Tax Savvy for Small Business by Attorney Frederick W. Daily -- Read -- Imperial Library of Trantor

Index

Cover Title Copyright Dedication Acknowledgments About the Authors Table of Contents Introduction 1 Tax Basics

How Tax Law Is Made and Administered: The Short Course Where to Find Tax Rules Marginal Tax Rate and Tax Brackets What Is—And Isn’t—Income A Word About Tax Shelters The Alternative Minimum Tax (AMT)

2 Deductible Business Expenses

What Is a Deductible Business Expense? Is It a Current or Future Year Expense? Top Deductions for Businesses The General Business Credit Vehicle Expenses How and Where to Claim Expense Deductions

3 Writing Off Long-Term Business Assets

Tax Treatment of Business Costs The De Minimis Safe Harbor Bonus Depreciation Section 179: Expensing Business Assets Depreciating Business Assets How to Report Depreciation and Section 179 Deductions Inventory Tax Basis of Business Assets Leasing Instead of Buying When You Dispose of Business Assets: Depreciation Recapture Tax Errors in Depreciation

4 Bookkeeping and Accounting

Why You Need a Bookkeeping System Should You Hire a Bookkeeper? Bookkeeping Basics What Kinds of Records to Keep How Long Records Should Be Kept Bookkeeping Methods of Tracking Income and Expenses Timing Methods of Accounting: Cash and Accrual Accounting Periods: Calendar Year or Fiscal Year

5 Business Losses and Failures

Unincorporated Business Losses Incorporated Business Losses

6 Tax Concerns of Employers

Employer Identification Numbers What Are Payroll Taxes? Reporting and Depositing Payroll Taxes Classifying Workers: Employee or Independent Contractor? Misclassifying Employees as Independent Contractors IRS Filing and Payment Requirements for Employers Record Keeping for Your Workers

7 Sole Proprietorships—Solos, Freelancers, and Independent Contractors

What It Means to Be a Solo—From a Tax Perspective To Be or Not to Be—A Solo Solo Income and Expenses Solos’ Tax Forms: Schedule C Is Your Friend What If My Solo Biz Loses Money? How Solos Are Taxed Record Keeping for Solos When a Solo Closes Up Shop Death of a Solo Outgrowing the Solo

8 C Corporations

Types of Corporations How C Corporations Are Taxed Tax Benefits of C Corporations Incorporating Your Business The Importance of Issuing Section 1244 Stock Taking Money Out of a C Corporation Tax Pitfalls of C Corporations Dissolving a C Corporation

9 S Corporations

An Overview of S Corporations Should You Choose S Corporation Status? Tax Reporting for S Corporations How S Corporation Shareholders Are Taxed Social Security and Medicare Taxes Electing S Corporation Status Revoking S Corporation Status Dissolving an S Corporation

10 Partnerships

Partnership Tax Status Tax Reporting Tax Obligations of Partners Partnership Losses Partnership Contributions Getting Money Out of a Partnership Partnership Expenses Selling or Transferring a Partnership Interest Ending a Partnership

11 Limited Liability Companies

Taxes Comparing LLCs With Other Entities Operating Your LLC Terminating an LLC

12 Qualified Personal Service Corporations

Qualified Personal Service Corporations QPSCs and Taxes Fringe Benefits Transferring Shares Dissolving a QPSC

13 Family Businesses

The Legal Structure of a Family Business Income Splitting Lowers Taxes A Spouse in the Business Preserving a Family Business After Death

14 Home-Based Businesses

Business Expenses Incurred at Home The Home Office Deduction Calculating Your Home Office Deduction Safe Harbor Rule for the Home Office Deduction Tax When Selling the Home Office A Home Business as a Tax Shelter

15 Fringe Benefits

How Fringe Benefits Save Taxes Retirement Benefits Motor Vehicles Meals Travel and Lodging Health Benefits Dependent Care Assistance Plan Long-Term Care Insurance Group Term Life Insurance Education Benefits Dues and Subscriptions Driver and Bodyguard Services Retirement Planning Services Gifts, Awards, Discounts, and Free Services Commuter Transportation and Parking Working Condition Fringes De Minimis Benefits Adoption Assistance Job Placement Assistance Cafeteria Plans Disaster Relief Payments to Employees Special Benefits for C Corporation Employees Only

16 Retirement Plans

Advantages of Retirement Plans Overview of Retirement Plan Types Details About Each Type of Retirement Plan Where to Go for a Retirement Plan Potential Tax Problems With Retirement Plans Withdrawing Money From Retirement Plans Closing Your Business or Leaving Your Employer

17 Buying a Business

Buying the Assets of a Business Buying Shares of Stock Assigning a Price to Business Assets State and Local Transfer Taxes

18 Selling or Closing a Sole Proprietorship

Reporting the Sale of a Sole Proprietorship The Importance of an Arm’s-Length Deal How to Protect Yourself From IRS Challenges

19 When You Can’t Pay Your Taxes

Low IRS Priority—Less Than $50,000 Getting More Time to Pay Paying in Installments What to Expect When the IRS Gets Serious Dealing With a Monster Tax Bill When the IRS Can Take Your Assets

20 Audits

Who Gets Audited? How Long Do You Have to Worry About an Audit? How the IRS Audits Small Businesses The Auditor’s Powers Should You Get Audit Help? Preparing for Your Audit What to Bring to an Audit Don’t Rush a Field Audit What an Auditor Looks for When Examining a Business How to Behave at an Audit How to Negotiate With an Auditor Your Options After Getting an Audit Report When Your Audit Is Final

21 Appealing IRS Audits

IRS Appeals Contesting an Audit in Court

22 Penalties and Interest

Common Reasons for Penalties Interest on Tax Bills Understanding Penalty and Interest Notices How to Get Penalties Reduced or Eliminated How to Get Interest Charges Removed Designating Payments on Delinquent Tax Bills

23 Help Beyond the Book

Finding Answers to Tax Questions Finding and Using a Tax Pro

24 Answers to Frequently Asked Tax Questions Glossary Appendix

IRS Publications List Forms Checklist and Due Dates IRS Services Guide (Publication 5136)

Index

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