FREQUENTLY ASKED QUESTIONS????? How should I structure my business? Business owners can choose Sole proprietorship, Partnership, Corporation, S-Corporation, or Limited Liability Company. It's important to make sure you understand the requirements, costs, taxation, liability protection, legalities, and what you are trying to accomplish as a business. You also have the option to consult with a professional if you need assistance in deciding which structure best suits your business starting out. What are the benefits of a sole proprietorship? Some of the benefits of having a sole proprietorship are: 1). It is owned and managed by 1 person; 2). Inexpensive & simple to start; 3). There is less paper work to start; 4). There are no annual filings like other busienss structures; 5). In most cases, no business insurance is required. What are the benefits of having an LLC? Some of the benefits of having an LLC are: 1). Your personal assets have more protection in legal suits; 2). Members of an LLC are not "personally" liable for the debts of the business; 3).You are able to establish business credit more easily; 4).You have better credibility as a business; 5). LLCs can have more than one member. 6). LLCs are flexible, meaning, they can be taxed like a sole proprietorship, partnership, or corporation. What is bookkeeping and accounting and why is it important to my business? Bookkeeping is the recording and organization of business transactions, while accounting analyzes & interprets the financial statements. Bookkeeping and accounting assist business owners to make decisions about their business. These are important to every business and this firm offers these services to small business owners. Should I hire an accountant? Absolutely, bookkeepers and accountants help business owners by managing their business activities, so that they are able to focus on the day to day operations. They also assist business owners with making business decisions that benefit their business for future success. They are also aware of the IRS regulations and rules to help business owners maintain tax compliance. What kinds of financing options can I apply for as a business owner? A line of credit, financing for large purchases (such as equipment), loans, grants, and there are also venture capitalist and angel investors that you can work with. What records do I need to retain? It's important that you keep record of purchases, income and any other activities that your business engages in as proof. Reason being is, you are to file a tax return and need proof of your deductions and income. Its also great to adopt a software that keeps track of your business transactions, so that you are able to run reports such as your balance sheet, profit and loss, and cash flow statement. How long do I retain my records? It's great to retain records that support the activities of your business because you may need them in the future. According to the IRS, its recommended to keep records supporting your tax return for 3 years from the date your tax return was filed or 2 years from the date the taxes were paid or you filed to claim a refund or credit. What are estimated taxes? According to the IRS, estimated tax is the method used to pay your taxes on the income not subject to withholding. Income not subject to withholding are self-employment, interest, dividends, rents, and alimony. If your income falls in any one of these categories, then you may need to estimate your taxes. When are estimated taxes due and where do I pay them? Estimated taxes are due April 15, June 15th, Sept. 15th and Jan 15th. You can pay the federal estimated taxes at the follow link. https://www.eftps.gov/eftps/ For PA businesses, you can pay your estimated taxes at the following link. https://mypath.pa.gov/_/ How can I prepare for tax season? Preparing for tax season starts at the beginning of your tax year and ends at the end of your tax year. Once thing business owners can do to prepare for tax season is keeping track of expenses to report as eligible deductions, that are according to the IRS rules and regulations. Consulting with a tax professional can help you save on taxes by providing tax planning services. What are eligible business deductions? Per the IRS, business expenses are the costs of carrying on a trade or business, and they are usually deductible if the business is operated to make a profit. To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your industry. A necessary expense is one that is helpful and appropriate for your trade or business. See more about what business deductions you can claim on your tax return here: https://www.irs.gov/publications/p535 What is tax planning? Tax planning is the process in which you track your business activities that can be reported on your tax return to maximize on eligible credits and deductions. One great benefit of tax planning is to help the business owner see how they can take advantage of maximizing tax deductions and credits to help reduce tax liability. Where can I find the tax returns I filed with the IRS? If you'd like to see all the tax returns filed with the IRS, go to https://www.irs.gov/payments/your-online-account. You will need to create an account. Is Social Security Taxable? Per SSA, if you have income in addition to receiving benefits you may have to pay taxes on benefits. You will pay tax on only 85 percent of your Social Security benefits, based on Internal Revenue Service (IRS) rules. See more at https://www.ssa.gov/benefits/retirement/planner/taxes.html FAQS DISCLAIMER The FAQs are some of the questions that are frequently asked in some (but not all) of the areas in which we practice. The questions and answers are not intended to be exhaustive and do not constitute advice for your particular question, issue or concern, nor do the questions and answers create any client relationship or duty on our part to assist you. The information, however, is intended to be helpful and to get you thinking in a more sophisticated manner about your business issues and possibly will assist you to ask the right questions. Readers should not rely on or take any action based upon the information on this website. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. You should consult a tax, legal, and accounting advisor before engaging in any transaction. The information on this website is public and is not individual advice. While we strive for accuracy, it is possible that the information on our site may contain errors and omissions. We disclaim any liability for any such errors or omissions. Moreover, we encourage you to contact us to dialog further on your issues or areas of interest. Schedule a consultation for an opportunity to obtain guidance in particular to your issue or area of interest.