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Tax Help Archives > 2003 > Publications > Publication 583
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Estimated tax.
Generally, you must pay taxes on income, including self-employment tax (discussed next), by making regular payments
of estimated tax during the
year.
Sole proprietors, partners, and S corporation shareholders.
You generally have to make estimated tax payments if you expect to owe tax of $1,000 or more when you file your return.
Use Form 1040–ES,
Estimated Tax for Individuals, to figure and pay your estimated tax. For more information, see Publication 505, Tax Withholding and
Estimated Tax.
Corporations.
You generally have to make estimated tax payments for your corporation if you expect it to owe tax of $500 or more
when you file its return. Use
Form 1120–W, Estimated Tax for Corporations, to figure the estimated tax. You must deposit the payments as explained on page 8 under
Depositing Taxes. For more information, see Publication 542.
Self-employment tax (SE tax) is a social security and Medicare tax primarily for individuals who work for themselves. Your payments of SE tax contribute to your coverage under the social security system. Social security coverage provides you with retirement benefits, disability benefits, survivor benefits, and hospital insurance (Medicare) benefits. You must pay SE tax and file Schedule SE (Form 1040) if either of the following applies.
Use Schedule SE (Form 1040) to figure your SE tax. For more information, see Publication 533, Self-Employment Tax.
You can deduct one-half of your SE tax as an adjustment to income on your Form 1040. The Social Security Administration (SSA) time limit for posting self-employment income.
Generally, the SSA will give you credit only for self-employment income reported on a tax return filed within 3 years,
3 months, and 15 days after
the tax year you earned the income. If you file your tax return or report a change in your self-employment income after this
time limit, the SSA may
change its records, but only to remove or reduce the amount. The SSA will not change its records to increase your self-employment
income.
This section briefly discusses the employment taxes you must pay, the forms you must file to report them, and other forms that must be filed when you have employees. Employment taxes include the following.
If you have employees, you will need to get Publication 15, Circular E, Employer's Tax Guide. If you have agricultural employees, get Publication 51, Circular A, Agricultural Employer's Tax Guide. These publications explain your tax responsibilities as an employer. If you are not sure whether the people working for you are your employees, see Publication 15–A, Employer's Supplemental Tax Guide. That publication has information to help you determine whether an individual is an employee or an independent contractor. If you classify an employee as an independent contractor, you can be held liable for employment taxes for that worker plus a penalty. An independent contractor is someone who is self-employed. Generally, you do not have to withhold or pay any taxes on payments to an independent contractor. Federal Income, Social Security, and Medicare Taxes You generally must withhold federal income tax from your employee's wages. To figure how much federal income tax to withhold from each wage payment, use the employee's Form W–4 (discussed later under Hiring Employees) and the methods described in Publication 15. Social security and Medicare taxes pay for benefits that workers and their families receive under the Federal Insurance Contributions Act (FICA). Social security tax pays for benefits under the old-age, survivors, and disability insurance part of FICA. Medicare tax pays for benefits under the hospital insurance part of FICA. You withhold part of these taxes from your employee's wages and you pay a matching amount yourself. To find out how much social security and Medicare tax to withhold and to pay, see Publication 15. Which form do I file?
Report these taxes on Form 941, Employer's Quarterly Federal Tax Return. (Farm employers use Form 943, Employer's Annual Federal
Tax Return for Agricultural Employees.)
Federal Unemployment (FUTA) Tax The federal unemployment tax is part of the federal and state program under the Federal Unemployment Tax Act (FUTA) that pays unemployment compensation to workers who lose their jobs. You report and pay FUTA tax separately from social security and Medicare taxes and withheld income tax. You pay FUTA tax only from your own funds. Employees do not pay this tax or have it withheld from their pay. Which form do I file?
Report federal unemployment tax on Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return. Or, if you qualify, you can use
the simpler Form 940–EZ instead. See Publication 15 to find out if you can use this form.
