Business Knowledge

Business Knowledge

Business Entity – Pro’s & Con’s

Business Entity Pros and Cons Sole Proprietorship Pros No formal creation process. Easy to operate and dissolve. No separate tax return. Easy to integrate business use of home deductions. No double taxation of profits.
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Business Financing

Business Financing- Don't Intermingle Funds Intermingling Funds A common problem with single-owner and other closely-held corporations is intermin­gling of funds. This occurs when a corporate shareholder uses his or her personal checking account for corporate deposits or payment of corporate expenses. Separation of funds can be a key in preserv­ing the liability protection of the corporate veil. Courts can pierce the corporate veil by find­ing that the corporation is an "alter ego" of the shareholder, essentially stating that the corpo­ration is not separate and distinct from the in­dividual as evidenced by the intermingling of finances.
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Business Owners

Business Owners- Taking Money Out of a Business When taking money out of a business, transactions must be carefully structured to avoid unwanted tax consequences or damage to the business entity. Business owners should follow the advice of a tax professional to make sure financial transactions are controlled and do not cause unanticipated taxation or other negative effects.
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Contractor Vs. Employee

Under the common law test, a worker is an employee if the purchaser of that worker's service has the right to direct or control the worker, both as to the final results and as to the details if when, where and how the work is done. Control need not actually be exercised; rather, if the service recipient has the right to control, employment may be shown. 1.1NSTRUCTION: An Employee receives instructions about when, where and how the work is to be performed.
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Employee or Independent Contractor

Employee or Independent Contractor? In order for a business owner to know how to treat payments made to workers for services, he or she must first know the business relationship that exists between the business and the person performing the services. A worker's status determines what taxes are paid and who is responsible for reporting and paying those taxes.
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Hobby Vs. Business

Hobby or Business? If an individual partnership, estate, trust, or an S corporation engages in an activity that is not conducted as a for-profit business, deductions are limited to the amount of income from the activity. This rule does not apply to corpora­tions, other than S corporations. If an activity is considered a for-profit business, deductions can exceed income, allowing the resulting loss to offset other income.
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Limited Liability Companies

Limited Liability Companies (LLCs) What is a Limited Liability Company? A limited liability company (LLC) is a business entity organized in the United States under state law. Unlike a partnership, all of the members of an LLC have limited personal liability for its debts. An LLC may be classified for fed­eral income tax purposes as a partnership, corporation, or an entity disregarded as separate from its owner.
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New Hire Reporting

New Hire Reporting- Quick References Guide EMPLOYER RESPONSIBILITIES: Report new hires or rehires within 20 calendar days. Respond to Verification of Employment letters.
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Quick Reference

Quick References Guide for Texas Employers EMPLOYER RESPONSIBILITIES: Report new hires or rehires within 20 calendar days. Respond to Verification of Employment letters.
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