5	(2)
Clubs and Athletic Facilities	7	(1)
Association Dues and Subscriptions	8	(1)
Health Benefits	8	(2)
Day-Care Benefit	10	(1)
Education Benefits	10	(1)
Gifts, Rewards, Discounts and Free Services	11	(1)
Special Benefits for C Corporation Employees	12
Retirement Plans
Tax-Advantaged Retirement Plans	2	(1)
Types of Retirement Plans	3	(1)
Retirement Plans for Sole Proprietors, Partners, S Corporation Shareholders and Limited Liability Company Members	4	(11)
401 (k) Deferred-Compensation Plans for Businesses With Employees	15	(2)
C Corporation Retirement Plans	17	(3)
IRS Problems With Retirement Plans	20	(1)
Taking Money Out of Retirement Plans	21
Part 5: Buying or Selling a Business
Buying a Business
A Buying the Assets of a Business	2	(1)
Buying Shares of Stock	3	(3)
Assigning a Price to Business Assets	6	(2)
State and Local Transfer Taxes	8
Selling a Sole Proprietorship
Selling Assets of a Sole Proprietorship	2	(1)
The Importance of an Arms-Length Deal	3	(1)
How to Protect Yourself From IRS Challenges	4
Part 6: Dealing With the IRS
When You Can't Pay Your Taxes
If You Owe Less Than $25,000	3	(1)
Getting More Time to Pay	3	(1)
Paying in Installments	3	(2)
What to Expect When the IRS Gets Serious	5	(2)
Dealing With a Monster Tax Bill	7	(3)
When the IRS Can Take Your Assets	10
Audits
Who Gets Audited?	3	(2)
How Long Do You Have to Worry About an Audit?	5	(1)
How the IRS Audits Small Businesses	6	(1)
The Auditor's Powers	7	(1)
Should You Get Audit Help?	8	(1)
Preparing for Your Audit	9	(1)
What to Bring to an Audit of Your Small Business	9	(5)
Don't Rush a Field Audit	14	(1)
What Auditors Look for When Examining a Business	15	(1)
How to Behave at an Audit	16	(2)
How to Negotiate With an Auditor	18	(2)
Your Options After Getting an Audit Report	20	(1)
When Your Audit Is Final	21
Appealing IRS Audits
IRS Appeals	2	(3)
Contesting an Audit in Court	5
Penalties and Interest
Common Reasons for Penalties	2	(1)
Interest on Tax Bills	3	(1)
Understanding Penalty and Interest Notices	3	(1)
How to Get Penalties Reduced or Eliminated	4	(2)
How to Get Interest Charges Removed	6	(1)
Designating Payments on Delinquent Tax Bills	7
Help Beyond the Book
Finding Answers to Tax Questions	2	(5)
Finding and Using a Tax Pro	7
Answers to Frequently Asked Tax Questions
Glossary
Appendix
Index