Hidden tax tips for entrepreneurs

Are you missing tax deductions you’re entitled to? Small business owners, self-employed workers, and independent contractors can write off many legitimate business expenses immediately, reducing the amount of income on which they pay taxes. But if you overlook applicable deductions or fail to keep adequate records that will back up your write-offs during an audit, you give up opportunities to cut your tax bill.

The Schedule C tax form used by sole proprietors to report business profit or loss has 21 line items for business expenses—including such catch-all categories as “office expense,” “supplies,” and “other expenses.” The tax forms for partnerships, LLCs, and S-corps are similarly broad. “It doesn’t even begin to hint at all the things that a business can legitimately deduct,” says Bernard Kamoroff, a certified public accountant and author of 422 Tax Deductions for Businesses & Self Employed Individuals. Don’t expect your accountant to find all the deductions you qualify for—your accountant doesn’t know your spending as intimately as you do.  …more at Hidden Tax Tips for Entrepreneurs – Business Week, published 17 February 2009.

Flickr photo credit: ANATOLI AXELROD

By |2012-01-05T06:45:31+01:00February 23, 2009|Administration & Finance, Blog|0 Comments

The right legal structure for your business

There are many variables to choosing the right business entity, but a good place to start is to prioritize liability issues over tax issues

Q: I’m trying to start an independent record label, and I’m also a piano accompanist. I’d like to combine both those services under one company, but I’m still deciding whether to classify my business as a sole proprietorship or a corporation. Would a corporation provide me with more tax advantages if I earn under a certain amount of income? If I’m more successful in subsequent years, would it be hard to change the legal structure? —E.F., Miami

A: This is a common sticking point for entrepreneurs getting started and there are many factors that go into making the decision. The legal technicalities are complex and the pros and cons can be confusing. You’re best off if you can meet with an attorney who specializes in small business …more from BusinessWeek. Flickr photo credit: College Park Speed and the…’s photostream

By |2012-01-05T06:45:31+01:00January 20, 2009|Administration & Finance, Blog|0 Comments
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