BizTaxTalk - Get & Give Tax Help for Small Businesses
Mission: Provide a community where small business owners and professionals can help one another navigate the convoluted tax world for their businesses and themselves.
- The Real Tax Reform Question
The real question of any tax reform should be what is taxable, not what's the tax rate.
On the Colbert Report, Ron Paul said wants to eliminate the income tax and abolish the IRS. Mike Huckabee agrees and want to have a "Fair Tax", or national sales tax.
Would every purchase really be taxable under this "fair tax"? Would a single mother on welfare have to pay 23% sales tax on baby formula? Would you have to pay sales tax on the purchase of your primary residence? The Fair Tax people say yes, but you can see how easy it would be to start saying this or that should be exempt from sales tax. And even in the current form, the tax would exempt purchases for resale and the sale of used items.
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- What business entity did you choose for your company?
What business entity did you choose for your company?: C Corporation S Corporation Partnership Sole Proprietor Limited Liability Company Limited Liability Partnership - Death to Internet Taxes!
C-NET's recent article on internet taxes got my ire up! We already have enough taxes! And, at least in California, we're already required to pay sales tax on tangible items purchased over the internet. (The article incorrectly states paying the taxes is voluntary. The CA Franchise Tax Board and Board of Equalization don't consider it voluntary).
It seems to me the obvious and relatively simple solution is reporting. Business already do a lot of it & you can expect more soon.
Internet sellers of tangible products, like books, would send the equivalent of a 1099 of annual customer purchases over say $100. The only tricky part is businesses would have to report each customer's sales by state. Centralized reporting to the IRS would help make that a lot easier.
The states could then setup matching programs to make sure customers are reporting their sales tax due. You could easily add a provision to exempt reporting by small businesses with sales under a certain amount, say $1 million.
In an increasingly electronic age, it seems a lot better to add reporting than impose a new tax when we already have taxes in place that could be enforced with minimal effort.
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- Treasury Secretary Paulson with his head.....
in the sand. :)
Economy - Wednesday (Investor's Business Daily) - Treasury Sec'y Henry Paulson said steps to make up for the gap between taxes owed and payments received would be too costly. "There is a big part of the tax gap we simply won't be able to reach without adding draconian and painful requirements on all taxpayers," Paulson said. The IRS estimated the gap at $345 bil in '01, and Democrats say it must be closed. [Yahoo Tax]
According to the IRS, a large percentage of the tax gap is due to small businesses that under report income and over report expense. Most of these are honest tax payers who simply don't understand what their tax obligation and rules are.
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- Estimated Taxes for The Ant & The Grasshopper
Every year I see & hear horror stories about estimated tax payment gone wrong. I’m not sure which is worse, the person who didn’t have any idea they needed to make tax payments for both income and self-employment taxes or the person who set aside the money then used it as a down payment on a house, boat or to buy shares in some shady investment scheme.
The problem with estimated payments is not only are they confusing, but the “right” way to make estimated payments depends entirely on your personality and your financial situation.
For instance, if you’re hit with a whopper of a tax bill come April 15th, will you be able to blithely write out a check or will you be in a frozen panic? Does it gall you to get a big refund knowing the US Treasury has had the free use of your money throughout the year? Or is that new sports car irresistible, knowing there’s stash of cash in your savings account, never mind that it’s for your upcoming tax bill?
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- Personal & Small Business Tax & Accounting Services
If you're a small business owner, you know there are never enough hours in the day. You need to grow your business and get new customers, not spend hours paying bills and doing tedious bookkeeping. And those tax returns... forget about it!
What you need is someone who can take care of all this administrivia for you. Someone who can look at the situation of both your business and you personally and advise you on the best approaches to benefit both you and your business.
That's were I come in! I'm an Enrolled Agent so I know about taxes. And I've been a controller for small companies, so I know about the day-to-day trials of managing the money side of a small business.
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- Tax Implications of those E-Bay Auctions
The IRS added a new article to its website, to help those of us who emptied out the garage or storeroom by selling unwanted items on E-Bay or other online auctions. The article outlines the required tax reporting on those sales.
Generally, if you sold personal items for less than you actually paid for it, then you don't have to do anything. :)
But if you sold personal items that appreciated in value have to report any gain. If it's art, antiques or other collectibles you pay the 28% tax rate. Otherwise you'll pay the normal capital gains rates.
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- New Way to Make IRA Contributions
Wouldn't it be great if you could make your tax refund right into your IRA for your annual contribution?
Well, now you can. The IRS now allows you to split your refund into several accounts including an existing IRA account.
To do this you need to file Form 8888 with your return. There are a couple of tricky caveats so be sure to read all the instructions.
For instance the IRA account must already be established. And you must let your financial institution know that the deposit is coming and which year you want it applied to. If you don't designate the deposit as a 2006 contribution it could be treated as a 2007 contribution.
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