Anyone starting or thinking of starting a new business should be aware of their federal tax responsibilities. Here are the top seven things the IRS wants you to know if you plan on opening a new business this year.
1. First, you must decide what type of business entity you are going to establish. The type your business takes will determine which tax form you have to file. The most common types of business are the sole proprietorship, partnership, corporation and S corporation.
2. The type of business you operate determines what taxes you must pay and how you pay them. The four general types of business taxes are income tax, self-employment tax, employment tax and excise tax.
3. An Employer Identification Number is used to identify a business entity. Generally, businesses need an EIN. Visit IRS.gov for more information about whether you will need an EIN. You can also apply for an EIN online at IRS.gov.
4. Good records will help you ensure successful operation of your new business. You may choose any recordkeeping system suited to your business that clearly shows your income and expenses. Except in a few cases, the law does not require any special kind of records. However, the business you are in affects the type of records you need to keep for federal tax purposes.
5. Every business taxpayer must figure taxable income on an annual accounting period called a tax year. The calendar year and the fiscal year are the most common tax years used.
6. Each taxpayer must also use a consistent accounting method, which is a set of rules for determining when to report income and expenses. The most commonly used accounting methods are the cash method and an accrual method. Under the cash method, you generally report income in the tax year you receive it and deduct expenses in the tax year you pay them. Under an accrual method, you generally report income in the tax year you earn it and deduct expenses in the tax year you incur them.
7. Visit the Business section of IRS.gov for resources to assist entrepreneurs with starting and operating a new business.
To get the latest IRS news and products and services, subscribe to e-News for Small Businesses on IRS.gov at http://www.irs.gov/businesses/small/article/0,,id=154825,00.html, click “Subscribe Now” at the bottom of the page and enter your e-mail address.
The IRS Small Business and Self-employed Tax Center at http://www.irs.gov/businesses/small/index.html has more information about starting and operating a new business.
Thursday, July 30, 2009
Thursday, July 16, 2009
Washington Small Business Fair 2009
FOR IMMEDIATE RELEASE
Contact: Ron Langley
Washington Dept. of Labor and Industries
Phone: 360-902-4745
E-mail: lanx235@Lni.wa.gov
Contact: Ron Langley
Washington Dept. of Labor and Industries
Phone: 360-902-4745
E-mail: lanx235@Lni.wa.gov
Free business help on everything from money to marketing
Saturday, September 6, 2008
8:00 AM – 4:00 PM
Renton Technical College
3000 NE 4th St. Renton, WA
SEATTLE, Wash., July 7, 2008 – The 12th Annual Washington Small Business Fair is a free event for current and prospective small business owners offering valuable information and counseling from business experts and staff from federal and state government agencies. The Washington Small Business Fair is scheduled Saturday, September 6, 8:00 a.m. to 4:00 p.m. at Renton Technical College, 3000 NE 4th Street, in Renton.
Training and education substantially improve the odds that a small business owner will be among the 65 percent of small firms in Washington that survive their first three years in business. Biz Fair 2008 will provide instant information to help existing and prospective business owners succeed, and connect them with valuable information and resources that will serve them in the long term. Get information and training in one day and one place from local business experts, trade organizations, and government agencies about how to create or expand a small business.
More than 40 seminars will be taught by business professionals on a wide variety of topics, including web site design, business law, financing, marketing, and business planning. The fair is free, with plenty of free parking and no advance registration. Attendees may stay for the entire event or come for part of the day.
Seminar topics and directions to the fair are available at www.bizfair.org. More than 30 government and non-profit organizations, including trade associations and local chambers of commerce will participate, providing a terrific resource and networking opportunity.
“If you are starting a business or want to expand your current business, the Washington Small Business Fair is a must. It will offer solid, practical information and advice you can put to use immediately,” said Kari Gilje, Biz Fair Chair.
On average, 700 people attend the Washington Small Business Fair each year. Participants give Biz Fair high marks for providing small business owners the types of information they need to start or expand their business, for all-in-one-place convenience, and for the high caliber of presentations and range of topics all at a great price – free!
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Saturday, July 11, 2009
American Recovery and Reinvestment Act of 2009 Provides Energy Incentives for Businesses
The American Recovery and Reinvestment Act of 2009 (ARRA) provides a number of energy tax incentives for both small and large businesses. Businesses and individuals who take advantage of these energy-saving steps this year may result see bigger tax savings next year.
Here are some of the major provisions that apply:
1. Extension of Renewable Energy Production Tax Credit: This law extends the "eligibility dates" of a tax credit for business facilities that use wind, closed-loop biomass, open-loop biomass, geothermal energy, municipal solid waste, qualified hydropower and marine and hydrokinetic renewable energy. The "placed in service date" is now Dec. 31, 2012 for wind facilities and Dec. 31, 2013 for the other facilities.
