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

by Daily, Frederick

• ISBN13: 9780873375344
• ISBN10: 0873375343
• Edition: 4th
• Format: Paperback
• Copyright: 1999-11-01
• Publisher: NOLO PRESS

Summary

Taxes can leave even the staunchest entrepreneur breathless. Quarterly estimated taxes, payroll taxes, state and local taxes...sometimes it seems that there's little time left for running the business itself. And virtually every business decision you make has tax consequences that can affect your bottom line.

Author Biography

Frederick W. Daily is an attorney with over 30 years' experience with tax law. He is the author of Stand Up to the IRS and Surviving an IRS Tax Audit, both published by Nolo

Table of Contents

I Introduction to Business Taxes
Small Business Taxes	2	(1)
How Tax Law is Made and Administered---The Short Course	3	(1)
Sources of Tax Law	4	(1)
Personal Income Tax Brackets	4	(1)
The Alternative Minimum Tax (AMT)	5
Part 1: The Basics
Business Income and Tax-Deductible Expenses
How the Tax Code Focuses on Profit	2	(1)
What Is Earned Income?	3	(1)
What Is Tax-Deductible in Business?	4	(2)
Current or Capitalized Expense?	6	(1)
Special Deduction Rules	7	(11)
How and Where Deductions Are Claimed	18	(1)
General Business Credit	19
Writing Off Business Assets
Some Expenditures Must Be Capitalized	2	(4)
Expensing Business Assets: IRC Section 179	6	(5)
Depreciating Business Assets	11	(7)
Depreciating Some Typical Business Assets	18	(2)
Leasing Instead of Buying Assets	20	(1)
Tax Errors in Depreciation	21
Recordkeeping 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	(3)
How Long Records Should Be Kept	10	(1)
Bookkeeping Methods of Tracking Income and Expenses	11	(1)
Timing Methods of Accounting: Cash and Accrual	12	(2)
Accounting Periods: Calendar Year or Fiscal Year	14
Business Losses and Failures
Unincorporated Businesses	2	(2)
Corporations	4
Tax Concerns of Employers
Payroll Taxes	2	(7)
Employee or Independent Contractor?	9	(3)
Misclassifying Employees as Independent Contractors	12	(4)
IRS Filing and Payment Requirements for Employers	16	(1)
Recordkeeping Requirements on Service Providers	17
Part 2: The Form of Your Business
Sole Proprietorships
Business Expenses	2	(1)
Profits Left in the Business	3	(1)
How Sole Proprietors Tax-Report	3	(3)
Recordkeeping	6	(1)
Estimated Tax Payments	7	(1)
Employee Taxes	8	(1)
Outgrowing the Sole Proprietorship	8	(1)
Ending the Business	8	(1)
Death and Taxes	9
C Corporations
Types of Taxable Corporations	4	(1)
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
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	(3)
Social Security and Unemployment Taxes	11	(1)
How to Become an S Corporation	11	(1)
Revoking S Corporation Status	12	(1)
Dissolving an S Corporation	13
Partnerships
Partnership Tax Status	3	(1)
Tax Reporting by Partnerships	3	(4)
Tax Reporting for Partners	7	(3)
Partnership Losses	10	(1)
Partnership Contributions	11	(3)
Money Withdrawn From a Partnership	14	(1)
Partnership Expenses	15	(1)
Selling or Transferring a Partnership Interest	15	(2)
Ending a Partnership	17
Limited Liability Companies
Limited Liability Company Income	2	(1)
Comparing LLCs With Other Entities	3	(1)
Forming and Operating a Limited Liability Company	4	(2)
Terminating a Limited Liability Company	6
Personal Service Corporations
Professional Corporations That Qualify as Personal Service Corporations	2	(1)
Taxation of Personal Service Corporations and Shareholders	3	(1)
Special Tax Rules 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: Family Business
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	(3)
Calculating Your Home Office Deduction	5	(3)
Home Office Tax Recapture When Selling Your Home	8	(1)
A Microbusiness as a Tax Shelter	9	(2)
Estimated Tax Rules	11	(1)
Self-Employment (SE) Tax	12
Part 4: Fringe Benefits
Fringe Benefits
How Fringe Benefits Save Taxes	2	(1)
Retirement Benefits	3	(1)
Motor Vehicles	3	(1)
Meals	4	(1)
Travel, Conventions and Lodging	4	(2)
Clubs and Athletic Facilities	6	(1)
Association Dues and Subscriptions	7	(1)
Health Benefits	7	(2)
Dependent Care Assistance Benefit	9	(1)
Education Benefits	9	(1)
Gifts, Rewards, Discounts and Free Services	10	(1)
Special Benefits for C Corporations	11
Retirement Plans
Tax-Advantaged Retirement Plans	2	(1)
Types of Retirement Plans	3	(2)
Retirement Plans for Sole Proprietors, Partners, S Corporation Shareholders and Limited Liability Company Members	5	(9)
401 (k) Deferred-Compensation Plans for Businesses With Employees	14	(2)
C Corporation Retirement Plans	16	(5)
IRS Problems With Retirement Plans	21	(1)
Taking Money Out of Retirement Plans	21
Part 5: Buying or Selling a Business
Buying a Business
Buying the Assets of a Business	2	(1)
Buying Shares of Stock	3	(2)
Assigning a Price to Business Assets	5	(3)
State and Local 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 $10,000	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?	2	(2)
How Long Do You Have to Worry About an Audit?	4	(1)
How the IRS Audits Small Businesses	5	(1)
The Auditor's Powers	6	(1)
Should You Get Audit Help?	7	(1)
Preparing for Your Audit	8	(1)
What to Bring to an Audit of Your Small Business	8	(5)
Don't Rush a Field Audit	13	(1)
What Auditors Look for When Examining a Business	14	(1)
How to Behave at an Audit	15	(2)
How to Negotiate With an Auditor	17	(2)
Your Options After Getting an Audit Report	19	(1)
When Your Audit Is Final	20
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
Glossary
Appendix
Index