Check List To Start New Business and Tips to maintain successful business!

1. Choose the right structure for your business for instance; Sole proprietorship, Partnership, C-Corporation, S-Corporation, Limited Liability Company, Limited Partnership, Non-profit Organization, Professional Corporation, Professional Limited Liability Company or other legal entities and retain a professional if needed to assist you to explain the difference among different business structures as mentioned above.http://bit.ly/cYfl5F
2. Select the right name for your business to represent your product(s) or service(s) offering to your customershttp://bit.ly/a1Vl9Z
3. Check the company name availability with the state or county before applying to avoid delay in company registration or possible rejection due to non availability of name with the state of county. http://bit.ly/a1Vl9Z
4. Check with the state or county processing time to register your company. http://bit.ly/daJo8q
5. Do you need sales tax permit to collect sales tax from your customers? http://bit.ly/aPVeef
6. Do you need Employer Identification Number to hire employees or filing taxes? http://bit.ly/8ZTGLC
7. Do you need workers’ compensation insurance to hire employees? http://bit.ly/aFgzJT
8. Do you need disability insurance to hire employees? http://bit.ly/96JVi2
9. Do you need any insurance to safe-guard your assets for instance, Error and Omission or General Liability?http://bit.ly/cYfl5F
10. Do you need certificate of good standing or certificate of status of your legal entity to open bank account? http://bit.ly/9vfw0O
11. Do you need any other licenses or registrations before conducting business and avoid delaying starting up a business? http://bit.ly/cYfl5F
12. Do you need to file annual report, Biennial Statements, Statement of Information, initial report or franchise taxes to complete your business registration? http://bit.ly/b8Dw9m
13. Do you need to run legal notices to maintain legal status and to complete company registration of your entity? http://bit.ly/cg5lsw
14. Do you need an accountant to maintain your books and records and filing monthly quarterly and yearly taxes with appropriate departments? http://bit.ly/cfzvoI

Infotaxsquare Tips to maintain successful business

A new business can be a hassle to set up. Your business success depends on your focused attention. The following is a list for maintaining successful business:

1. Avoid mixing personal finances with your business finances.
2. Tax planning early in your company’s setup can save you hundreds of dollars later on.
3. Controlling your collection process will strengthen your cash flow which is critical to a new business.
4. Take advantage of new tax law changes as they happen.
5. Timely filing of payroll and sales tax reports to save your money
6. Timely file annual reports to maintain your company in good standing.
7. Select right accountant to give you timely advice and planning.

All the best!

To Read More : Check List To Start New Business and Tips to maintain successful business!

Source : Business Documents Filing in 50 States

INCOME TAX-FILING INFORMATION!

DO I HAVE TO FILE RETURN?

You must file a federal income tax return if you are a citizen or resident of the United States or a resident of Puerto Rico and you meet the filing requirements for any of the following categories that apply to you.

The filing requirements apply even if you do not owe tax.

1. Individuals—In General:

If you are a U.S. citizen or resident, you must file a return depends on three factors:

• Your gross income,
• Your filing status, and
• Your age.

Gross income. This includes all income you receive in the form of money, goods, property, and services that is not exempt from tax.

Filing status. Your filing status depends on whether you are single or married and on your family situation. Your filing status is determined on the last day of your tax year, which is December 31 for most taxpayers.

Age. If you are 65 or older at the end of the year, you generally can have a higher amount of gross income than other taxpayers before you must file. You are considered 65 on the day before your 65th birthday.

2. Dependents:

If you are a dependent See the above table to find out whether you must file a return.

Responsibility of parent. Generally, a child is responsible for filing his or her own tax return and for paying any tax on the return. But if a dependent child who must file an income tax return cannot file it for any reason, such as age, then a parent, guardian, or other legally responsible person must file it for the child. If the child cannot sign the return, the parent or guardian must sign the child's name followed by the words “By (your signature), parent for minor child.”

Child's earnings.Amounts a child earns by performing services are his or her gross income. This is true even if under local law the child's parents have the right to the earnings and may actually have received them. If the child does not pay the tax due on this income, the parent is liable for the tax.

