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

by Daily, Frederick W.; Laurence, Bethany K.

• ISBN13: 9781413303919
• ISBN10: 1413303919
• Edition: 9th
• Format: Paperback
• Copyright: 2005-10-30
• Publisher: Nolo

Summary

It is possible to run a profitable, honest business while minimizing taxes and staying out of legal trouble. How? This bestseller points the way, detailing year-round tax-saving strategies to help business owners:- claim all legitimate deductions- maximize fringe benefits- keep accurate records- document expenses- survive an audit.

Table of Contents

Introduction
Taxes for Small Businesses and the Self-Employed	p. 2
How Tax Law Is Made and Administered: The Short Course	p. 4
Sources of Tax Law	p. 5
Marginal Tax Rate and Tax Brackets	p. 6
The Alternative Minimum Tax (AMT)	p. 6
The Basics
Deductible Expenses
What Is a Deductible Business Expense?	p. 3
Is It a Current or Future Year Expense?	p. 5
Top 25 Deductions for Businesses	p. 5
Vehicle Expenses	p. 15
How and Where to Claim Expense Deductions	p. 19
What Is-And Isn't-Income?	p. 20
Writing Off Business Assets
When Various Expenses May Be Deducted	p. 3
Section 179: Expensing Business Assets	p. 5
Depreciating Business Assets	p. 8
Tax Basis of Business Assets	p. 15
Leasing Instead of Buying Assets	p. 18
When You Dispose of Business Assets: Depreciation Recapture Tax	p. 20
Tax Errors in Depreciation	p. 21
Bookkeeping and Accounting
Why You Need a Bookkeeping System	p. 2
Should You Hire a Bookkeeper?	p. 3
Manual or Computer System?	p. 3
What Kinds of Records to Keep	p. 7
How Long Records Should Be Kept	p. 11
Bookkeeping Methods of Tracking Income and Expenses	p. 11
Timing Methods of Accounting: Cash and Accrual	p. 12
Accounting Periods: Calendar Year or Fiscal Year	p. 14
Business Losses and Failures
Unincorporated Business Losses	p. 2
Incorporated Business Losses	p. 4
Tax Concerns of Employers
Taxpayer Identification Numbers	p. 2
Payroll Taxes	p. 3
Classifying Workers: Employee or Independent Contractor?	p. 10
Misclassifying Employees as Independent Contractors	p. 13
IRS Filing and Payment Requirements for Employers	p. 16
Record Keeping for Service Providers	p. 17
The Structure of Your Business
Sole Proprietorships
Business Expenses	p. 2
Profits Left in the Business	p. 2
How Sole Proprietors Report Taxes	p. 3
Estimated Tax Payments = Pay as You Go	p. 6
Employment Tax Rules	p. 7
Record Keeping	p. 8
Outgrowing a Sole Proprietorship	p. 8
Ending the Business	p. 9
Death and Taxes	p. 9
C Corporations
Types of Corporations	p. 3
How C Corporations Are Taxed	p. 5
Tax Benefits of C Corporations	p. 10
Incorporating Your Business	p. 11
The Importance of Issuing Section 1244 Stock	p. 15
Taking Money Out of a C Corporation	p. 17
Tax Pitfalls of C Corporations	p. 20
Dissolving a C Corporation	p. 21
S Corporations
An Overview of S Corporations	p. 2
Should You Choose S Corporation Status?	p. 3
Tax Reporting for S Corporations	p. 5
How S Corporation Shareholders Are Taxed on Income	p. 8
Social Security and Medicare Taxes	p. 9
Electing S Corporation Status	p. 9
Revoking S Corporation Status	p. 11
Dissolving an S Corporation	p. 11
Partnerships
Partnership Tax Status	p. 3
Tax Reporting by Partnerships	p. 3
Tax Obligations of Partners	p. 4
Partnership Losses	p. 9
Partnership Contributions	p. 10
Getting Money Out of a Partnership	p. 12
Partnership Expenses	p. 13
Selling or Transferring a Partnership Interest	p. 13
Ending a Partnership	p. 15
Limited Liability Companies
Taxes	p. 2
Comparing LLCs With Other Entities	p. 3
Forming and Operating a Limited Liability Company (LLC)	p. 4
