Small Business Taxes Small Business Term Paper

Download this Term Paper in word format (.doc)

Note: Sample below may appear distorted but all corresponding word document files contain proper formatting

Excerpt from Term Paper:

The same goes for business-related periodicals and magazines. (Dratch 2008, p. 2)

Mileage: Once again, this involves careful bookkeeping, but the deductions can add up. Keep a dated log of all business-related mileage, tolls, and parking costs. According to the IRS website, the 2009 IRS deduction rate for business-related mileage was 55 cents per mile.

Travel, Entertainment, and Meals: For the small business, 100% of travel and entertainment expenses are deductible, as well as 50% of meal expenses. It should come as no surprise that these deductions must have supporting documentation showing them to be business-related.

Shelter Your Income

Investment property can be a valuable tax shelter. The IRS allows you to shelter up to $25,000 in an investment property, but there are strict requirements. You must own 10% of the property as an individual owner, not through limited partnership. And you must be involved in the "active management" of the property, meaning you must be able to document your participation in major management decisions. It costs a bit of time, but with today's real estate market, the timing for this strategy may be just right.

Make Your Losses Pay

Many businesses recently have found themselves reporting losses instead of profits. While this is never a position to celebrate, it can have some tax benefits. A taxable loss from the current tax year can be used to offset taxable income from other tax years, both past and future. When these losses are applied to past tax years, they can result in a net refund that would probably be welcome given the circumstances. Any loss left over once it has been applied to past tax years can be used to save you money in the future when your business is once again generating income. (Akasie 2008, para. 8)

Be Environmentally Savvy

The recent Green Revolution could mean more green in you pocket as a small business owner, but it may take some initial investment. Consider installing solar panels and energy efficient equipment. It will save you on out-of-pocket utility expenses, and will make you eligible for some substantial tax breaks. In addition to federal tax incentives, many states offer tax incentives as well. For example, in Georgia, $2.5 billion have been dedicated to a new Clean Energy Property Tax Credit. (Akasie 2008, para.10)

Keep Track of Large Cash Payments

Any cash payments of more than $10,000 must be reported to the IRS on Form 8300 (Akasie 2008, para.15). "Cash" in this case includes traveler's checks, cashiers' checks, and money orders. Careful reporting of these payments will keep you clean of IRS suspicions, but they require detailed recordkeeping. Form 8300 requires the Social Security number of the buyer, so be sure to obtain this information during the transaction. If the buyer is unwilling to provide this information, it is best to avoid the transaction altogether.

Payroll and Self-Employment Taxes

Keeping track of (and paying) payroll withholdings for your employees is crucial to staying out of trouble with the IRS and your state of business. These payroll taxes include Social Security and Medicare, along with federal income tax and any applicable state taxes. The amount withheld is determined by tables according to information given by employees on their W4 forms. Even if you are a sole proprietor, you must pay a payroll tax on yourself.

These withheld taxes MUST be turned over to the IRS on a regular basis, usually monthly. The financial advisor website the Motley Fool claims that "making payments of withheld payroll taxes is the single most important thing for you to do as a business owner" (Fool 2009, para.16). The IRS has been empowered to levy serious consequences against business that divert these funds or fail to collect them.

Keep in mind that your business is responsible for additional taxes on behalf of your employees. Employers are required to match Social Security withholdings for all of their employees, and must pay a Federal unemployment tax for each of them as well.

Works Cited

Akasie, Jay. (2009, Apr. 6). Last Minute Small Business Tax Tips. Retrieved May 29, 2010 from [website]

Dratch, Dana. (2008, Mar. 26). A Dozen Deductions for Your…[continue]

Some Sources Used in Document:


Cite This Term Paper:

"Small Business Taxes Small Business" (2010, May 30) Retrieved December 8, 2016, from

"Small Business Taxes Small Business" 30 May 2010. Web.8 December. 2016. <>

"Small Business Taxes Small Business", 30 May 2010, Accessed.8 December. 2016,

Other Documents Pertaining To This Topic

  • Business Plan the Business That I Am

    Business Plan The business that I am going to start is a small coffee microroastery and shop. The company will perform two basic functions. The first is a product function, the roasting of coffee beans. Green beans will be received by the company, roasted, and then both used in the shop and made available for a variety of retail channels. The second function will be a service function, based on the

  • Business Plan This Business Plan

    The office and administrative expenses would remain constant even to that point, as would the insurance expense. Exhibit B: Cash Flow Statement, Year Two At this point, the business is earning a healthy return and Mr. Ahn is receiving will be able to bring in a reasonable salary. The nature of the business may well change at this point. At the maximum revenue of $144,000 per year the pretax profit would

  • Business Ethics Does Business Have

    One of the criticisms of Broadway is that tickets are too expensive, but to encourage a new generation to enjoy Broadway, many theaters offer scaled prices, including discounts for students. Regarding the sale of 50 tickets for $300 each -- this would depend upon the size of the venue. Some limited exchanges like this could fund more, less well-known groups to come to campus under the umbrella of the activities

  • Business Plan This Business Plan

    The Head Pharmacist has worked as a pharmacist in the area for a long time, including at the small pharmacy in the medical clinic near the hospital where many doctors have their offices. As such, he is well positioned to make contacts with those doctors in order to build the reputation of our pharmacy. Financial Plan The financial plan will begin with the income statement. There are two main revenue streams,

  • Small Company Entry Advantage No

    Role of Commitment in Small Company Entry Advantage The huge contributing factor for the success of any business is how committed and accountable people involved in the business feel. Level of commitment in small companied is usually less because a business is not established until the money generated in the form of profit exceeds the money invested in the business. Till this point is reached, the company is not said to

  • Small Business Banking Start Up

    Video Tape and Disc Rental Rentals Catalog/Mail Order Retailing Health and Personal Care Stores Retailing Table 2: Comparisons of Most Risky Small Business (, cited by Telberg, 2003) An Engine of Economic Growth More and more, Craig, Jackson and Thomson (2007) argue, policymakers perceive the small business sector "as a potential engine of economic growth. Policies to promote small businesses include tax relief, direct subsidies, and indirect subsidies through government lending programs." These authors stress that encouraging lending

  • Tax System of One Country With That

    tax system of one country with that of another is an exercise fraught with dificulties and ultimately doomed to failure . tax system will never be much more than a reflection of strongly national cultures and forces. discuss this statement in the light of your knowledge of comparative tax system in developing and/or developed countries i Tax Systems The following pages focus on analyzing the factors of influence on different countries'

Read Full Term Paper
Copyright 2016 . All Rights Reserved