Have the employees you hire fill out Form I–9 and Form W–4. If your employees qualify for and want to receive advanced earned income credit payments, they must give you a completed Form W–5. Form I–9.
You must verify that each new employee is legally eligible to work in the United States. Both you and the employee
must complete the U.S.
Citizenship and Immigration Services (USCIS) Form I–9, Employment Eligibility Verification. You can get the form from USCIS offices
or from the USCIS website at http://uscis.gov. Call the USCIS at 1–800–375–5283 for more information about
your responsibilities.
Form W–4.
Each employee must fill out Form W–4, Employee's Withholding Allowance Certificate. You will use the filing status and withholding
allowances shown on this form to figure the amount of income tax to withhold from your employee's wages.
Form W–5.
An eligible employee who has a qualifying child is entitled to receive advance earned income credit (EIC) payments
with his or her pay during the
year. To get these payments, the employee must give you a properly completed Form W–5, Earned Income Credit Advance Payment
Certificate. You are required to make advance EIC payments to employees who give you a completed and signed Form W–5. For more
information, see Publication 15.
After the calendar year is over, you must furnish copies of Form W–2, Wage and Tax Statement, to each employee to whom you paid wages during the year. You must also send copies to the Social Security Administration. See Information Returns, later, for more information on Form W–2. This section describes the excise taxes you may have to pay and the forms you have to file if you do any of the following.
For more information on excise taxes, see Publication 510. Form 720.
The federal excise taxes reported on Form 720, Quarterly Federal Excise Tax Return, consist of several broad categories of taxes,
including the following.
Form 2290.
There is a federal excise tax on certain trucks, truck tractors, and buses used on public highways. The tax applies
to vehicles having a taxable
gross weight of 55,000 pounds or more. Report the tax on Form 2290, Heavy Highway Vehicle Use Tax Return. For more information, see the
instructions for Form 2290.
Form 730.
If you are in the business of accepting wagers or conducting a wagering pool or lottery, you may be liable for the
federal excise tax on wagering.
Use Form 730, Monthly Tax Return for Wagers, to figure the tax on the wagers you receive.
Form 11–C.
Use Form 11–C, Occupational Tax and Registration Return for Wagering, to register for any wagering activity and to pay the federal
occupational tax on wagering.
You generally have to deposit employment taxes, certain excise taxes, corporate income tax, and S corporation taxes before you file your return. Electronic deposit of taxes.
Generally, taxpayers whose total deposits of social security and Medicare taxes and withheld income tax during previous
years exceeded certain
amounts are required to deposit taxes through the Electronic Federal Tax Payment System (EFTPS).
Making deposits with coupons.
Mail or deliver deposits with completed deposit coupons to an authorized financial institution unless you make the deposits
electronically, as discussed earlier.
Deposit coupons.
Use Form 8109,
Federal Tax Deposit Coupon, to deposit taxes. On each coupon, you must show the deposit amount, the type of
tax, the period for which you are making a deposit, and your telephone number. Use a separate coupon for each tax and period.
You must include a
coupon with each deposit you make.
If you make or receive payments in your business, you may have to report them to the IRS on information returns. The IRS compares the payments shown on the information returns with each person's income tax return to see if the payments were included in income. You must give a copy of each information return you are required to file to the recipient or payer. In addition to the forms described below, you may have to use other returns to report certain kinds of payments or transactions. For more details on information returns and when you have to file them, see the General Instructions for Forms 1099, 1098, 5498, and W–2G. Form 1099–MISC.
Use Form 1099–MISC, Miscellaneous Income, to report certain payments you make in your trade or business. These payments include
the following items.
Form W–2.
You must file Form W–2, Wage and Tax Statement, to report payments to your employees, such as wages, tips, and other compensation,
withheld income, social security, and Medicare taxes, and advance earned income credit payments. For more information on what
to report on Form
W–2, see the Instructions for Forms W–2 and W–3.
