Your required business tax issues can be complicated and overwhelming. The first thing you must do is consult your tax professional for all tax questions. This article is not intended to be a complete list of required forms. It is an overview of the most frequently required tax forms and issues you may need. First, you must obtain a federal tax ID online at the IRS website, www.irs.gov.
If you have employees, there are certain tax forms that you must file: Form I-9 verifies that each employee is legally eligible to work in the U.S.; Form W-4 is completed by each employee to indicate their withholding tax; Form W-2: is the Wage and Tax Statement you prepare every year for each employee and give copies to employees and file a report with I.R.S; and Form 1099 must be prepared for payments of $600 or more paid to non-employees in one year such as independent contractors. You give copies to the payee and mail a copy to IRS.
There are other tax forms that you may be required to file if you give your employees bonuses or make certain kinds of sales. Form 1099-MISC is required for prizes or awards of $600 or more or for sales of consumer goods for $5,000 or more to a person who intends to sell the goods retail, but does not conduct the sales in a permanent retail establishment. In addition, you are required to file Form 8300 for cash payments you receive in one transaction that are more than $10,000.
The I.R.S. website, www.irs.gov, has many inexpensive small business products that you can order on line. The publications are: Tax Calendar for Small Businesses and Self-Employed, A Virtual Small business Tax Workshop DVD, Small Business Resource Guide CD, Recognizing Illegal Tax Avoidance Schemes Brochure, and Home-Based Business Tax Avoidance Schemes Brochure. There are numerous small business and self-employed resources offered on the I.R.S. website. There are even small business classes and workshops.
As a business entity, you will have to pay income tax and file a Form 1040 or self-employment tax and file Schedule SE (Form 1040). On behalf of your employees, you will have to withhold from salary and pay to IRS and the state federal and state withholding tax. You will be required to withhold from salary and match the amount from the business’ funds to pay social security and medicare tax. You also must pay federal unemployment tax.
If you sell certain kinds of products or engage in certain business activities, you will be required to pay excise tax. If you sell a product, you will have to pay sales tax usually to the city in which you operate. There are numerous schedules that business entities or self-employed persons are required to file with their 1040. One of the most important is Schedule A which itemizes your business deductions.
You may deduct your business expenses which are the cost of operating a business. If you manufacture products or purchase them for resale, you can deduct the cost of goods sold. The I.R.S website explains how to calculate the deductible cost of goods sold. Other types of business deductions are the expense of using your car in business, salaries and payments to independent contractors, your contribution to employees’ retirement plans, rent expense, insurance, and interest on any business loans. There are additional allowable deductions that you can discuss with your tax professional.
Capital expenses are not deductible. You must capitalize, rather than deduct, some capital costs. These costs are a part of your investment in your business. There are generally three types of costs you capitalize: going into business, business assets, and improvements. You cannot deduct personal expenses. If you use your Home for your business, you can deduct a prorata share of the expenses you incur on your home. You must file a Form 8829 stating you home’s total square feet and the percentage of your home used exclusively for business. The Form 8829 instructions explain how to calculate a deduction for your home office.
Jo Ann Joy, CEO
www.IndigoBusinessSolutions.com, Phone (602) 663-7007
The future of your business starts here.
For more information about these and other important business topics and for legal consultation, please visit our website at http://www.IndigoBusinessSolutions.net Copyright 2006. Indigo Business Solutions is a registered trade name.
Jo Ann Joy is the CEO and owner of Indigo Business Solutions. She has a law degree and an MBA, and an undergraduate degree in Economics. Her background includes commercial and real estate law, accounting, financial planning, mortgages, marketing, product development, budgeting, sales and banking. She ran a successful business for 10 years, and she has written and given presentations on various business subjects.
Posted by admin as Money + Finance at 11:05 AM CDT
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With a good credit rating, you can eliminate high interest debts
with a low rate home equity loan. Borrowing up to 25% of the
value of your home, you don’t have to have equity to qualify for
a second mortgage. With low rates, you can cut your payments as
much as two thirds.
Advantages Of A 125% Home Equity Loan
The prime advantage of a 125% home equity loan is that you can
secure lower rates than what you are paying now on your short
term loans. In reality, you aren’t increasing your debt. Rather
you are trading one rate for another.
With lower rates, you payments immediately shrink. You also have
the option with a home equity loan to keep the same payment, but
take fewer years to pay off your debt, saving you even more in
interest charges.
Financial companies are willing to lend to you based on your
credit history along with the expectation of increasing property
values. Both you and your lender are banking on your home
appreciating.
