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Starting Your Business (203)
Author: Holmes F. Crouch
Pages: 224
List Price: $19.95
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  • Summary

    STARTING YOUR BUSINESS (T/G 203) covers the pros, cons, and tax forms of proprietorships, partnerships, and corporations when deciding on one's initial business venture: lays out the surprising role of "bank account discipline," the tradeoffs of employees versus nonemployees; and of being a "deputized" collector of taxes. Also covered:

    • Gross receipts to gross profits
    • Payroll matters & FTC "coupons"
    • MACRS depreciation methods
    • Myth of "free" company auto
    • Are owners "naturally" tax suspect?
    • Combating IRS's computer tyranny

    Table of Contents
    Starting Your Business
    Book: 203
    
    Table of Content
    
    1.  PREBUSINESS MATTERS                         1-1
    
        “Trade or Business” Defined                 1-2
        Material Participation Required             1-3
        The Not-for-Profit Presumption              1-4
        Nine Objective Factors                      1-6
        More Than One Business                      1-8
        Methods & Phases of “Starting”              1-9
        Startup Costs Defined                       1-12
        Simplified Cost Accumulation                1-13
        Timing When To Be “In Business”             1-14
    
    2.  SELECTING INITIAL FORM                      2-1
    
        The Basic Forms of Business                 2-2
        Variants and Hybrids Thereof                2-3
        Proprietorship Pros and Cons                2-6
        Partnership Pros and Cons                   2-7
        Corporation Pros and Cons                   2-9
        Tax Differences Inconsequential             2-11
        Name, Logo, & Letterhead                    2-14
        Fictitious Name Publication                 2-15
        Federal I.D. Number                         2-16
        
    3.  BANK ACCOUNT DISCIPLINE                     3-1
    
        Those Records at Your Bank                  3-2
        A Nightmarish Example                       3-4
        How It All Worked Out                       3-5
        How to Start Right                          3-7
        “Big Stub” Business Checks                  3-9
        Cash and Barter?                            3-11
        The “De Minimis” Rule                       3-13
        Borrowed Money                              3-14
        Employee Withholdings & Sales Tax           3-15
    
    4.  EMPLOYER TAX MATTERS                        4-1
    
        IRS Circular E                              4-2
        What If Nonemployees?                       4-3
        When Hiring Any Employee                    4-4
        Separate Record on Each Employee            4-7
        Payroll Ledgers:  Setup & Selection         4-9
        Employer Quarterly Returns                  4-10
        FTD “Coupons” Explained                     4-13
        Still Another Form: 940                     4-14
        Taxability of Fringe Benefits               4-15
        Business Expense Reimbursements             4-17
        Getting Out Those W-2s                      4-18
    
    5.  COLLECTING SALES TAX                        5-1
    
        Applies to Retailers Only                   5-2
        Collection at “Point of Sale”               5-3
        Seller’s Permit Required                    5-5
        Importance of Resale Certificates           5-7
        Other Exempt Transactions                   5-9
        Periodic Returns Required                   5-10
        Good Supporting Records Needed              5-11
        Good Invoicing Design                       5-13
    
    6.  COST OF GOODS SOLD                          6-1
        
        The Sequences of Income                     6-2
        The “Direct Cost” Subschedule               6-3 
        Beginning/Ending Inventories                6-5
        Purchases for Resale                        6-5
        Raw Materials & Supplies                    6-7
        Meaning of “Fabrication Labor”              6-7
        Nonemployee Labor: 1099s                    6-8
        More on “Other Costs”                       6-11
        Importance of Ending Inventory              6-13
        Ending Valuation Methods                    6-14
        Putting It All Together                     6-16
    
    7.  DEFERRED DEDUCTIONS                         7-1
    
        What is Amortization                        7-2
        Items Statutorily Amortized                 7-3
        What is Capitalization?                     7-6
        Depreciation: Most Understood               7-8
        The “Essence” of Sec. 168                   7-9
        MACRS Depreciation Methods                  7-12
        Special Depreciation Election: Sec. 179     7-14
        Introduction to Form 4562                   7-15
        Part V of Form 4562 (Listed Property)       7-18
        
    8.  FORM 1040 PROPRIETORSHIPS                   8-1
    
        Overview of Forms Required                  8-2
        Other Related Forms                         8-5
        Format/Content of Schedule C                8-6
        Cash vs. Accrual Accounting                 8-10
        Office-at-Home Deduction                    8-11
        Car & Truck Expenses                        8-13
        Travel, Meals, & Entertainment              8-14
        Other Expenses (Specify)                    8-15
        Schedule SE: The “Second” Tax               8-18
    
    9.  FORM 1065 PARTNERSHIPS                      9-1
    
        The Partnership Accounting Year             9-2
        Written Partnership Agreement               9-3
        Each Partner’s Capital Account              9-5
        Quick Overview of Form 1065                 9-7
        Multiple Sources of Income                  9-11
        Deductions Sequence Rearranged              9-11
        Importance of Balance Sheets                9-14
        Introduction to Schedule K-1                9-15
        Many Key Questions Asked                    9-19
        Figuring Each “Distributive Share”          9-20
    
    10. FORM 1120 CORPORATIONS                      10-1
    
        Immediate Tax Suspicion                     10-2
        A Creation Under State Law                  10-3
        Fiscal Year: Indefinite Life                10-5
        Introduction to Form 1120                   10-6
        Schedule C (1120):  Uniquely Special        10-11
        Balance Sheet Comprehensiveness             10-12
        Three Separate Taxes Apply                  10-14
        Applicable Credits                          10-15
    
    11. COMPENSATION OF OWNERS                      11-1
        
        Owners Are “Naturally Suspect”              11-2
        Limit “Meals & Entertainment”               11-3
        Nondiscriminatory Insurance Plans           11-4
        “Safe Harbor” Benefits                      11-7
        A “Company-Provided” Auto                   11-8
        Livelihood Compensation Differences         11-9
        Employing Spouse & Children                 11-11
        Qualified Retirement Plans                  11-13
        Annual Contribution Limits                  11-14
        Form 5500-C/R for Each Plan                 11-17
    
    12. COMPLIANCE MATTERS                          12-1
    
        Vow to “File on Time”                       12-2
        Establish a Tax Calendar                    12-3
        Have Access to a “Tax Reserve”              12-4
        Prepaying Income Tax                        12-5
        Filing of Information Returns               12-6
        Resolving “Computer Tyranny”                12-7
        Subjection to TCMP Audit                    12-9
        Beware of IRS Abuses                        12-11
        Adapting and Thriving                       12-12

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