Form 8300.
You must file Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, if you receive more than $10,000 in cash
in one transaction or two or more related business transactions. Cash includes U.S. and foreign coin and currency. It also
includes certain monetary
instruments such as cashier's and traveler's checks and money orders. For more information, see Publication 1544, Reporting Cash Payments of Over
$10,000 (Received in a Trade or Business).
The law provides penalties for not filing returns or paying taxes as required. Criminal penalties may be imposed for willful failure to file, tax evasion, or making a false statement. Failure to file tax returns.
If you do not file your tax return by the due date, you may have to pay a penalty. The penalty is based on the tax
not paid by the due date. See
your tax return instructions for more information about this penalty.
Failure to pay tax.
If you do not pay your taxes by the due date, you will have to pay a penalty for each month, or part of a month, that
your taxes are not paid. For
more information, see your tax return instructions.
Failure to withhold, deposit, or pay taxes.
If you do not withhold income, social security, or Medicare taxes from employees, or if you withhold taxes but do
not deposit them or pay them to
the IRS, you may be subject to a penalty of the unpaid tax, plus interest. You may also be subject to penalties if you deposit
the taxes late. For
more information, see Publication 15.
Failure to follow information reporting requirements.
The following penalties apply if you are required to file information returns. For more information, see the General Instructions for Forms
1099, 1098, 5498, and W–2G.
Waiver of penalty.
These penalties will not apply if you can show that the failures were due to reasonable cause and not willful neglect.
Failure to supply taxpayer identification number.
If you do not include your taxpayer identification number (SSN or EIN) or the taxpayer identification number of another
person where required on a
return, statement, or other document, you may be subject to a penalty of $50 for each failure. You may also be subject to
the $50 penalty if you do
not give your taxpayer identification number to another person when it is required on a return, statement, or other document.
You can deduct business expenses on your income tax return. These are the current operating costs of running your business. To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your field of business, trade, or profession. A necessary expense is one that is helpful and appropriate for your business, trade, or profession. An expense does not have to be indispensable to be considered necessary. The following are brief explanations of some expenses that are of interest to people starting a business. There are many other expenses that you may be able to deduct. See your form instructions and Publication 535, Business Expenses. Business start-up costs are the expenses you incur before you actually begin business operations. Your business start-up costs will depend on the type of business you are starting. They may include costs for advertising, travel, surveys, and training. These costs are capital expenses. You usually recover costs for a particular asset (such as machinery or office equipment) through depreciation (discussed next). Other qualifying start-up costs can be recovered through amortization. This means you deduct them in equal amounts over a period of 60 months or more. If you do not choose to amortize these start-up costs, you generally cannot recover them until you sell the business or otherwise go out of business. For more information on business start-up costs, see chapter 9 in Publication 535. If property you acquire to use in your business has a useful life that extends substantially beyond the year it is placed in service, you generally cannot deduct the entire cost as a business expense in the year you acquire it. You must spread the cost over more than one tax year and deduct part of it each year. This method of deducting the cost of business property is called depreciation. Business property you must depreciate includes the following items.
You can choose to deduct a limited amount of the cost of certain depreciable property in the year you place the property in service. This deduction is known as the “section 179 deduction.” You can take a special depreciation allowance for certain property you acquire and place in service before January 1, 2005. For more information about depreciation, the section 179 deduction, and the special depreciation allowance, see Publication 946, How To Depreciate Property.
Depreciation must be taken in the year it is allowable. Allowable depreciation not taken in a prior year cannot be taken in the current year. If you do not deduct the correct depreciation, you may be able to make a correction by filing Form 1040X, Amended U.S. Individual Income Tax Return, or by changing your accounting method. For more information on how to correct an incorrect depreciation deduction, see chapter 1 in Publication 946. To deduct expenses related to the business use of part of your home, you must meet specific requirements. Even then, your deduction may be limited. To qualify to claim expenses for business use of your home, you must meet both the following tests.
