Business Taxes

When starting a small business, the last thing they are probably thinking about is potential small business tax problems they could run into. Why is this the case? Small business owners are navigating many complicated issues from quarterly tax payments to Economic Injury Disaster Loans. Simply put, there are a lot of details to get right—starting with a W-2 worker’s salary that must be reported to the IRS and state governments by the W-2 deadline — as well as the income and deductions business owners need to claim accurately on their own business tax returns.

Additionally, small businesses also have more complex tax responsibilities, including:

As a small business owner, your “to-do” list is likely never-ending. Between managing daily operations, chasing invoices, and preparing for tax season, finding the right tools to streamline your workflow is essential. If you’ve been considering professional accounting software, there has arguably never been a better window of opportunity to make the move to QuickBooks Online (QBO) during this special 90% discount offer.

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With recent industry changes and seasonal promotions colliding, here is why you should act now to set your business up for financial success. 

1. The “Introductory” Edge

The main function of all the activities at Seagull Technologies Inc is to education the small business community.  Here is an example of just hiring someone to take care of some of your business functions and not knowing if they are doing it right can cost you big time:

In Taylor v. Comm’r, T.C. Memo. 2024-33 (March 25, 2024), the Tax Court upheld the Trust Fund Recovery Penalty (TFRP) against Rodney Taylor for willful failure to pay employment taxes.

The number of content creators on social media have ballooned and advertising departments have noticed.  Sending their products to creators to evaluate is one of the most cost effective ways to get your name out their to an audience that is willing to listen.  

What a lot of new creators fail to address is how to handle these 'gifts' from a tax standpoint. So let's review the rules and IRS regulations that pertain to this subject. Here is an example situation to begin the discussion:

One of the most common questions I get from people opening a business for the first time is, 'How do I deduct all of the many expenses incurred before the business actually opens its doors?' Most of these can be handled as either start-up expenses or organizational expenses. You can think of organization expenses as creating the paperwork part of a business and start-up expenses as setting up the physical structure of a business.

Business start-up expenses are those incurred for investigating or creating an active trade or business and the cost must meet these two requirements:

This tax court ruling shows how important it is you have a tax advisor that is well versed in business returns.

There are a few things business owners need to do before they close their business. Of course, they need to fulfill their federal tax responsibilities. It's also important to notify the IRS of their plans.

A business might pay an independent contractor and an employee for the same or similar work, but there are key legal differences between the two. It is critical for business owners to correctly determine whether the people providing services are employees or independent contractors.

Here's some information to help business owners avoid problems that can result from misclassifying workers.

An employee is generally considered anyone who performs services, if the business can control what will be done and how it will be done. What matters is that the business has the right to control the details of how the worker's services are performed. Independent contractors are normally people in an independent trade, business or profession in which they offer their services to the public.

From collecting stamps and woodworking to crafting and quilting, people have all kinds of hobbies – and most of these hobbies will never turn a profit. For hobbies that do earn income, people should know that they must report it on their tax return. They should also be mindful that their hobby might be a business.