Small Business Taxes Made Easy, Third Edition

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Acknowledgments

Introduction: A Letter from Eva Rosenberg to You, the Business Owner

Lighten Up

How to Use This Book

1 SMALL BUSINESS CHECKLIST

Three Indicators Will Predict the Success of the Business

So What Do You Need to Do?

The Checklist in To-Do Order

Checklist Resources

2 BUSINESS PLANS YOU KNOW AND TRUST

Chapter 2 Exercise—Create a Business Plan

Why You Need a Business Plan

Real Business—Planned Losses

General Benefits

The Fine Line Between Success and Failure

Exit Plans for Fun and Profit

Let’s Not Fail Due to Success

Outline of a Plan

Rebalancing Your Business Plan for Tax Consequences

Business Plan Books and Resources

3 ENTITIES

Decisions, Decisions, Decisions

What Do You Want to Be When You Grow Up?

Major Issues Related to Entities

Entities, in All Their Glory

A Brief Word About Nevada, Delaware, and Wyoming

Corporations

What About Nonprofits?

Entities We’re Not Discussing

All the Highlights in One Place

Your Big Decision

Entity Resources

4 RECORD KEEPING

Keeping Records Is a Pain!

Types of Accounting Systems

Doing It by Hand

The IRS Says It All

Fiscal Year

Accounting Styles

Records You Must Keep

How Long Should You Keep Records?

Glossary of Bookkeeping Terms

Record-Keeping Resources

5 INCOME

Money In, Money Out, Wave Your Hands All About

A Capital Idea

What Is Income?

Timing of Income

A Brief Note About Accrual Basis

Sales Taxes Received—Are They Your Money?

Income Rarely Reported

The IRS Has a Cash Audit Guide

1099s Your Business Receives

So What the Heck Is Income?

Income Resources

6 COMMON DEDUCTIONS

Rule of Thumb

Universally Deductible

It’s All About You

Mixed-Use Assets

Depreciation

More Deductions Than You Can Imagine

Deduction Resources

7 OFFICE IN HOME

The Song Is Right! Let’s Stay Home

It’s a Red Flag; It’s Just Asking for an Audit

Another At
tractive Change to the Law Affecting

Homeowners Only

Simplify, Simplify

Inner Space

Two Critical Reminders

Prove It, Baby!

What Are Office-in-Home Expenses?

When You Can’t Use Office-in-Home Deductions

Evaluate Your Options

A Final Note—and a Final Story

Office-in-Home Resources

8 VEHICLES: EVERYONE’S FAVORITE DEDUCTION

Deducting Auto Expenses

Should I Lease or Buy?

The Cons of Depreciation

Give Yourself Credit

Vehicle Resources

9 EMPLOYEES AND INDEPENDENT CONTRACTORS

Who Is an Employee?

Protecting Yourself from Independent Contractor Claims

What Are 1099-MISCs?

Payroll and Payroll Taxes

Payroll Across Entities

Hiring Family Members

Paying Payroll

Preparing Payroll: Checks, Journals, Reports

Reporting Payroll

Employee Benefits

Employee Ownership and Stock Options

Summing Up Employees

Employee and Independent Contractor Resources

10 OWNERS’ FRINGE BENEFITS, RETIREMENT,

AND TAX DEFERMENT

Fringe Benefits and Reimbursements

Retirement Plans

Tax-Deferred Opportunities

Using the IRS to Your Advantage

Benefits Resources

11 ESTIMATED PAYMENTS

Estimated Payments Overview

My Short Method

Worst-Case Scenario

Computing Your Estimated Installment Payments

Paying the Tax

Tips to Reduce Penalties for Underpayment of Estimated Tax

Don’t Overpay Your Estimates If You’re in Trouble

Estimated Payment Resources

12 SPECIAL CONSIDERATIONS FOR ONLINE BUSINESSES

WWW = Who, What, Where?

What? I Thought There Was No Internet Tax

Nexus

Internet Sales Tax Issues

Rents and Services—Domestic and Abroad

Legal Issues on the Internet

In the End

Online Business Resources

13 TAX NOTICES, AUDITS, AND COLLECTION NOTES

Dealing with Basic Tax Notices for Individual Returns

IRS Audits

What Will Happen During the Audit?

Negotiating

Audit Reconsiderations, Appeals, and Tax Court:

Some Brief Words

Owing Taxes

How About Filing Bankruptcy?

Summary of IRS Interactions

Tax Notices, Audits, and Collection Notes Resources

Epilogue:

Some Final Words of Advice—and Resources to Rely On

Index