Exclusive use.
To qualify under the exclusive use test, you must use a specific area of your home only for your trade or business. The area used for
business can be a room or other separately identifiable space. The space does not need to be marked off by a permanent partition.
Exceptions to exclusive use.
You do not have to meet the exclusive use test if either of the following applies.
Principal place of business.
Your home office will qualify as your principal place of business for deducting expenses for its use if you meet the
following requirements.
Which form do I file?
If you file Schedule C (Form 1040), use Form 8829,
Expenses for Business Use of Your Home, to figure your deduction. If you file Schedule F (Form 1040) or you
are a partner, you can use the worksheet in Publication 587.
If you use your car or truck in your business, you can deduct the costs of operating and maintaining it. You generally can deduct either your actual expenses or the standard mileage rate. Actual expenses.
If you deduct actual expenses, you can deduct the cost of the following items:
Standard mileage rate.
Instead of figuring actual expenses, you may be able to use the standard mileage rate to figure the deductible costs
of operating your car, van,
pickup, or panel truck for business purposes. You can use the standard mileage rate for a vehicle you own or lease. The standard
mileage rate is a
specified amount of money you can deduct for each business mile you drive. It is announced annually by the IRS. To figure
your deduction, multiply
your business miles by the standard mileage rate for the year.
Choosing the standard mileage rate.
If you want to use the standard mileage rate for a car you own, you must choose to use it in the first year the car
is available for use in your
business. In later years, you can choose to use either the standard mileage rate or actual expenses.
Additional information.
For more information about the rules for claiming car and truck expenses, see Publication 463, Travel, Entertainment, Gift, and Car
Expenses.
This part explains why you must keep records, what kinds of records you must keep, and how to keep them. It also explains how long you must keep your records for federal tax purposes. A sample recordkeeping system is illustrated at the end of this part. Everyone in business must keep records. Good records will help you do the following. Monitor the progress of your business.
You need good records to monitor the progress of your business. Records can show whether your business is improving,
which items are selling, or
what changes you need to make. Good records can increase the likelihood of business success.
Prepare your financial statements.
You need good records to prepare accurate financial statements. These include income (profit and loss) statements
and balance sheets. These
statements can help you in dealing with your bank or creditors and help you manage your business.
Identify source of receipts.
You will receive money or property from many sources. Your records can identify the source of your receipts. You need
this information to separate
business from nonbusiness receipts and taxable from nontaxable income.
Keep track of deductible expenses.
You may forget expenses when you prepare your tax return unless you record them when they occur.
Prepare your tax returns.
You need good records to prepare your tax returns. These records must support the income, expenses, and credits you
report. Generally, these are
the same records you use to monitor your business and prepare your financial statements.
Support items reported on tax returns.
You must keep your business records available at all times for inspection by the IRS. If the IRS examines any of your
tax returns, you may be asked
to explain the items reported. A complete set of records will speed up the examination.
Except in a few cases, the law does not require any specific kind of records. You can choose any recordkeeping system suited to your business that clearly shows your income and expenses. The business you are in affects the type of records you need to keep for federal tax purposes. You should set up your recordkeeping system using an accounting method that clearly shows your income for your tax year. See Accounting Method, earlier. If you are in more than one business, you should keep a complete and separate set of records for each business. A corporation should keep minutes of board of directors' meetings. Your recordkeeping system should include a summary of your business transactions. This summary is ordinarily made in your books (for example, accounting journals and ledgers). Your books must show your gross income, as well as your deductions and credits. For most small businesses, the business checkbook (discussed later) is the main source for entries in the business books. In addition, you must keep supporting documents, explained next. Purchases, sales, payroll, and other transactions you have in your business generate supporting documents. Supporting documents include sales slips, paid bills, invoices, receipts, deposit slips, and canceled checks. These documents contain information you need to record in your books. It is important to keep these documents because they support the entries in your books and on your tax return. Keep them in an orderly fashion and in a safe place. For instance, organize them by year and type of income or expense. Gross receipts.
