If you have employees or are thinking of hiring employees, you may be wondering what kind of benefits you can or must offer. This can be a daunting task to think about when you are new to hiring. Benefits can be costly, but may not be as costly or as involved as you have imagined. Most benefits result in a business deduction and therefore reduce the taxes you will ultimately pay. Small businesses, usually those with 50 employees or less, are often not required to offer benefits. Benefits do create an opportunity to retain employees, enhance performance and create a positive comp ..read more

One often overlooked aspect of starting a small business is choosing an accounting system. If you are a business owner, you may have a lot of questions about what accounting system to choose.  There is not one system or option that works for all. Although an accountant might tell you what you should choose, that is only their opinion. It is your business and your choice. Consider the information below and then determine what you think will work best for you.  What is an accounting system? An accounting system is a system that tracks your business transactions, sta ..read more

When you file your taxes you are permitted to take either a standard deduction or you may take an itemized deduction if that is larger. This blog will explain the difference between self-employment vs. income tax, business and personal deductions, and standard vs itemized deductions,  Income tax vs. self-employment  For US federal taxes, we pay two kinds of tax. We pay income tax which is a based on taxable income. Taxable income is your total income earned less deductions such as standard or itemized, deducting self-employed health insurance, traditional IRA contribution, stude ..read more

Dependent care tax benefits are specifically related to the costs of caring for a person who qualifies as your dependent so you can go to work. Your dependent may or may not be your child.  Note that the child and dependent care credit is completely separate from the Child Tax Credit. The child tax credit is available to parents/guardians of minor children, whereas the child and dependent care credit specifically relates to care expenses so a person can work.  Child and dependent care credit The child and dependent care credit is a personal tax credit. This credit is f ..read more

When you first start your business you have a lot to do from generating revenue to marketing to hiring workers. You may not make enough in the very beginning to pay yourself, much less save for retirement. Once your business is established it's time to think bigger picture and part of that includes retirement planning. Once you have reviewed the options below, consider contacting a financial planner who can assess your overall financial picture and create a plan that aligns with your goals. For more information on non-retirement employee benefits, see Employee Benefit ..read more

Small business owners are responsible for maintaining their own skills and qualifications and can also cover educational costs for their employees. Thankfully, education costs even for the business owner can be deducted on taxes, as long as a few criteria are met. Educational expenses can also provide an employee benefit that is not taxable to the employee but deducted for the business.  Educational costs Generally the cost to train an employee to do their work is a deductible expense. However, the IRS is concerned with business owners classifying a personal educational exp ..read more

More than ever, businesses are finding clients or customers in multiple states or having employees who live in multiple states. What this means for taxes can be very confusing for a small business owner.  Overview When you operate a business in multiple states you need to learn some information about operating in the new state to know what the tax impact may be to you and your business. You will need to do some research and it is recommended to consult with an attorney and a tax professional to learn the state laws and rules regarding: Registering your business&n ..read more

You may be working for a company as an independent contractor but do you realize this means you are a business owner? It's important to know if you are working as an independent contractor, you are in fact, a business owner. You can decide if you or the business works for more than one company, if it will have multiple revenue sources, how it is formed and structured and you get to manage it the way you want. You are your own boss! Being a business owner also comes with responsibilities and steps you need to follow to set up your business.  This blog covers what y ..read more

Determining what one owes in federal tax can seem mysterious. Total tax, standard deductions, itemizing, tax credits and deductions... what does it all mean? This blog will explain deductions and credits, including the new rules for the 2021 child tax credit. Types of tax Before we dig into tax deductions and credits it's important to note there are two tax systems in the federal tax structure: 1) income tax and 2) social security and medicare tax. Individual states that collect state income tax also have their own rules for state tax. Federal income tax is a progressive tax, meanin ..read more

If you have recently started a business you may be wondering what you need to know about paying estimated taxes. Read below to learn when to start worrying about them and when they are due.  Most of us are familiar with how tax withholding works when we are an employee. We get a paycheck, the employer withholds some money, we get what is left. When we file our year-end tax return we either get a refund if too much money was taken from our paycheck or we owe extra tax if not enough was withheld. When we are self-employed it is a similar process. Unlike an employee though, we are responsibl ..read more