COMMUNITY TAX SERVICE LLC
  • Home
  • About
  • Community Tax Service
  • Contact

Five Tips for Starting a Business

8/16/2016

Comments

 
Understanding your tax obligation is one key to business success. When you start a business, you need to know about income taxes, payroll taxes and much more. Here are five IRS tax tips that can help you get your business off to a good start:
  1. Business Structure. An early choice you need to make is to decide on the type of structure for your business. The most common types are sole proprietor, partnership and corporation. The type of business you choose will determine which tax forms you file.

  2. Business Taxes.  There are four general types of business taxes. They are income tax, self-employment tax, employment tax and excise tax. In most cases, the types of tax your business pays depends on the type of business structure you set up. You may need to makeestimated tax payments. If you do, you can use IRS Direct Pay to make them. It’s the fast, easy and secure way to pay from your checking or savings account.

  3. Employer Identification Number (EIN).  You may need to get an EINfor federal tax purposes. Search “do you need an EIN” on IRS.gov to find out if you need this number. If you do need one, you can apply for it online.

  4. Accounting Method.  An accounting method is a set of rules that you use to determine when to report income and expenses. You must use a consistent method. The two that are most common are the cash and accrual methods. Under the cash method, you normally report income and deduct expenses in the year that you receive or pay them. Under the accrual method, you generally report income and deduct expenses in the year that you earn or incur them. This is true even if you get the income or pay the expense in a later year.

  5. Employee Health Care.  The Small Business Health Care Tax Credit helps small businesses and tax-exempt organizations pay for health care coverage they offer their employees. You’re eligible for the credit if you have fewer than 25 employees who work full-time, or a combination of full-time and part-time. The maximum credit is 50 percent of premiums paid for small business employers and 35 percent of premiums paid for small tax-exempt employers, such as charities. For more information on your health care responsibilities as an employer, see the Affordable Care Act for Employers page on IRS.gov.
Get all the basics of starting a business on IRS.gov at the Small Business and Self-Employed Tax Center.
IRS Tax Tips provide valuable information throughout the year. IRS.gov offers tax help and info on various topics including common tax scams, taxpayer rightsand more.

​
Comments

Miscellaneous Deductions Can Trim Taxes

8/7/2016

Comments

 
Miscellaneous deductions may reduce your tax bill. These may include certain expenses you paid for in your work if you are an employee. You must itemize deductions when you file to claim these costs. Many taxpayers claim the standard deduction, but you might pay less tax if you itemize. Here are some IRS tax tips you should know about these deductions:
The Two Percent Limit. You can deduct most miscellaneous costs only if their sum is more than two percent of your adjusted gross income. These include expenses such as:
  • Unreimbursed employee expenses.
  • Job search costs for a new job in the same line of work.
  • Tools for your job.
  • Union dues.
  • Work-related travel and transportation.
  • The cost you paid to prepare your tax return. These fees include the cost you paid for tax preparation software. They also include any fee you paid for e-filing of your return.
Deductions Not Subject to the Limit. Some deductions are not subject to the two percent limit. They include:
  • Certain casualty and theft losses. In most cases, this rule is for damaged or stolen property you held for investment. This may include property such as stocks, bonds and works of art.
  • Gambling losses up to the total of your gambling winnings.
  • Losses from Ponzi-type investment schemes.
You can’t deduct some expenses. For example, you can’t deduct personal living or family expenses. Claim allowable miscellaneous deductions on Schedule A, Itemized Deductions. For more about this topic see Publication 529, Miscellaneous Deductions. You can get it on IRS.gov/forms at any time.
IRS Tax Tips provide valuable information throughout the year. IRS.gov offers tax help and info on various topics including common tax scams, taxpayer rightsand more.
Comments

      

      

    Author

    Jessica Clark has over 12 years experience in the accounting industry.

    Archives

    November 2016
    September 2016
    August 2016
    July 2016
    March 2016
    February 2016
    December 2015
    November 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015

    Categories

    All
    Amendment
    IRS Tax Tips
    Tax

    RSS Feed

Picture

Website by The SocialSmith

  • Home
  • About
  • Community Tax Service
  • Contact