Gross receipts are the income you receive from your business. You should keep supporting documents that show the amounts
and sources of your gross
receipts. Documents that show gross receipts include the following.
Purchases.
Purchases are the items you buy and resell to customers. If you are a manufacturer or producer, this includes the
cost of all raw materials or
parts purchased for manufacture into finished products. Your supporting documents should show the amount paid and that the
amount was for purchases.
Documents for purchases include the following.
Expenses.
Expenses are the costs you incur (other than purchases) to carry on your business. Your supporting documents should
show the amount paid and that
the amount was for a business expense. Documents for expenses include the following.
Travel, transportation, entertainment, and gift expenses.
Specific recordkeeping rules apply to these expenses. For more information, see Publication 463.
Employment taxes.
There are specific employment tax records you must keep. For a list, see Publication 15.
Assets.
Assets are the property, such as machinery and furniture you own and use in your business. You must keep records to
verify certain information
about your business assets. You need records to figure the annual depreciation and the gain or loss when you sell the assets.
Your records should show
the following information.
What if I don't have a canceled check?
If you do not have a canceled check, you may be able to prove payment with certain financial account statements prepared
by financial institutions.
These include account statements prepared for the financial institution by a third party. These account statements must be
highly legible. The
following table lists acceptable account statements.
Recording Business Transactions A good recordkeeping system includes a summary of your business transactions. (Your business transactions are shown on the supporting documents just discussed.) Business transactions are ordinarily summarized in books called journals and ledgers. You can buy them at your local stationery or office supply store. A journal is a book where you record each business transaction shown on your supporting documents. You may have to keep separate journals for transactions that occur frequently. A ledger is a book that contains the totals from all of your journals. It is organized into different accounts. Whether you keep journals and ledgers and how you keep them depends on the type of business you are in. For example, a recordkeeping system for a small business might include the following items.
The business checkbook is explained next. The other items are illustrated later under Sample Record System.
The system you use to record business transactions will be more effective if you follow good recordkeeping practices. For example, record expenses when they occur, and identify the source of recorded receipts. Generally, it is best to record transactions on a daily basis. Business checkbook.
One of the first things you should do when you start a business is open a business checking account. You should keep
your business account separate
from your personal checking account.
Reconciling the checking account.
When you receive your bank statement, make sure the statement, your checkbook, and your books agree. The statement
balance may not agree with the
balance in your checkbook and books if the statement:
Table 3. Period of Limitations
You must decide whether to use a single-entry or a double-entry bookkeeping system. The single-entry system of bookkeeping is the simplest to maintain, but it may not be suitable for everyone. You may find the double-entry system better because it has built-in checks and balances to assure accuracy and control. Single-entry.
A single-entry system is based on the income statement (profit or loss statement). It can be a simple and practical
system if you are starting a
small business. The system records the flow of income and expenses through the use of:
Double-entry.
A double-entry bookkeeping system uses journals and ledgers. Transactions are first entered in a journal and then
posted to ledger accounts. These
accounts show income, expenses, assets (property a business owns), liabilities (debts of a business), and net worth (excess
of assets over
liabilities). You close income and expense accounts at the end of each tax year. You keep asset, liability, and net worth
accounts open on a permanent
basis.
There are computer software packages you can use for recordkeeping. They can be purchased in many retail stores. These packages are very helpful and relatively easy to use; they require very little knowledge of bookkeeping and accounting. If you use a computerized system, you must be able to produce sufficient legible records to support and verify entries made on your return and determine your correct tax liability. To meet this qualification, the machine-sensible records must reconcile with your books and return. These records must provide enough detail to identify the underlying source documents. You must also keep all machine-sensible records and a complete description of the computerized portion of your recordkeeping system. This documentation must be sufficiently detailed to show all of the following items.
