Tax Savvy for Small Business

by Attorney Frederick W. Daily

Pages: 352

eBook: (PDF 13 MB)

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Summary

The essential tax-strategy book for entrepreneurs who call themselves "boss."

Named a "Best Tax Book"
by Entrepreneur

Knowing the ins and outs of the tax code is vital to the health of every small business. Virtually every decision a business makes has tax consequences that can affect its bottom line -- and the IRS is always watching.

Tax Savvy for Small Business provides valuable strategies that will free up your time and money for what counts -- running your business, and running it effectively. It explains how to:

deduct current and capitalized expenses
write off up to $108,000 of long-term assets each year
compare different business structures
take advantage of fringe benefits
keep records that will head off trouble with the IRS
get tax breaks from business losses
deal with payroll taxes
negotiate payment plans for late taxes
handle an audit
get IRS penalties and interest reduced
maximize retirement funds
use retirement funds as a tax break

Completely updated, the 10th edition of Tax Savvy for Small Business provides the latest tax breaks, rules, forms and publications. You'll also find a list of the top 25 business deductions – the best deductions to take and how to claim them.

Press Reviews

"A completely invaluable guide... keep this on your bookshelf for future reference. Five stars (we love it)."
Inc.

"This is an extremely valuable book, and you need it on your desk."
Paul Tulenko,
syndicated business columnist

"[One of] the hottest books to help you comply with (and maybe get a refund from) Uncle Sam."
Entrepreneur.com

"The author has more than 20 years experience... Even if you use an accountant, pick up a copy of this book for further understanding and tax management."
Small Business Opportunities

"This plain-English guide will show you how to make the most of your tax-deductions."
BusinessWeek

"Indispensable to the small business person, not just during tax season, but during every season of business. Solid expertise and accessible writing make this one of the best books a small businessperson can own."
Michael Pellechia,

syndicated columnist

"A great investment for any small business owner.... I heartily recommend it."
Ed Martin,

Small Business Information Guide,

About.com.

"When starting your own business, it's important to know that in legal terms, anything you don't know can hurt you.... If you can't afford a lawyer, consider reading... Tax Savvy for Small Business."
Upscale

"[One of the] best resources to get your business growing."
Money Magazine

"Another winner from Nolo..."
Jane Applegate,

syndicated columnist

"Covers new tax breaks, rules, forms and publications relevant to small-business owners."
Reference & Research Book News

"Shows business owners how to make the most of all the rules aimed at encouraging small business."
Accounting Today

I. Introduction

A. Taxes for Small Businesses and the Self-Employed
B. How Tax Law Is Made and Administered: The Short Course
C. Where to Find Tax Rules
D. Marginal Tax Rate and Tax Brackets
E. The Alternative Minimum Tax (AMT)

Part 1: The Basics

1. Deductible Business Expenses and Income

A. What Is a Deductible Business Expense?
B. Is It a Current or Future Year Expense?
C. Top 25 Deductions for Businesses
D. The General Business Credit
E. Vehicle Expenses
F. How and Where to Claim Expense Deductions
G. What Is -- And Isn't -- Income?

2. Writing Off Business Assets

A. When Various Expenses May Be Deducted
B. Section 179: Expensing Business Assets
C. Depreciating Business Assets
D. Tax Basis of Business Assets
E. Leasing Instead of Buying Assets
F. When You Dispose of Business Assets: Depreciation Recapture Tax
G. Tax Errors in Depreciation

3. Bookkeeping and Accounting

A. Why You Need a Bookkeeping System
B. Should You Hire a Bookkeeper?
C. Manual or Computer System?
D. What Kinds of Records to Keep
E. How Long Records Should Be Kept
F. Bookkeeping Methods of Tracking Income and Expenses
G. Timing Methods of Accounting: Cash and Accrual
H. Accounting Periods: Calendar Year or Fiscal Year

4. Business Losses and Failures

A. Unincorporated Business Losses
B. Incorporated Business Losses

5. Tax Concerns of Employers

A. Employer Identification Numbers
B. What Are Payroll Taxes?
C. Reporting and Depositing Payroll Taxes
D. Classifying Workers: Employee or Independent Contractor?
E. Misclassifying Employees as Independent Contractors
F. IRS Filing and Payment Requirements for Employers
G. Record Keeping for Your Workers