3. Children Under Age 18:

If a child's only income is interest and dividends (including capital gain distributions and Alaska Permanent Fund dividends) and certain other conditions are met, a parent can elect to include the child's income on the parent's return. If this election is made, the child does not have to file a return.

4. Self-Employed Persons:

You are self-employed if you:

• Carry on a trade or business as a sole proprietor,
• Are an independent contractor,
• Are a member of a partnership, or
• Are in business for yourself in any other way.

Self-employment can include work in addition to your regular full-time business activities, such as certain part-time work you do at home or in addition to your regular job.

5. Aliens:

Your status as an alien—resident, nonresident, or dual-status—determines whether and how you must file an income tax return.

Resident alien. If you are a resident alien for the entire year, you must file a tax return following the same rules that apply to U.S. citizens. Use the forms discussed in this publication.

Nonresident alien. If you are a nonresident alien, the rules and tax forms that apply to you are different from those that apply to U.S. citizens and resident aliens. See Publication 519 to find out if U.S. income tax laws apply to you and which forms you should file.

Dual-status taxpayer. If you are a resident alien for part of the tax year and a nonresident alien for the rest of the year, you are a dual-status taxpayer. Different rules apply for each part of the year. For information on dual-status taxpayers, see Publication 519.

WHO SHOULD FILE?

Even if you do not have to file, you should file a federal income tax return to get money back if any of the following conditions apply.

• You had federal income tax withheld from your pay or made estimated tax payments.
• You qualify for the earned income credit. See chapter 36 for more information.
• You qualify for the additional child tax credit. See chapter 34 for more information.
• You qualify for the health coverage tax credit.
• You qualify for the refundable credit for prior year minimum tax

WHAT IF I MADE MISTAKE?

Errors may delay your refund or result in notices being sent to you. If you discover an error, you can file an amended return or claim for refund.

You should correct your return if, after you have filed it, you find that:

• You did not report some income,
• You claimed deductions or credits you should not have claimed,
• You did not claim deductions or credits you could have claimed, or
• You should have claimed a different filing status. (Once you file a joint return, you cannot choose to file separate returns for that year after the due date of the return. However, an executor may be able to make this change for a deceased spouse.)

To Read More : INCOME TAX-FILING INFORMATION!

Source : Business Documents Filing in 50 States

Guaranteed Payment

Guaranteed Payment and how it is taxed?

Guaranteed Payments

Internal Revenue Service defines it as guaranteed payments are those made by a partnership to partners that are determined without regard to the partnership's income. A partnership treats guaranteed payments for services, or for the use of capital, as if they were made to a person who is not a partner. This treatment is for purposes of determining gross income and deductible business expenses only. For other tax purposes, guaranteed payments are treated as a partner's distributive share of ordinary income. Guaranteed payments are not subject to income tax withholding.

Guaranteed payments made to partners for organizing the partnership or syndicating interests in the partnership are capital expenses. Generally, organizational and syndication expenses are not deductible by the partnership. However, a partnership can elect to deduct a portion of its organizational expenses and amortize the remaining expenses. Organizational expenses (if the election is not made) and syndication expenses paid to partners must be reported on the partners' Schedule K-1 as guaranteed payments.

Minimum payment. If a partner is to receive a minimum payment from the partnership, the guaranteed payment is the amount by which the minimum payment is more than the partner's distributive share of the partnership income before taking into account the guaranteed payment.

Example.

Under a partnership agreement, Divya is to receive 30% of the partnership income, but not less than $8,000. The partnership has net income of $20,000. Divya's share, without regard to the minimum guarantee, is $6,000 (30% × $20,000). The guaranteed payment that can be deducted by the partnership is $2,000 ($8,000 − $6,000). Divya's income from the partnership is $8,000, and the remaining $12,000 of partnership income will be reported by the other partners in proportion to their shares under the partnership agreement.

If the partnership net income had been $30,000, there would have been no guaranteed payment since her share, without regard to the guarantee, would have been greater than the guarantee.

Self-employed health insurance premiums Premiums for health insurance paid by a partnership on behalf of a partner, for services as a partner, are treated as guaranteed payments. The partnership can deduct the payments as a business expense, and the partner must include them in gross income. However, if the partnership accounts for insurance paid for a partner as a reduction in distributions to the partner, the partnership cannot deduct the premiums.