See Revenue Procedure 98–25 in Cumulative Bulletin 1998–1 for more information. Microfilm and microfiche reproductions of general books of accounts, such as cash books, journals, voucher registers, and ledgers, are accepted for recordkeeping purposes if they comply with Revenue Procedure 81–46 in Cumulative Bulletin 1981–2. Records maintained in an electronic storage system are accepted for recordkeeping purposes if the system complies with Revenue Procedure 97–22 in Cumulative Bulletin 1997–1. An electronic storage system is one that either images hardcopy (paper) books and records or transfers computerized books and records to an electronic storage media, such as an optical disk. You must keep your records as long as they may be needed for the administration of any provision of the Internal Revenue Code. Generally, this means you must keep records that support an item of income or deduction on a return until the period of limitations for that return runs out. The period of limitations is the period of time in which you can amend your return to claim a credit or refund, or the IRS can assess additional tax. Table 3 below contains the periods of limitations that apply to income tax returns. Unless otherwise stated, the years refer to the period after the return was filed. Returns filed before the due date are treated as filed on the due date.
Keep copies of your filed tax returns. They help in preparing future tax returns and making computations if you file an amended return. Employment taxes.
If you have employees, you must keep all employment tax records for at least 4 years after the date the tax becomes
due or is paid, whichever is
later. For more information about recordkeeping for employment taxes, see Publication 15.
Assets.
Keep records relating to property until the period of limitations expires for the year in which you dispose of the
property in a taxable
disposition. You must keep these records to figure any depreciation, amortization, or depletion deduction, and to figure your
basis for computing gain
or loss when you sell or otherwise dispose of the property.
Records for nontax purposes.
When your records are no longer needed for tax purposes, do not discard them until you check to see if you have to
keep them longer for other
purposes. For example, your insurance company or creditors may require you to keep them longer than the IRS does.
This example illustrates a single-entry system used by Henry Brown, who is the sole proprietor of a small automobile body shop. Henry uses part-time help, has no inventory of items held for sale, and uses the cash method of accounting. These sample records should not be viewed as a recommendation of how to keep your records. They are intended only to show how one business keeps its records. 1. Daily Summary of Cash Receipts
This summary is a record of cash sales for the day. It accounts for cash at the end of the day over the amount in the Change and Petty Cash Fund at the beginning of the day. Henry takes the cash sales entry from his cash register tape. If he had no cash register, he would simply total his cash sale slips and any other cash received that day. He carries the total receipts shown in this summary for January 3 ($267.80), including cash sales ($263.60) and sales tax ($4.20), to the Monthly Summary of Cash Receipts. Petty cash fund.
Henry uses a petty cash fund to make small payments without having to write checks for small amounts. Each time he
makes a payment from this fund,
he makes out a petty cash slip and attaches it to his receipt as proof of payment. He sets up a fixed amount ($50) in his
petty cash fund. The total
of the unspent petty cash and the amounts on the petty cash slips should equal the fixed amount of the fund. When the totals
on the petty cash slips
approach the fixed amount, he brings the cash in the fund back to the fixed amount by writing a check to “Petty Cash” for the total of the
outstanding slips. (See the Check Disbursements Journal entry for check number 92.) This restores the fund to its fixed amount of $50. He
then summarizes the slips and enters them in the proper columns in the monthly check disbursements journal.
