Tax Information And Guide

Let's start with the good news. You've no doubt heard the statistics: that 9 out of 10 new businesses fail. Well, it turns out that census data show that about 65% of new businesses were still in operation after 4 years. As we dig a little bit deeper, though, the news is more sobering for solo entrepreneurs: Successful businesses tended to be employer firms rather than solo enterprises. And several studies don't even take into account sole proprietorships. A look at the factors contributing to success or failure in these studies, though, can still offer valuable lessons to those determined to succeed.

Tax Software Here are a few do's and don'ts:

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Software Tax 1. Do your homework before opening your new business. The most common reason for failure cited in recent studies was "outside business conditions" having to do with increased costs (such as rent and insurance)and new competition. You should study the existing and potential competition and factor in increases in fixed costs as you determine whether you have the capital you need to get started. If you're already in business, you can still do this research and incorporate the results into your planning. Go to the library and read up the specific costs and hazards associated with your industry. Get training or work in a successful business that is already doing what you plan to do so you can see from the inside how common problems are resolved and success is achieved.

Read this guide before starting your design, as it provides important information for preparing your artwork. Guidelines & Cutting Please read this guide before starting your design as it provides important information about cutting tolerances and safe zones. Orientation Instructions If you are planning to make a double sided greeting card, or business card, please read this guide before you start your design.

Every Landlord Tax Deduction 2. Do eliminate or reduce existing debt as much as possible and clean up your credit reports before you open your doors for business. A 1998 study showed that difficulties obtaining financing and excessive debt were the second leading cause of business failures. Businesses started with at least $50,000 in capital had the best chance of success. This doesn't have to be your own personal capital, of course; but if you don't have it, you need to be in a position to borrow it, and that's difficult to do if you already have high levels of debt when you get started. Before applying for funding, be sure to get your credit reports, which you can do easily and cheaply at MyFico.com. The site has terrific tools you can use to get errors corrected. If your credit is poor, there are services, such as those offered through Eventis (http://www.myeventis.com/azurpacific) that will help you repair it.

Read the family finance guide from Moneynet.co.uk, providing information on family finance issues such as child trust funds (CTF's) and child tax credits.

Tax Help 3. Don't start a business as a sole proprietor or general partnership. You absolutely must put into place a separate legal entity, such as a corporation or limited liability company (LLC)to operate your business. If you're already in business as a sole proprietor or mom-and-pop partnership, you must do this immediately! The risks involved in starting a business, especially for independent entrepreneurs, are high enough without multiplying them further by putting all your personal assets, including your automobiles and your personal residence, at risk. Some experts have argued that this way of doing business--which most opt for because it's "easier"--is so dangerous that it should be outlawed! This is true from a tax standpoint as well as an asset protection one. There are many advantages that the government gives to businesses that are properly structured which are simply not available to you if you insist on operating as a sole proprietor. Just don't do it!

Start up your business right, right from the start, using our comprehensive kits, software, forms and guides

Help Tax The right structure for your business would involve one or more entities--such as an LLC managed by a corporation. If you are a serious entrepreneur planning to build long-term wealth, a comprehensive home study course on business entities will save you thousands of dollars in fees, taxes and unnecessary losses. The resources on our website will help you choose the right entities for you and show you how you can get them set up quickly, easily, and inexpensively (http://www.wealthstrategies202.com/resources.htm).

Gordon Brown has renamed the DTI the Department for Business, Enterprise and Regulatory Reform (DBERR) to reflect its focus on the reduction of red tape and a commitment to entrepreneurship. February 2007 HMRC launches new website for online traders HM Revenue & Customs (HMRC) has launched a new website to assist online traders with paying tax. Launched on February 5th, traders and has been designed to help with the registration and payment of tax, in addition to providing information on VAT and capital gains tax.

Ernst Ernst Guide Guide Tax 4. Don't incur significant expenses without first putting your business entity in place. Start-up expenses, expenditures made before the date you are officially in business, in excess of $5,000 cannot be deducted in full in the year in which they were incurred; instead they have to be deducted over 180 months (15 years). By contrast, expenses incurred by an existing business can be amortized or taken all in a single year (within certain limits) under Section 179 of the tax code.

Tax Return 5. Do be sure to check with your local and county governments to find out their requirements for doing business. You may have to register, obtain a permit, and/or pay a business tax, and there are stiff penalties that apply if you fail to comply with these requirements.

Return Tax 6. Don't incur high fixed costs, such as rent, if you can avoid it in the early years of your business. Starting a business from home was cited as a positive factor in business success, because of this limitation on fixed costs. Obviously if you have a restaurant or gym, or something of that sort which requires a separate commercial space, you will have no choice in the matter. But if you do have a choice, create a dedicated work space in your home.

Guide Guide Master Master Tax 7. Do obtain one of excellent business tax guides we recommend on our resources page (http://www.wealthstrategies202.com/taxes.htm). The studies of business failures cited tax problems as one of the major causal factors. Unless you're a sole proprietor, the tax guides commonly available are addressed to individuals and don't help much with business taxes. (And if I've not convinced you not be a sole proprietor yet, one look at all the tax deductions available to a properly structured business operating as a corporation or LLC will!)

Tax Preparation Follow these simple rules, and you will dramatically increase the likelihood that your business will be one of those still around in five years.
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Copyright 2006 Azur Pacific Associates
Germaine A. Hoston, Ph.D. is President of Azur Pacific Associates, a translation and consulting firm that does business in the U.S., Europe, and Asia. Get a free special report when you subscribe to her free eNewsletter for Small Business Entrepreneurs at: http://www.wealthstrategies202.com

Preparation Tax

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