Business entities are organizations formed to conduct business or engage in a trade. There are multiple business entity types, including corporations (C-Corporations and S-Corporations), limited liability companies (LLCs), partnerships (general partnerships, limited liability limited partnerships, and limited partnerships), and sole proprietorships

Medical bills are tax-deductible if the taxpayer itemizes and does not elect to take the standard the deduction. In 2019, the IRS allowed all taxpayers to deduct the total qualified unreimbursed medical care expenses for the year that exceeds 7.5% of their adjusted gross income. Beginning in 2020, the threshold amount increases to 10% of Adjusted Gross Income (AGI).

The need to make estimated tax payments is solely based on the taxpayer facts and circumstances. If your income is entirely comprised of wages, there will be withholding taxes taken out on your wages, so there should be no need to make quarterly estimated tax payments. If there is material income from other sources and no withholding taxes are taken out, then the need to make estimated tax payments has arisen. Tax projections can be prepared to determine the level of estimated taxes that are necessary for you to make. The quarterly estimated tax payment dates are April 15th, June 15th, September 15th and January 15th of the succeeding calendar year. Insofar as the use of the term “declare my entity”, it is assumed you are referring to the filing of an S corporation election or, a C corporation election. Generally speaking, there is a seventy-five day rule that applies to each tax election. If you want the S -election to be effective from the date the entity was formed (entities are formed at the state level either by filing LLC Articles of Organization and corporate Articles of Incorporation), then you have 75 days from the date of formation to file the appropriate Federal election form. There is late filing relief available for both elections. There are IRS Revenue Procedures issued to cover the requirements for late filing relief. Revenue Proclamation 2013-30 and 2009-41 deal with the S-election and the C election respectively. DO I HAVE TO FILE ESTIMATED TAXES? + DO I NEED TO DECLARE MY ENTITY WITHIN 75 DAYS?

Your net worth is the value of all your assets minus the value of all your liabilities. Assets (cars, homes, boats, cash, investments) are owned by a person or company. Liabilities (credit card debt, student loans) are what a person or company owes. To calculate your net worth, subtract your liabilities from your assets.

Tax deductions help reduce your tax liability from your taxable income. In other words, the amount of income that you are taxed on will be reduced by the deduction. Taxpayers can claim either the Standard Deduction or itemized deduction, whichever is higher, to lower their adjusted gross income (AGI). In 2020, the Standard Deduction for single filers and married filers filing separately are $12,400, married filers filing jointly are $24,800 and heads of household are $18,650. Itemized Deductions comprise a variety of expenses, including expenses for health care that exceed 10% of your AGI, state and local taxes, real estate taxes, home mortgage interest, gifts to charity and casualty and theft losses.

Unless you’re in a sole proprietorship, where the owner is the same individual that operates the business, you’ll choose a business entity that offers the most for your needs. There are a few things that you’ll consider, such as how many people will join your business, if the business will be incorporated, if there will be liability, if there will be taxes as a pass-through or double taxation, or if there are shareholders.

Everyone has their own way to approach starting a new business. However, everyone living in the U.S. is also obligated to align these procedures within the jurisdiction of the state the business is starting in. Business owners must follow federal, state, and local rules. Some simple steps to follow include: 1. Do your research 2. Make a plan 3. Plan your finances 4. Speak to a professional to advise on your plan, business entity, tax election, and more 5. Choose a business structure 6. Pick and register your business name 7. Get licenses and permits 8. Set up the location of your business, or start your website, or both 9. Choose an accounting system 10. Promote your business

The standard deduction is a specific amount of your income that you don’t have to count toward your AGI. People can either claim the standard deduction or itemize. The most beneficial or higher option will be taken, but you cannot do both. The Standard Deduction in 2021 is: $12,550 for single filers and married filers filing separately. $25,100 for married filing jointly. $18,800 for heads of household.

It should be noted that the actual filing of an extension is not necessarily a laborious project because it can be filed electronically. However, an individual return may also require the preparation of tax projections to determine tax Federal and state tax liability due. Obtaining the information and preparing the calculations will take some time, but must be done so a valid extension can be filed. The filing of an extension application for a C corporation may also involve projections and calculations to determine the tax liability, which must be paid upon the filing of the extension, both at the Federal and state level. The tax returns filed by S-Corporations and partnerships are informational returns, so no tax liability exists at the Federal level. The state extensions may require a payment, as this depends on the individual state. As an example, if the estimated payment for the year was not made, the $800 LLC fee should be paid to California upon the filing of the extension.

If you’re in a sole proprietorship, you must file a tax return regardless of whether you had a profit or a loss. For C-Corps, owners must pay taxes once for their salary and again because they are also shareholders. For S-Corps, shareholders that have made a profit or loss must file a tax return. Individually owned LLCs must file tax returns, whether there is a profit or a loss.