Part 2: The Structure of Your Business

6. Sole Proprietorships

A. What It Means to Be a Solo -- From a Tax Perspective
B. To Be or Not to Be -- A Solo
C. Solo Income and Expenses
D. Solos' Tax Forms: Schedule C Is Your Friend
E. What If My Solo Biz Loses Money?
F. How Solos Are Taxed
G. Record Keeping for Solos
H. When a Solo Closes Up Shop
I. Death of a Solo
J. Outgrowing the Solo

7. C Corporations

A. Types of Corporations
B. How C Corporations Are Taxed
C. Tax Benefits of C Corporations
D. Incorporating Your Business
E. The Importance of Issuing Section 1244 Stock
F. Taking Money out of a C Corporation
G. Tax Pitfalls of C Corporations
H. Dissolving a C Corporation

8. S Corporations

A. An Overview of S Corporations
B. Should You Choose S Corporation Status?
C. Tax Reporting for S Corporations
D. How S Corporation Shareholders Are Taxed
E. Social Security and Medicare Taxes
F. Electing S Corporation Status
G. Revoking S Corporation Status
H. Dissolving an S Corporation

9. Partnerships

A. Partnership Tax Status
B. Tax Reporting by Partnerships
C. Tax Obligations of Partners
D. Partnership Losses
E. Partnership Contributions
F. Getting Money out of a Partnership
G. Partnership Expenses
H. Selling or Transferring a Partnership Interest
I. Ending a Partnership

10. Limited Liability Companies

A. Taxes
B. Comparing LLCs With Other Entities
C. The Limited Liability Company (LLC)
D. Terminating a Limited Liability Company

11. Qualified Personal Service Corporations

A. Qualified Personal Service Corporations (QSPCs)
B. QPSCs & Taxes
C. Fringe Benefits
D. Potential Tax Problems
E. Transferring Shares
F. Dissolving a Qualified Personal Service Corporation

Part 3: Thinking Small

12. Family Businesses

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

13. Microbusinesses and Home-Based Businesses

A. Business Expenses Incurred at Home
B. Deducting Part of the Cost of Your Home
C. Calculating Your Home Office Deduction
D. Tax When Selling the Home Office
E. A Microbusiness as a Tax Shelter

Part 4: Fringe Benefits

14. Fringe Benefits

A. How Fringe Benefits Save Taxes
B. Retirement Benefits
C. Motor Vehicles
D. Meals
E. Travel and Lodging
F. Clubs and Athletic Facilities
G. Association Dues and Subscriptions
H. Health Benefits
I. Day Care Benefits
J. Education Benefits
K. Gifts, Rewards, Discounts, and Free Services for Employees
L. Adoption Assistance
M.Special Benefits for C Corporation Employees Only

15. Retirement Plans

A. Advantages of Retirement Plans
B. Overview of Retirement Plan Types
C. Details About Each Type of Retirement Plan
D. Where to Go for a Retirement Plan
E. Potential Tax Problems With Retirement Plans
F. Withdrawing Money From Retirement Plans
G. Closing Your Business and Your Plans

Part 5: Buying or Selling a Business

16. Buying a Business

A. Buying the Assets of a Business
B. Buying Shares of Stock
C. Assigning a Price to Business Assets
D. State and Local Transfer Taxes

17. Selling a Business

A. Reporting the Sale of a Sole Proprietorship
B. The Importance of an Arms-Length Deal
C. How to Protect Yourself From IRS Challenges

Part 6: Dealing With the IRS

18. When You Can't Pay Your Taxes

A. If You Owe Less Than $25,000
B. Getting More Time to Pay
C. Paying in Installments
D. What to Expect When the IRS Gets Serious
E. Dealing With a Monster Tax Bill
F. When the IRS Can Take Your Assets

19. Audits

A. Who Gets Audited?
B. How Long Do You Have to Worry About an Audit?
C. How the IRS Audits Small Businesses
D. The Auditor's Powers
E. Should You Get Audit Help?
F. Preparing for Your Audit
G. What to Bring to an Audit
H. Don't Rush a Field Audit
I. What Auditors Look for When Examining a Business
J. How to Behave at an Audit
K. How to Negotiate With an Auditor
L. Your Options After Getting an Audit Report
M. When Your Audit Is Final

20. Appealing IRS Audits

A. IRS Appeals
B. Contesting an Audit in Court

21. Penalties and Interest

A. Common Reasons for Penalties
B. Interest on Tax Bills
C. Understanding Penalty and Interest Notices
D. How to Get Penalties Reduced or Eliminated
E. How to Get Interest Charges Removed
F. Designating Payments on Delinquent Tax Bills

22. Help Beyond the Book