Some Tax paying Tips for Small Business Marcellous Curtis
Background Previous lives: Big Firm Mid Firm Government Auditor
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Oper Singer
Agenda ➢Business Entity Options & Taxation for your Small Business Clients ➢Clearing up the Gray Areas in Accounting & Bookkeeping
➢Client Identity Theft & The IRS
Business Entity Types Sole Proprietor
LLC
S-Corp
Tax Return Filed
1040 – Schedule C
1040 - Sch C/Single Member 1065/Multi-Member 1120S/Taxed as S Corp
1120S
What Are Owners Called?
Owner
Member
Shareholder
No
No (Except LLC/SCorp)
Yes
Member Draw (Guaranteed Payments – Partnerships)
Shareholder Distribution And Wages
Yes (Except LLC/SCorp)
No
Owner Must Take Payroll?
How do you get money out?
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Is Net Income Subject to Self-Employment Tax?
Owner Draw
Yes
(SS/Med paid on Wages)
Accounting Gray Areas Wh t is n Expense? Ordin ry – Common nd ccepted in your tr de or business. Necess ry – Helpful nd ppropri te for your business.
How do you Subst nti te n Expense?
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Amount of the expense Time nd Pl ce Business Purpose Business Rel tionship of People Involved
Accounting Gray Areas Me ls & Entert inment Limit tions 50% Limit tions Applies to Employers, Employees, Self-Employed Persons & Clients Tr vel w y from home on business Entert ining Clients Attending
Business Function
L vish/Extr v g nt Expenses
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F ce V lue Limit tion
Accounting Gray Areas Me ls & Entert inment Exceptions 100% Deductible Me l Expenses Comp ny Picnics & Holid y P rties Coffee/Sn cks t of ice Promotion l Food Working Lunch/L te
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100% Deductible Entert inment Expenses?
Me ls & Entert inment Exceptions Club Dues & Membership Fees You cannot deduct dues for any club organized for business, pleasure, recreation, or social purpose. Country Club Golf and Athletic Clubs Airline Clubs
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Hotel Clubs IRS Publication 463
Accounting Gray Areas
Accounting Gray Areas Me ls & Entert inment Exceptions Client Gifts $25 Limit To e ch person per ye r M rried Couples Children of clients
Flowers Gift B skets
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Gift C rds
Accounting Gray Areas Cell Phone No New IRS Guidelines “Old Rule” IRS Code 2011 93 (Sept 14, 2011)
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Re son ble B sis for Deduction
Accounting Gray Areas ➢Home O
ce
(Form 8829)
➢Exclusivity ➢Calculation ➢Deductible Expenses
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300 sq ft limitation
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$5.00/sq ft
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Based upon months used
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➢Real Estate Taxes ➢Mortgage Interest ➢Rent ➢Utilities ➢Insurance ➢Repairs ➢Depreciation
Simpli ed Method for Home O ce
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Limited to Income/Does not rollover
Accounting Gray Areas Automobile St nd rd Deduction (54.0 cents/mile) Actu l Expenses Mile ge Logs Advertising
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IRS Public tion 463
Client Identity Theft and the IRS Public tion 5027 Client F cing .pdf www.IRS.gov/UAC/t xp yer-guide-to-identity-theft
File Police Report File n FTC Compl int Cont ct the Credit Bure us File Form 14039 (Identity Theft Af id vit)
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P per File T x Return
Thank You