2. Election of Investment Credit in Lieu of Production Credit: Businesses that operate facilities that produce electricity from wind and some other renewable resources after Dec. 31, 2008 can now choose either the energy investment tax credit or the production tax credit.
3. Repeal of Certain Limits on Business Credits for Renewable Energy Property: ARRA repeals the $4,000 limit on the 30 percent tax credit for small wind energy property and the limitation on property financed by subsidized energy financing for property placed in service after Dec. 31, 2008.
4. Coordination with Renewable Energy Grants: Business taxpayers can apply for a grant in lieu of claiming either the energy investment tax credit or the renewable energy production tax credit for property placed in service in 2009 or 2010.
5. Temporary Increase in Credit for Alternative Fuel Vehicle Refueling Property: Qualified property placed in service in 2009 and 2010 is now eligible for a 50 percent credit, and the per-business location limit increases to $50,000. Property relating to hydrogen remains at the 30 percent rate, but the per-business location limit rises to $200,000.
In addition, there are several other energy credits available that small businesses should be aware of, such as:
6. Residential Energy Property Credit: The new law increases the energy tax credit for homeowners who make energy efficient improvements to their existing homes. The new law increases the credit rate to 30 percent of the cost of all qualifying improvements and raises the maximum credit limit to $1,500 for improvements placed in service in 2009 and 2010. The credit applies to improvements such as adding insulation, energy efficient exterior windows and energy-efficient heating and air conditioning systems.
7. Plug-in Electric Drive Vehicle Credit: The new law modifies the credit for qualified plug-in electric drive vehicles purchased after Dec. 31, 2009.
8. Plug-In Electric Vehicle Credit: The new law also creates a special tax credit for two types of plug-in vehicles - certain low-speed electric vehicles and two- or three-wheeled vehicles.
More information on these business energy tax incentives are available on IRS.gov atwww.irs.gov/newsroom/article/0,,id=204335,00.htm. To keep up with ARRA and other IRS tax news, subscribe to e-News for Small Businesses at http://www.irs.gov/businesses/small/article/0,,id=154825,00.html or type in "e-News for Small Businesses " in the search box on IRS.gov and enter.
Here are some of the major provisions that apply:
1. Extension of Renewable Energy Production Tax Credit: This law extends the "eligibility dates" of a tax credit for business facilities that use wind, closed-loop biomass, open-loop biomass, geothermal energy, municipal solid waste, qualified hydropower and marine and hydrokinetic renewable energy. The "placed in service date" is now Dec. 31, 2012 for wind facilities and Dec. 31, 2013 for the other facilities.
2. Election of Investment Credit in Lieu of Production Credit: Businesses that operate facilities that produce electricity from wind and some other renewable resources after Dec. 31, 2008 can now choose either the energy investment tax credit or the production tax credit.
3. Repeal of Certain Limits on Business Credits for Renewable Energy Property: ARRA repeals the $4,000 limit on the 30 percent tax credit for small wind energy property and the limitation on property financed by subsidized energy financing for property placed in service after Dec. 31, 2008.
4. Coordination with Renewable Energy Grants: Business taxpayers can apply for a grant in lieu of claiming either the energy investment tax credit or the renewable energy production tax credit for property placed in service in 2009 or 2010.
5. Temporary Increase in Credit for Alternative Fuel Vehicle Refueling Property: Qualified property placed in service in 2009 and 2010 is now eligible for a 50 percent credit, and the per-business location limit increases to $50,000. Property relating to hydrogen remains at the 30 percent rate, but the per-business location limit rises to $200,000.
In addition, there are several other energy credits available that small businesses should be aware of, such as:
6. Residential Energy Property Credit: The new law increases the energy tax credit for homeowners who make energy efficient improvements to their existing homes. The new law increases the credit rate to 30 percent of the cost of all qualifying improvements and raises the maximum credit limit to $1,500 for improvements placed in service in 2009 and 2010. The credit applies to improvements such as adding insulation, energy efficient exterior windows and energy-efficient heating and air conditioning systems.
7. Plug-in Electric Drive Vehicle Credit: The new law modifies the credit for qualified plug-in electric drive vehicles purchased after Dec. 31, 2009.
8. Plug-In Electric Vehicle Credit: The new law also creates a special tax credit for two types of plug-in vehicles - certain low-speed electric vehicles and two- or three-wheeled vehicles.
More information on these business energy tax incentives are available on IRS.gov atwww.irs.gov/newsroom/article/0,,id=204335,00.htm. To keep up with ARRA and other IRS tax news, subscribe to e-News for Small Businesses at http://www.irs.gov/businesses/small/article/0,,id=154825,00.html or type in "e-News for Small Businesses " in the search box on IRS.gov and enter.
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