Taxes
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Tune-up Your Tax Smarts

Most likely, business taxes are not among your favorite topics. But as we all
know, taxes are one of life’s inevitabilities, and small businesses face more
than their fair share. For small business owners, multiple levels of taxation at
the city, county, state and federal levels, as well as complex and ever-
changing rules and requirements, form a gauntlet of potential pitfalls.

Ironically, however, it is the Internal Revenue Service itself that has taken the
initiative lately to try and clear some of the tax-related fog for business owners
and the self-employed. After all, the IRS doesn’t make the tax laws, it just
manages the mess.

One of the chief improvements is a special small business/self-employed
(SB/SE) Web site created and updated by the IRS. Information on the site is
free, easy to find and remarkably light on “gov-speak.” You’ll find it at www.irs.
gov/smallbiz. This is a great place to give yourself a tax smarts tune-up.  And
what could be more authoritative than information coming from the chief tax
honchos themselves?

A section called “Starting, Operating or Closing a Business,” for example,
covers a tremendous amount of tax territory and includes much of the site’s
most useful information. This is where you’ll find IRS rules on hiring your own
kids or other family members, recordkeeping, employer ID numbers and
selecting a business structure.

There’s also help answering a key tax-related question:  Is what you are doing
a true business or merely a hobby?  If the IRS decides your “business” is really
just a hobby, your expenses may not be deductible. Look for their nine-point
checklist to see how you stack up.

The advice and information under “Operating a Business” is helpful for just
about any type of small business. And if you have employees, you’ll find
resources on hiring, employment taxes and wage reporting requirements.

The “Filing and Paying Taxes” section offers an overview of business taxes
you may face and the forms you’ll have to file. And you’ll gain important insight
into business income and expenses, tax credits, estimated taxes and
personal assets in a business. The “Tax Calendar for Small Business and
Self-Employed” is a handy scheduling tool available at the site.

To learn more about tax matters facing your small business, contact SCORE
"Counselors to America's Small Business." SCORE is a nonprofit
organization of more than 10,500 volunteer business counselors who provide
free, confidential business counseling and training workshops to small
business owners. Go to www.scoredm.org on the web or call (515) 284-4760
between the hours of 10:00 A.M. and 3:00 P.M. Monday through Friday.