2. Monthly Summary of Cash Receipts
This shows the income activity for the month. Henry carries the total monthly net sales shown in this summary for January ($4,865.05) to his Annual Summary. To figure total monthly net sales, Henry reduces the total monthly receipts by the sales tax imposed on his customers and turned over to the state. He cannot take a deduction for sales tax turned over to the state because he only collected the tax. He does not include the tax in his income. 3. Check Disbursements Journal (Pages 20 and 21) Henry enters checks drawn on the business checking account in the Check Disbursements Journal each day. All checks are prenumbered and each check number is listed and accounted for in the column provided in the journal. Frequent expenses have their own headings across the sheet. He enters in a separate column expenses that require comparatively numerous or large payments each month, such as materials, gross payroll, and rent. Under the General Accounts column, he enters small expenses that normally have only one or two monthly payments, such as licenses and postage. Henry does not pay personal or nonbusiness expenses by checks drawn on the business account. If he did, he would record them in the journal, even though he could not deduct them as business expenses. Henry carries the January total of expenses for materials ($1,083.50) to the Annual Summary. Similarly, he enters the monthly total of expenses for telephone, truck/auto, etc., in the appropriate columns of that summary. 4. Employee Compensation Record
This record shows the following information.
Henry carries the January gross payroll ($520) to the Annual Summary. This annual summary of monthly cash receipts and expense totals provides the final amounts to enter on Henry's tax return. He figures the cash receipts total from the total of monthly cash receipts shown in the Monthly Summary of Cash Receipts. He figures the expense totals from the totals of monthly expense items shown in the Check Disbursements Journal. As in the journal, he keeps each major expense in a separate column. Henry carries the cash receipts total shown in the annual summary ($47,440.95) to Part I of Schedule C (not illustrated). He carries the total for materials ($10,001.00) to Part II of Schedule C.
A business that keeps materials and supplies on hand generally must complete the inventory lines in Part III of Schedule C. However, there are no inventories of materials and supplies in this example. Henry buys parts and supplies on a per-job basis; he does not keep them on hand. Henry enters annual totals for interest, rent, taxes, and wages on the appropriate lines in Part II of Schedule C. The total for taxes and licenses includes the employer's share of social security and Medicare taxes, and the business license fee. He enters the total of other annual business expenses on the “Other expenses” line of Schedule C. 6. Depreciation Worksheet (Page 22) This worksheet shows the information used in figuring the depreciation allowed on assets used in Henry's business. Henry figures the depreciation using the modified accelerated cost recovery system (MACRS). He purchased and placed in service several used assets that do not qualify for the section 179 deduction or the special depreciation allowance. Depreciation, the section 179 deduction, and the special depreciation allowance are discussed in Publication 946. Henry uses the information in the worksheet to complete Form 4562, Depreciation and Amortization (not illustrated). 7. Bank Reconciliation (Page 23) Henry reconciles his checkbook with his bank statement and prepares a bank reconciliation for January as follows.
The only book adjustment Henry needs to make is to the Check Disbursements Journal for the $10 bank service charge. He does not need to adjust the Monthly Summary of Cash Receipts because he correctly entered the January 8 deposit of $600.40 in that record.  Daily summary cash receipts 2. Monthly Summary of Cash Receipts
3. Check Disbursements Journal
3. Check Disbursements Journal (Continued)
This image is too large to be displayed in the current screen.
Please click the link to view the image. Employee compensation record, annual summary, and depreciation worksheet This section describes the help the IRS and other federal agencies offer to taxpayers who operate their own businesses. You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get more information from the IRS in several ways. By selecting the method that is best for you, you will have quick and easy access to tax help. Contacting your Taxpayer Advocate.
If you have attempted to deal with an IRS problem unsuccessfully, you should contact your Taxpayer Advocate.
Small Business Tax Education Program.
Small business owners and other self-employed individuals can learn about business taxes through a unique partnership
between the IRS and local
organizations. Through workshops or in-depth tax courses, instructors provide training on starting a business, recordkeeping,
preparing business tax
returns, self-employment tax issues, and employment taxes.
Free tax services.
To find out what services are available, get Publication 910, Guide to Free Tax Services. It contains a list of free tax publications
and an index of tax topics. It also describes other free tax information services, including tax education and assistance
programs and a list of
TeleTax topics.
Internet. You can access the IRS website 24 hours a day, 7 days a week, at www.irs.gov to:
You can also reach us using File Transfer Protocol at ftp.irs.gov.
