Consider us your business partner. Only Better!

Transcription

1 Consider us your business partner Only Better!

2 Who is Ariana Ulloa-Olavarrieta? Born in Mexico City, immigrated to the United States at 5 years old. Her passion has always been to help the Latino community empower itself. Active in the community as a board member for Hispanic Chamber of Columbus and member of the scholarship committee for the Fund for Appalachian Ohio. Small business owner; launching an organic baby food company in A graduate of Ohio University, with a Masters in Financial Economics and a BA in Economics with specializations in Latin American Studies, Spanish and German.

3 What is the Latino SBDC? The Latino SBDC serves the Hispanic community by providing one-on-one counseling, training and business referrals to those seeking to start or grow their small business.

4 BizStartNow Week 2 Review Legal side of your business structure Business Operations Business Plan Development Financing What did you do to advance your business since last week? Questions?

5 Business Entity Types Sole Proprietorship Form 1040 Schedule C Partnership Form 1065 for partnership Form K-1 reported on partners individual returns Corporation Form 1120 or 1120S (due March 15 th ) K-1 from 1120S LLC Pass through entity Tax entity determines tax form

6 Bookkeeping/Recordkeeping Key: regularly maintained, organized & consistent Manual or computerized (Excel, Quickbooks, Peachtree) Essential documents (leases, contracts, invoices etc) Keep all receipts

7 Bookkeeping/Recordkeeping Basic Financial Statements Balance Sheet Statement of assets, Liabilities & Owners Equity Income Statement P&L Statement of Cash Flows

8 Bookkeeping/Recordkeeping Corps & LLCs Shareholder owners must be on payroll if they actively participate in the company (i.e. not just investors) Financial records & accounts must be totally separate from those of individuals/owners (recommended for all entities) Also see: IRS Pub 583 Starting a Business and Keeping Records IRS Pub 1066C A Virtual Small Business Tax Workshop CD

9 Good Business Practices Document everything Dealings with tax & governmental agencies Conversations & meetings with clients, vendors etc

10 Good Business Practices Get it in writing Service/product contracts & agreements Obligations & responsibilities

11 Federal Taxes Do you need a TIN/EIN? Schedule C Regular income tax vs selfemployment tax Estimated tax payments Also see: IRS Pub 1635 Employer Identification Number Understanding Your EIN

12 Expenses/Deductions Home Office Regular & exclusive requirement % of total square footage Utilities (electric, gas, water/sewer) Insurance Repairs/maintenance Mortgage insurance Real Estate Taxes

13 Expenses/Deductions Business use of personal vehicle Mileage log Also see: IRS Pub 334 Tax Guide for Small Business IRS Pub 535 Business Expenses IRS Pub 587 Business Use of Your Home

14 Independent Contractor or Employee It s all about control IRS form SS-8 Serious consequences for misclassification Also see: IRS Independent Contractor or Employee

15 Independent Contractor Form W-9 Independent Contractor Agreement Ohio New Hire Reporting Copy of current Workers Compensation Certificate Name insured on the contractor s liability insurance

16 Employee Federal Taxes W-4 Social Security & Medicare = FICA Tax (15.3%) Federal Unemployment (on first $7,000 of taxable wages)

17 Employee Other Taxes State Income Tax Withholding School District Income Tax Withholding (based on employee s SD of residence) City (or cities) Income Tax Withholding (where work is performed) State Unemployment (on first $9,000 of wages) Worker s Comp (on full wages of most workers)

18 Employee Paperwork W-4 Ohio Form IT-4 (includes school district field) Federal Form I-9 Ohio New Hire Reporting Refer to IRS Pub 15 for detailed information on federal employment taxes

19 Sales Tax Do you have to collect sales tax? Answer: Probably. Most products and some services are subject to sales tax

20 Sales Tax Examples: Landscaping Maintenance & janitorial services Employment placement services Extermination services Laundry and dry cleaning service, excluding sales through selfservice facilities Personal care services skin care, mani/pedis, hair removal, tattoos, body piercing, tanning, massage and skin care. (It does not include hair services, licensed doctor/chiropractor prescribed services.)

21 Vendor s License County Vendor s License Delivery Vendor s License Transient Vendor s License Ohio Business Gateway:

22 Vendor s License Sales tax rate is based on location of sale (origin based) Reporting period is either monthly or semi annually Remit by the 23 rd of the month following the end of your reporting period You must file even if you had $0 taxable sales

23 CAT Commercial Activity Tax Tax on gross sales of more than $150,000

24 Q&A Any questions?

25 Next Steps Meet with an Advisor and let s get your business open! Call for an appointment

26 For Information on SBDC Activities The Ohio SBDC at Columbus State (614)