Terminating a Limited Liability Company	p. 6
Personal Service Corporations
Personal Service Corporations	p. 2
Taxes	p. 3
Fringe Benefits	p. 4
Potential Tax Problems	p. 4
Transferring Shares	p. 5
Dissolving a Personal Service Corporation	p. 5
Thinking Small
Family Businesses
The Legal Structure of a Family Business	p. 2
Income Splitting to Lower Taxes	p. 2
A Spouse in the Business	p. 6
Preserving a Family Business After Death	p. 7
Microbusinesses and Home-Based Businesses
Business Expenses Incurred at Home	p. 2
Deducting Part of the Cost of Your Home	p. 2
Calculating Your Home Office Deduction	p. 6
Tax After Selling Your Home	p. 9
A Microbusiness as a Tax Shelter	p. 9
Fringe Benefits
Fringe Benefits
How Fringe Benefits Save Taxes	p. 3
Retirement Benefits	p. 4
Motor Vehicles	p. 4
Meals	p. 5
Travel and Lodging	p. 5
Clubs and Athletic Facilities	p. 8
Association Dues and Subscriptions	p. 8
Health Benefits	p. 8
Day Care Benefit	p. 10
Education Benefits	p. 11
Gifts, Rewards, Discounts, and Free Services for Employees	p. 11
Adoption Assistance	p. 12
Special Benefits for C Corporation Employees Only	p. 13
Retirement Plans
Advantages of Retirement Plans	p. 2
Overview of Retirement Plan Types	p. 3
Details About Each Type of Retirement Plan	p. 4
Where to Go for a Retirement Plan	p. 12
Potential Tax Problems With Retirement Plans	p. 13
Withdrawing Money From Retirement Plans	p. 14
Closing Your Business	p. 16
Buying or Selling a Business
Buying a Business
Buying the Assets of a Business	p. 2
Buying Shares of Stock	p. 3
Assigning a Price to Business Assets	p. 6
State and Local Transfer Taxes	p. 8
Selling a Sole Proprietorship
Selling Assets of a Sole Proprietorship	p. 2
The Importance of an Arms-Length Deal	p. 4
How to Protect Yourself From IRS Challenges	p. 5
Dealing With the IRS
When You Can't Pay Your Taxes
If You Owe Less Than $25,000	p. 3
Getting More Time to Pay	p. 3
Paying in Installments	p. 3
What to Expect When the IRS Gets Serious	p. 5
Dealing With a Monster Tax Bill	p. 7
When the IRS Can Take Your Assets	p. 10
Audits
Who Gets Audited?	p. 3
How Long Do You Have to Worry About an Audit?	p. 5
How the IRS Audits Small Businesses	p. 6
The Auditor's Powers	p. 7
Should You Get Audit Help?	p. 8
Preparing for Your Audit	p. 9
What to Bring to an Audit	p. 9
Don't Rush a Field Audit	p. 14
What Auditors Look for When Examining a Business	p. 14
How to Behave at an Audit	p. 16
How to Negotiate With an Auditor	p. 18
Your Options After Getting an Audit Report	p. 20
When Your Audit Is Final	p. 21
Appealing IRS Audits
IRS Appeals	p. 2
Contesting an Audit in Court	p. 5
Penalties and Interest
Common Reasons for Penalties	p. 2
Interest on Tax Bills	p. 3
Understanding Penalty and Interest Notices	p. 3
How to Get Penalties Reduced or Eliminated	p. 4
How to Get Interest Charges Removed	p. 6
Designating Payments on Delinquent Tax Bills	p. 6
Help Beyond the Book
Finding Answers to Tax Questions	p. 2
Finding and Using a Tax Pro	p. 7
Answers to 25 Frequently Asked Tax Questions
Glossary
Appendix
Form 2553, Election by a Small Business Corporation
Form 4506, Request for Copy of Tax Return
Form 4797, Sales of Business Property
Form 7018, Employer's Order Blank for Forms
Form 8594, Asset Acquisition Statement
Form 8821, Tax Information Authorization
Form 8822', Change of Address
Form SS-4, Application for Employer Identification Number
Form W-4, Employee's Withholding Allowance Certificate
Form W-9, Request for Taxpayer Identification Number and Certification
Form 1040, Schedule SE, Self-Employment Tax
Index
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