Fax. You can get over 100 of the most requested forms and instructions 24 hours a day, 7 days a week, by fax. Just call 703–368–9694 from your fax machine. Follow the directions from the prompts. When you order forms, enter the catalog number for the form you need. The items you request will be faxed to you. For help with transmission problems, call 703–487–4608. Long-distance charges may apply.
Phone. Many services are available by phone.
Walk-in. Many products and services are available on a walk-in basis.
Mail. You can send your order for forms, instructions, and publications to the Distribution Center nearest to you and receive a response within 10 workdays after your request is received. Find the address that applies to your part of the country.
CD-ROM for tax products. You can order IRS Publication 1796, Federal Tax Products on CD-ROM, and obtain:
Buy the CD-ROM from National Technical Information Service (NTIS) on the Internet at www.irs.gov/cdorders for $22 (no handling fee) or call 1–877–233–6767 toll-free to buy the CD-ROM for $22 (plus a $5 handling fee). The first release is available in early January and the final release is available in late February.
CD-ROM for small businesses. IRS Publication 3207, Small Business Resource Guide, is a must for every small business owner or any taxpayer about to start a business. This handy, interactive CD contains all the business tax forms, instructions and publications needed to successfully manage a business. In addition, the CD provides an abundance of other helpful information, such as how to prepare a business plan, finding financing for your business, and much more. The design of the CD makes finding information easy and quick and incorporates file formats and browsers that can be run on virtually any desktop or laptop computer. It is available in early April. You can get a free copy by calling 1–800–829–3676 or by visiting the website at www.irs.gov/smallbiz. Comments on IRS enforcement actions.
The Small Business and Agriculture Regulatory Enforcement Ombudsman and 10 Regional Fairness Boards were established
to receive comments from small
business about federal agency enforcement actions. The Ombudsman will annually evaluate the enforcement activities of each
agency and rate its
responsiveness to small business. If you wish to comment on the enforcement actions of the IRS, you can:
The Small Business Administration (SBA) offers training and educational programs, counseling services, financial programs, and contract assistance for small business owners. The SBA also has publications and videos on a variety of business topics. The following briefly describes assistance provided by the SBA. Small Business Development Centers (SBDCs).
SBDCs provide counseling, training, and technical services to current and prospective small business owners who cannot
afford the services of a
private consultant. Help is available when beginning, improving, or expanding a small business.
Business Information Centers (BICs).
BICs offer a small business reference library, management video tapes, and computer technology to help plan a business.
BICs also offer one-on-one
assistance. Individuals who are in business or are interested in starting a business can use BICs as often as they wish at
no charge.
Service Corps of Retired Executives (SCORE).
SCORE provides small business counseling and training to current and prospective small business owners. SCORE is made
up of current and former
business people who offer their expertise and knowledge to help people start, manage, and expand a small business. SCORE also
offers a variety of
small business workshops.
Internet. You can access the SBA website at www.sba.gov. While visiting the SBA website, you can find a variety of information of interest to small business owners.
Phone. Call the SBA Answer Desk at 1–800– UASK–SBA (1–800–827–5722) for general information about programs available to assist small business owners.
Walk-in. You can walk in to a Small Business Development Center or Business Information Center to request assistance with your small business. To find the location nearest you, access the SBA on the Internet or call the SBA Answer Desk. Other federal agencies also publish publications and pamphlets to assist small businesses. Most of these are available from the Superintendent of Documents at the Government Printing Office. You can get information and order these publications and pamphlets in several ways.
Internet. You can access the GPO website at www.access.gpo.gov.
Phone. Call the GPO toll-free at 1–866–512–1800 or at (202) 512–1800 from the local
Washington, DC area.
Mail. Write to the GPO at the following address.
Publications Index | 2003 Tax Help Archives | Tax Help Archives | Home © 2005, UncleFed.com
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