2. Getting Started Start-Up Costs Hiring Employees Business Use of Home Use of personal vehicle & Travel expenses Estimated Tax Planning Retirement Plan and other benefits Additional Tips Your Own Business
3. Business Structure Employer Identification Number (EIN) Banking Keeping the records & accounting Equipment versus Supplies Getting Started
4. A cost you could deduct if you were already operating an active business; and A cost you incur before the day your active business begins. Will be amortized over 180 months* May elect to deduct up to $5,000 in the first year of business May be able to recover any remaining costs upon disposition of the business Start-Up Costs
5. Analysis or survey of potential markets, products, labor supply, transportation, etc. Advertisements for the opening Wages for employees being trained and their instructors Travel and other necessary costs for securing distributors, suppliers, or customers Consulting or executive fees for professional services If purchasing a business, only the costs for a general search or preliminary investigation Examples of Start-Up costs
6. Employee or contractor? Set up accounts with the state WDOR for withholding DWD for unemployment Workers compensation coverage Employee Benefits Hiring Employees
7. Business Use of Home 1. Your use of the business part of your home must be: Exclusive Regular For your trade or business, AND 2. The business part of your home must be: Principal place of business, OR Where you meet with customers in the course of your business, OR A separate structure
8. Home Business Use Expenses Indirect Expenses: Utilities Real estate taxes Property Insurance Depreciation Direct Expenses: Furnishings Repairs to office Improvements to office Depreciation
9. Use of Personal Vehicle: Written Log Required Actual Expenses: Fuel License Repairs & maintenance Depreciation Insurance Plus Parking & Tolls Standard Mileage Rate: For 2009, 55 cents per mile Plus Parking & Tolls
10. Based on projection of income for the year “Self-employment tax” is like FICA for employees and it is due on net profit Add to income tax to get projected tax liability Law says 90% of estimated or 100% of prior year amount must be paid in by year end. Dates are April 15, June 15, Sept. 14 and Jan. 15 Underpayment Penalty will be assessed Both federal and state estimated tax Estimated Tax Planning
11. Depends on the biz structure If sole-proprietor, start with IRA Health Savings Accounts Medical insurance Life insurance Disability insurance Retirement & Benefit Plans
12. Time is money: Add up your own receipts Do not assume that tax documents you receive are correct, check them! (W-2s and 1099’s) Bring along ALL business expense and income records Get tax planning advice from a tax professional BEFORE the year ends Consult with your tax preparer BEFORE responding to any tax penalty notices Additional Tips
