April  2012
* Small Business Help from Smith, Sullivan & Company P.C.


This Month: 
  • Define Your Small (or Medium-Sized) Business  
  • Tax Tips for the Self-Employed
  • Starting a Business? 


  • What type of business are you...or will you be?
    (from businessdictionary.com)

     
    Sole owner of a business; a self-employed person such as a grocer, plumber, or taxi driver. He or she directs the affairs of the enterprise, bears its risks and losses, and takes the profits and benefits.


    A corporation is a firm that meets certain legal requirements to be recognized as having a legal existence, as an entity separate and distinct from its owners. Corporations are owned by their stockholders who share in profits and losses generated through firm's operations.

    In an s corporation a firm's income is passed through its stockholders (shareholders) in proportion of their investment, and taxed at personal income tax rates. S corporations ('S' stands for 'small') can have only one type of stock and only a limited number of stockholders.

    LLC's combine the limited personal liability feature of a corporation with the single taxation feature of a partnership or sole-proprietorship. Its profits and tax benefits are split any way the stockholders/ shareholders (whether individuals or other firms) choose.

    A type of business organization in which two or more individuals pool money, skills, and other resources, and share profit and loss in accordance with terms of the partnership agreement. Partnership participants agree to share risks and rewards proportionately.



    Contact us if you need more information about starting your business or have a small business tax question!



    Tax Tips for the Self-Employed 
     
    There are many benefits that come from being your own boss. If you work for yourself, as an independent contractor, or you carry on a trade or business as a sole proprietor, you are generally considered to be self-employed. Here are six key points the IRS would like you to know about self-employment and self-employment taxes:

    1.   
    Part-time work you do at home in addition to your regular full-time business activities is considered self-employment.


    2.   
    If you are self-employed you usually have to pay self-employment tax as well as income tax. Self-employment tax is a Social Security and Medicare tax primarily for individuals who work for themselves. You figure self-employment tax using a Form 1040 Schedule SE. Also, you can deduct an employer's equivalent portion of your self-employment tax in figuring your adjusted gross income.  


    3.   
    File an IRS Schedule C, Profit or Loss from Business, or C-EZ, Net Profit from Business, with your Form 1040. 


    4.   
    If you are self-employed you may have to make estimated tax payments. This applies even if you also have a full-time or part-time job and your employer withholds taxes from your wages.


    5.   
    You can deduct the costs of running your business.


    6.   
    To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your field of business. A necessary expense is one that is helpful and appropriate for your business. An expense does not have to be indispensable to be considered necessary.


    from IRS link: http://www.irs.gov/newsroom/article/0,,id=252832,00.html 

     Contact us if you have questions about self-employment taxes.



    Starting a Business?  Smith, Sullivan and Company can help you get started.


    We're pro's at:
     
  • Small Business Start-up 
  • Understanding Your Filing Requirements 
  • Tax Planning and Consulting 
  • QuickBooks Training and Support 
  • Ongoing Accounting Support 
  • Tax Preparation Services 
  • Financial Statement Preparation
  • IRS Representation Services
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    Questions? 

    Call us at 508.871.7178 or email: [email protected] 

    or go to:  www.smithsullivancpa.com  

      

      

    At Smith, Sullivan & Company, PC, our dedicated professionals listen to your auditing and accounting, tax preparation, and small business questions. We provide personalized solutions to you and your family, your business or nonprofit, all at a reasonable price.

     

    Our accounting team has extensive experience. We understand your frustration when you tell us that you've paid top dollar for accounting services - only to learn that there's a junior-level person working on your engagement. Or, that it's mid-March and your accountant isn't returning emails or phone calls because your files have been put on the back burner so that they can focus on the tax return crunch. At Smith, Sullivan & Company, PC we only send senior-level accountants into the field and they remain accessible to you throughout the year. A dedicated team is assigned year-round specifically to our nonprofit clients, so that deadlines are met on time and your questions are never ignored.

     

    Established in 1993, Smith, Sullivan & Company, PC is for you if you value communication, one-on-one attention, and "hands-on" expertise from experienced senior-level accountants. Whether you have a project to bid on now, or in the near future, contact us to schedule an introductory meeting, we'd love to meet you!   

     

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