Small Business Tax Issues

Presented by

Phil Nathan, Enrolled Agent

H&R Block, Rancho Santa Margarita

H&R Block Tax Professionals

CertificationsOver 30 hours of additional training annually13 offices in south OC

It's not how much you get... It's how much you get to keep.

Small Business Tax IssuesEntity choice

Sole proprietorship

LLC – Single memberLLC – Two or more members

Partnership

“S” corporation

“C”corporation

Small Business Tax Issues

Entity choice

Sole proprietorshipFederal: Form 1040, Sch CCA: Form 540

Small Business Tax IssuesEntity choiceLLC – Single memberFederal :Form 1040 Sch CCA: Form 568LLC – Two or more membersFederal: Form 1065 Partnership(K-1) CA: Form 565(CA K-1)

Small Business Tax Issues

Entity choicePartnershipFederal: Form 1065(K-1)CA: Form 565 ( CA K-1)

Small Business Tax Issues

Entity choice

Subchapter “S” corporationFederal: Form 1120 S(K-1)CA: Form 100 S(CA K-1)

Small Business Tax Issues

Entity choice

Subchapter “C” CorporationFederal: Form 1120CA: Form 100

Small Business Tax Issues

Starting A Business

Other considerations

Organizing & Start Up Costs

Choice of tax year

Small Business Tax IssuesRunning A Business

RED FLAGS (2010)

Schedule C

Charitable Contributions

Overseas Bank Accounts

Small Business Tax Issues

Home Office ExpenseExclusive Use Rule

REGULARLY & EXCLUSIVELYPrincipal place of business

ExceptionsStorage of inventoryDay care facilities

Small Business Tax Issues

Contractor or Employee

Control

Financial

Relationship

Form SS-8 (IRS decide)

Small Business Tax IssuesNet Operating Losses

Carryback/carryforwardElection to waive carrybackSpecial rules (2008 and FY 2009 NOLs)

Small Business Tax IssuesRunning A Business

Proving legitimacy of deductible expensesDirect evidenceDocumentary evidence

Records,Receipts & Logs!

Saving you money

Self employed:Pre-tax Retirement PlansHealth Insurance Plans

Adjus ted Gros s Income23 Educator expenses (see page 29) . . . . . . . 2324 Certain business expenses of reservists, performing artists, andfee-basis government officials. Attach Form 2106 or 2106-EZ 2425 Health savings account deduction. Attach Form 8889 . 2526 Moving expenses. Attach Form 3903 . . . . . . 2627 One-half of self-employment tax. Attach Schedule SE . 2728 Self-employed SEP, SIMPLE, and qualified plans . . 2829 Self-employed health insurance deduction (see page 30) 2930 Penalty on early withdrawal of savings . . . . . . 3031 a Alimony paid b Recipient’s SSN © 31a32 IRA deduction (see page 31) . . . . . . . . 3233 Student loan interest deduction (see page 34) . . . 3334 Tuition and fees deduction. Attach Form 8917 . . . 3435 Domestic production activities deduction. Attach Form 8903 3536 Add lines 23 through 31a and 32 through 35 . . . . . . . . . . . . . 3637 Subtract line 36 from line 22. This is your adjus ted gros s income . . . © 37

Saving you money

My fees (professional)

Thank You, Phil Nathan E.A.

It's not how much you get …

It's how much you get to keep!

Closing Thoughts

Do you have the right structure for your business?Knowing the Tax Code Qualified Preparer – stands behind their work