Debra A. Simmons, CPA

Archive for the ‘Business Info’ Category

Statement of Information Forms

In Business Info on September 23, 2011 at 11:08 pm

Statements of Information for newly-formed domestic stock corporations must be filed with the California Secretary Of State (SOS) within the first 90 days of filing the Articles of Incorporation and then every year after that in the month of incorporation. Domestic nonprofit corporations must file also within this 90-day period, but subsequent Statements of Information are then filed every two years in the month of incorporation.

Statements of Information for newly-formed LLCs must be filed with the SOS within the first 90 days of filing the Articles of Organization, and then every two years after that in the month of organization or registration. The Statement of Information forms for domestic stock and nonprofit corporations Forms SI-100 and SI-200 may be filled out and submitted online. LLCs must print out Form LLC-12 and mail it to the SOS.

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Tips for Employers Outsourcing Their Payroll

In Business Info on September 2, 2011 at 9:57 pm

Outsourcing payroll duties to third-party service providers can streamline your business operations, but the employer is ultimately responsible for paying federal tax liabilities.

Recent prosecutions of individuals and companies who – acting under the guise of a payroll service provider – have stolen funds intended for payment of employment taxes makes it important that employers who outsource payroll are aware of the following:

1. Employer Responsibility The employer is ultimately responsible for the deposit and payment of federal tax liabilities. Even though you forward the tax payments to the third party to make the tax deposits, you – the employer – are the responsible party.

If the third party fails to make the federal tax payments, the IRS may assess penalties and interest. The employer is liable for all taxes, penalties and interest due. The IRS can also hold you personally liable for certain unpaid federal taxes.

2. Correspondence If there are any issues with an account, the IRS will send correspondence to the address of record. The IRS strongly suggests you do not change the address of record to that of the payroll service provider. That could limit your ability to stay informed of tax matters involving your business.

3. EFTPS Choose a payroll service provider that uses the Electronic Federal Tax Payment System. You can register on the EFTPS system to get your own PIN to verify the payments.

Sales Tax Rate Drops July 1

In Business Info on May 14, 2011 at 4:19 pm

Effective July 1, 2011, the combined statewide sales and use tax rate will decrease from 8.25% to 7.25%. The temporary 1% increase implemented in April 2009 expires June 30, 2011. Remember that district taxes are still applicable, so the tax rates in most areas of California will be greater than 7.25%. For a list of rates as of April 1, 2011, go to http://www.boe.ca.gov/cgi-bin/rates.cgi.

If the governor has his way, rates will increase, but that won’t happen until later this year. So reprogram your cash registers and accounting programs to charge the lower sales tax beginning July 1.

Facts for Mortgage Debt Forgiveness

In Business Info on April 26, 2011 at 6:35 pm

If your mortgage debt is partly or entirely forgiven during tax years 2007 through 2012, you may be able to claim special tax relief and exclude the debt forgiven from your income. Here are 10 facts you should know about Mortgage Debt Forgiveness.

*Normally, debt forgiveness results in taxable income. However, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude up to $2 million of debt forgiven on your principal residence.

*The limit is $1 million for a married person filing a separate return.

*You may exclude debt reduced through mortgage restructuring, as well as mortgage debt forgiven in a foreclosure.

*To qualify, the debt must have been used to buy, build or substantially improve your principal residence and be secured by that residence.

*Refinanced debt proceeds used for the purpose of substantially improving your principal residence also qualify for the exclusion. Proceeds of refinanced debt used for other purposes – for example, to pay off credit card debt – do not qualify for the exclusion.

*If you qualify, claim the special exclusion by filling out Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, and attach it to your federal income tax return for the tax year in which the qualified debt was forgiven.

*Debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the tax relief provision. In some cases, however, other tax relief provisions – such as insolvency – may be applicable. IRS Form 982 provides more details about these provisions.

*If your debt is reduced or eliminated you normally will receive a year-end statement, Form 1099-C, Cancellation of Debt, from your lender. By law, this form must show the amount of debt forgiven and the fair market value of any property foreclosed.

*Examine the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. You should pay particular attention to the amount of debt forgiven in Box 2 as well as the value listed for your home in Box 7.

For more information on mortgage debt forgivenenss, feel free to contact Debbie at (310) 701-1825.

Six Tax Tips for New Business Owners

In Business Info on July 16, 2010 at 4:26 pm

Are you thinking of starting a new business? Here are six tax tips for new business owners to know.

1. First, you must decide what type of business entity you are going to establish. The type of business entity will determine which tax form you have to file. The most common types of business are the sole proprietorship, partnership, corporation and S corporation.

2. The type of business you operate determines what taxes you must pay and how you pay them. The four general types of business taxes are income tax, self-employment tax, employment tax and excise tax.

3. An Employer Identification Number is used to identify a business entity. Generally, businesses need an EIN. You can also apply for an EIN online at IRS.gov. Read the rest of this entry »

The Power of Being Nice – What Goes Around Comes Around

In Business Info on September 30, 2009 at 9:17 pm

“The Power of Nice – How to Conquer the Business World with Kindness,” written by the team of Linda Kaplan Thaler and Robin Koval reminds us that “nice” companies have lower employee turnover, lower recruitment costs and higher productivity. Nice people live longer, are healthier and make more money. The book identifies the following Six “Power of Nice” Principles: Read the rest of this entry »

Closing a Business Checklist

In Business Info on September 21, 2009 at 1:19 am

There are typical actions that are taken when closing a business. You must file an annual return for the year you go out of business. If you have employees, you must file the final employment tax returns, in addition to making final federal tax deposits of these taxes. Also attach a statement to your return showing the name of the person keeping the payroll records and the address where those records will be kept. Read the rest of this entry »

Small Business Tips : Small Business Three-Part Bookkeeping

In Business Info on September 20, 2009 at 2:42 am

Business Plan Layout

In Business Info on September 17, 2009 at 2:35 am

Which Form of Business Should I Use?

In Business Info on September 8, 2009 at 5:42 pm

Choosing the form of entity of your business, whether it be corporation, “S” corporation, sole proprietor or limited liability company, is a crucial decision that can have significant tax implications. Before you start the business, you should evaluate the advantages and disadvantages of each entity type to help you determine the most beneficial form of business for your company.
Read the rest of this entry »