125% home equity loans are for those who plan to stay in their
home for several years, or at least until their property value
increases significantly. Consolidating your debts with a home
equity loan maximizes your term choices. So loans can be for
five to thirty years, affecting payment and interest size.
Look For The Best Loan Rates
Take the time to look for the best loan rate before signing any
loan contract. Many financial companies now offer 125% home
equity loans, so you should have no problem finding loan quotes
online.
Compare closing costs is as important as rates, since this can
be a hidden expense. By looking at the APR, which calculates
both closing costs and interest, you can find who has the
cheapest loan overall. Your terms will also affect your rates.
The shorter the loan, the lower the rate.
When you have found the right loan, start the application
process immediately to secure quoted rates. With online
applications, you will receive final paperwork in days. Then,
you can have your debts paid off in just a couple of weeks.
Posted by admin as Money + Finance at 11:20 PM CDT
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Consumers who are looking for decent returns on their monies
need look no further than the internet for the best rates.
Online or internet banks are growing in popularity as consumers
discover that they are great sources for offering optimum rates,
customer choice, as well as unmatched convenience. Let’s examine
some of the benefits of banking online.
Great rates. Sure, in this day of low interest rates, 4%
may not sound like a good return on your money, but if you are
currently earning .9% through your local bank’s checking
account, you can open a money market account paying a much
higher rate today. Some online banks have higher minimums than
others, while other internet banks simply allow you to open up
an account for a few dollars and for a period as short as one
year. Even better are those internet banks allowing consumers to
open up daily savings accounts. Many of these online
institutions are currently paying 3.4% or better and you can
make withdrawals from your account at any time without penalties
kicking in.
Ease of use. All internet banks allow for customers to do
their banking from their personal computers. Most have highly
secured sites that require users to take several steps before
accessing their information. This is particularly helpful if you
are concerned about identity theft. The better online banks will
allow for you to hook up your account to your local bank for
easy transfer of funds when you need them. These institutions
offer a variety of savings plans and some provide low cost loans
and mortgages for their customers.
Abundant choices. Many more institutions are now offering
their services online. Some are exclusively online banks, while
others have “brick and mortar” versions of their bank available
to consumers too. ING Direct, EmigrantDirect, MetLifeBank, and
ETrade Bank are some of the most recognized providers of remote
banking services.
Shop around for the bank that is right for you. You can see your
money grow faster and have access to your account at all hours
of the day with an online bank. Internet banking is here to
stay; so what are you waiting for?
Posted by admin as Money + Finance at 4:38 AM CDT
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Buying a car is expensive; there is no getting around that. It’s easy to pay as much for a new car today as one might have paid for a house a generation ago. But they are more complicated than they used to be and they are safer, too. Still, there is the matter of the money, and if you don’t have a lot to spend you may be considering leasing instead of buying. The low monthly payments offered with leases can be appealing, particularly if you are on a budget.
But there is more to leasing a car than just the low payment advertised in the commercial on TV. Anyone who is in the market for a new automobile should consider the pros and cons of leasing a car as opposed to buying one.
Here are some of the good points about leasing a car:
The payments are lower - Sure, the payments are lower; you are only paying for the portion of the car’s value that you are actually using, and not the car itself. The lower payments could help budget-minded shoppers, or they could allow the consumer to make a deal on a more expensive car than he or she might have otherwise purchased.
Less cash outlay - It’s possible in many cases to lease a car with less out of pocket cash than a purchase requires. This could help some shoppers who don’t have a lot of cash for a large down payment.
The drawbacks to leasing include:
Excess mileage fees - The lease spells out how many miles you may drive per year; if you exceed the total over the life of the lease you will have to pay extra. That extra fee could be as much as 25 cents per mile and some leases permit as few as 10,000 miles per year. If you drive a lot and you fail to consider this, you could be paying a lot of extra cash at the end of the contract.
Early termination fee - If you have to end the lease early, the fee charged could be huge. How large? You might have to pay everything owed on the remainder of the contract. Even if you don’t plan to end the contract early, it sometimes happens in the form of auto theft or an accident.
You don’t have a car - This one seems obvious, but with a lease, you don’t actually own a car. When the contract is up, you give it back and you have nothing tangible to show for the money you have paid. You may, of course, purchase the vehicle for an agreed-upon price, but otherwise you will find yourself, once again, without a car to drive.
For some people, the advantages of having a fairly new car all the time makes leasing a good choice. For people who drive a lot or who want to get the most car for their money, buying is probably a better options. Consider the pros and cons carefully in order to decide which method of acquiring transportation works best for you.
©Copyright 2006 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including http://www.LemonLawHelp.net, a site devoted to information regarding auto lemon laws.
Posted by admin as Money + Finance at 1:17 PM CDT
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