The amount of time that small business owners spend on bookkeeping depends on a few factors. Small business owners can have different amounts of transactions to record in their bookkeeping documents, therefore increasing the amount of time allocated for these records. Additionally, how small business owners organize their bookkeeping transactions plays a role in the amount of time spent. On the average, it consumes 10 hours weekly of business owner’s time. The amount of time that small business owners spend on bookkeeping depends on a few factors. Small business owners can have different amounts of transactions to record in their bookkeeping documents, therefore increasing the amount of time allocated for these records,on the other hand, it will require much more time because there are at least two transactions that occur in one purchase. The number of employees at a small business affects how much time owners will spend on bookkeeping. Small business owners with fewer employees will have less bookkeeping duties to complete compared to small business owners with more employees and more transactions to record

The main types of entities are Sole Proprietorship, General Partnership, Limited Partnership, C-Corporation, S-Corporation and Limited Liability Company (LLC). Each of these has different benefits to the taxation of the company. Some feature passthrough taxation, which means that the taxes fro the company “pass-through” to the income tax return(s) of the individual(s) running the business.

The expenses that are deductible on a tax return that is filed to report the activities of a trade or business are defined in the Internal Revenue Code as those expenses that are ordinary, necessary and reasonable for carrying on that trade or business. The types of expenses that one can deduct will depend on the nature of the business being conducted. Expenses could include salaries and payroll taxes, rent telephone, internet and hosting costs, utilities, advertising, certain taxes and licenses, bank charges, office expenses, printing charges, and postage are examples of deductible expenses. If fixed assets are acquired by the business, then depreciation charges to recover the cost of these assets would be deductible. These are examples of deductible expenses but is not an all-inclusive listing

A business plan is a document that you’ll make to guide you through every stage of growing, managing, structuring your business. There are two types of business plans: a lean business plan and a traditional business plan. Lean plans aren’t as standard, but they highlight important elements within businesses. A lean business plan focuses on the following components: key partnerships, key activities, key resources, value proposition, customer relationships, customer segments, channels, cost structure, and revenue streams. Traditional business plans are more common for new businesses and are useful if you plan to seek financing from lenders. Traditional business plans require either some or all of the following: Executive summary Company description Market analysis Organization and management Service or product line, Financial projections, Appendix.

A cash flow statement shows the cash that’s flowing into and out of the company. It helps owners and shareholders understand how cash is being spent and how much cash is still in circulation

A sales funnel is a process used to convert potential customers into customers. A potential customer will go through four phases in the sales funnel process: awareness, interest, decision, and action. The awareness phase comprises a potential customer finding a product, service, or website that you’ve offered that catches their interest. At this stage, the potential customer will learn about the basics of your product, service, or website. The interest phase comprises a more active role in discovery. At this stage, the potential customer will begin searching for a solution to their problem. It is also the stage where what you offer as a business can engage them to become an actual customer. The decision phase occurs when a potential customer decides to invest in your product. They can do so by browsing your website to purchase what you’re offering but not completing the purchase. Finally, the action phase is the point in which a customer invests in your product,

An EIN is a nine-digit number used to identify a business. You’ll need an EIN for all business entities except if you want to operate a sole-proprietorship. You can apply for an EIN by using Form SS-4, Application for Employer Identification Number. You can submit Form SS-4 in several ways, by fax, by mail, telephone (in some instances), or online.

An EIN is a nine-digit number used to identify a business. You’ll need an EIN for all business entities except if you want to operate a sole-proprietorship. You can apply for an EIN by using Form SS-4, Application for Employer Identification Number. You can submit Form SS-4 in several ways, by fax, by mail, telephone (in some instances), or online.

A Limited Liability Company (LLC) is just one of several business structures available. The unique factors are simplicity, pass-through taxation, and the limited liability of a corporation. Unlike a corporation, LLCs are relatively easy to form and maintain with little paperwork. The second most appealing factor is the pass-through taxation. An LLC’s profits go directly to the LLC owners, who then report their share of the profits on their tax returns. As a result, it removed the double taxation found in corporations. The last and more important factor is the legal protection. Provided there is no fraud or criminal behavior, the owners of an LLC are not personally responsible for the LLC’s debts or lawsuits

FUTA is an acronym for the Federal Unemployment Tax Act. FUTA, along with state unemployment, allows employees to receive unemployment benefits and workers’ compensation if employees become unemployed. Employers must pay the FUTA tax by using Form 940. The FUTA tax isn’t a requirement for employees in any business

Form 1040 is the U.S Individual Income Tax Return lead form that is used by individual taxpayers when filing their annual income tax returns with the IRS. The return is due April 15th of the following calendar year. The filing of a timely extension and payment of the appropriate balance due with the extension request will extend the due date of your individual tax return to October 15th.

A W-2 form, also known as the Wage and Tax Statement, is the document an employer is required to send to each of their employees and the Internal Revenue Service (IRS) at the end of the year. The W-2 form reports the employee’s annual wages and the amount of taxes withheld from his or her paychecks. The W-2 forms are typically distributed to employees in the month of January of the following calendar year.