If you are contemplating setting up your own business or already have a business in the Walnut Creek area, here are some useful tax tips.
- First, you need to make sure you choose the correct accounting method for your business and file the appropriate annual returns.
- If you are a new business, you need to make sure to obtain an employer ID number (EIN).
- You need to make estimated tax payments during the year to cover your federal and state tax liabilities. Payments are usually due quarterly in January, April, July, and October. Consult a tax attorney to help you calculate how much you should pay. Make sure your payments are timely and sent to the appropriate address.
- If you have employees, you also need to make sure to file the appropriate tax returns annually and quarterly and make payments in a timely manner.
- If you have independent contractors, you need to make sure that you file the appropriate Form 1099.
- You need to keep track of all business expenses and be able to substantiate them. Mileage also needs to be accurately computed and substantiated.
How Your Business Can Affect Your Estate Plan
If your business continues to grow, you may find yourself in a position where you need to consider how the estate tax affects your estate plan. Sections 303 and 6166 of the Internal Revenue Code (IRC) can help alleviate some tax burden for small business owners who qualify. This one-time opportunity allows the estate to redeem stock with very little tax cost or to defer estate tax for a period of time. This allows the business to generate more revenue to pay some of the taxes. The requirements for this are complicated, and you should consult with an attorney if you have questions.
Consult a Tax Attorney For More Tax Tips
Please remember this is only a summary of some of the tax tips business owners need to keep in mind. There are several other matters that may affect your tax status as a business owner, and a lawyer familiar with tax law and business taxes can assist you.
Contact Mendes Weed, LLP
Mendes Weed, LLP helps businesses comply with tax laws, and we may be able to help you as well. With offices in Walnut Creek, Sacramento, and San Francisco, we are conveniently situated to serve Northern California, but we assist clients throughout California and the U.S.