Management Benefits From Business Owners Tax Self Study

By Marie Ross


Those who initiate new businesses have much to learn in order to be successful. There are budgeting as well as legal requirements that must be learned prior to initiating a new venture. Smart entrepreneurs seek this knowledge through a business owners tax self study.

Even if one is college educated, there is still a lot to know when initiating new plans and projects. Filing taxes can be a complex process, often requiring a certified public accountant. An entrepreneur can save a great deal of money over time when they learn to file for themselves.

Insurance policies for businesses, as well as all equipment, automobiles, incomes, and other overhead are deductions. Company owners will need to know the exact forms which must be filed, and some of these forms are filed quarterly rather than yearly. How often to file forms is an individual choice.

Quarterly reports can help simplify the process for many employers. In addition, they will need to decide whether or not to submit W2 forms, or a 1099 for any people who work for them. The proper forms are dependent on whether or not the worker is considered an employee or a subcontractor.

Income reflected on W2 forms as well as 1099s are relevant deductions which can lower the burden of taxes owed. Employees can be family members as well as members of the public, and the IRS will not differentiate even if the income reflected is paid to the company owner spouse or children. If they fail to maintain a proper paper trail by paying people in cash, then the owner winds up being responsible for taxes on those monies.

Hiring someone to administrate the business is an excellent method for keeping track of such documentation trails. A properly trained employee will know to keep records of all payments and expenses that could potentially provide the company with shelters and loopholes for their taxes. When this administrator is provided with a continuing education each year, their independent study benefits both themselves as well as the company.

Small businesses have many shelters and loopholes they can take advantage of in order to lower the percentage of taxable income reflected on their yearly statement. The Internal Revenue Service will try to levy taxes against all profits made by businesses, so any expenses or incomes paid out must be reflected in documents that they file. Bonuses paid to employees who are also members of the immediate family is one such shelter they can take advantage of.

Independent studies are much less costly than CPA firms and attorneys who specialize in specific aspects of the law. Being educated in multiple aspects of company management can protect entrepreneurs from being charged with penalties and interest. These issues must be dealt with every year in order to protect them from prosecution.

The IRS is notorious for auditing businesses that appear to make large profits. Some auditors from the Internal Revenue Service are less than scrupulous in their pursuit of businesses. The more money they can get from your company, the greater the benefits for auditors themselves.




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