A partner who qualifies can deduct 100% of the health insurance premiums paid by the partnership on his or her behalf as an adjustment to income. The partner cannot deduct the premiums for any calendar month, or part of a month, in which the partner is eligible to participate in any subsidized health plan maintained by any employer of the partner or the partner's spouse.

Including payments in partner's income:

Guaranteed payments are included in income in the partner's tax year in which the partnership's tax year ends.

Example 1

Under the terms of a partnership agreement, Erica is entitled to a fixed annual payment of $10,000 without regard to the income of the partnership. Her distributive share of the partnership income is 10%. The partnership has $50,000 of ordinary income after deducting the guaranteed payment. She must include ordinary income of $15,000 ($10,000 guaranteed payment + $5,000 ($50,000 × 10%) distributive share) on her individual income tax return for her tax year in which the partnership's tax year ends.

Example 2.

Sam is a calendar year taxpayer who is a partner in a partnership. The partnership uses a fiscal year that ended January 31, 2007. Sam received guaranteed payments from the partnership from February 1, 2006, until December 31, 2006. He must include these guaranteed payments in income for 2007 and report them on his 2007 income tax return.

Payments resulting in loss. If guaranteed payments to a partner result in a partnership loss in which the partner shares, the partner must report the full amount of the guaranteed payments as ordinary income. The partner separately takes into account his or her distributive share of the partnership loss, to the extent of the adjusted basis of the partner's partnership interest.

Reporting of Guaranteed Payment for tax purposes

The partnership generally deducts guaranteed payments as a business expense. They are also listed on the partnership return. The individual partner reports guaranteed payments on as ordinary income, along with his or her distributive share of the partnership's other ordinary income.

Timing Considerations

For tax purposes, timing consideration is also an important factor. Guaranteed payments are always ordinary income to the receiving partner and must be included in taxable income for his or her tax year within which ends the partnership tax year in which the partnership deducted such payments as paid or accrued according to its method of accounting. This allows some tax deferral opportunities.

Example

Say for instance, a partnership is on a fiscal year ending September 30 where as a partner is on a calendar year. If the partner receives a guaranteed payment in December 2003, it would have to be included in the partner's income for 2004, not 2003. This is the partner's fiscal year within which the partnership's taxable year ends in which it deducted the payment. In effect, the payment is deemed to have been made in September 2004. Of course, it's a two way street: If the partnership were on an accrual basis with a calendar year ending December 31, 2003, and it made a guaranteed payment to a partner in January 2004, but accrued the payment on December 31, 2003, the partner must include the payment in his or her 2003 income.

Business Taxes

Certain local taxing jurisdictions impose a tax on unincorporated businesses operating within their jurisdictions. Like the New York City Unincorporated Business Tax (UBT) that is imposed on the business income of every unincorporated business that is carried on - wholly or partly - in New York City or even if it does not maintain an office in New York City.

Unincorporated businesses includes trades, businesses, professions, and occupations that are conducted by, engaged in, or in the process of being liquidated by an individual, partnership, limited liability company, fiduciary, association, estate or trust.

The tax is levied on both sole proprietorships and partnerships. Few activities are exempt from the UBT like a person or entity, other than a dealer, who is only engaged in the purchase, holding, and sale of property for its own account (such as in the case of investment activities) and a person or entity that is an owner, lessee, or fiduciary, and which is engaged in holding, leasing, or managing real property for its own account.

Guaranteed payments are always income for services rendered to the receiving partner. Therefore, they are deemed to be self-employment income, which after allowing for expenses, is subject to the UBT as well as self- employment Social Security.

Example: BC is a real estate partnership that owns two apartment houses. Partner A provides services for which she wishes to be rewarded with $40,000 per year and this is structured as a guaranteed payment. Assume the net rental income of the partnership is $25,000 before any guaranteed payments, and the partners divide income/losses equally.

Partner A would report the net amount of $35,000 in two different pieces. The $40,000 guaranteed payment is self-employment income, which after expenses, would be subject to self-employment tax. In addition, this net amount is subject to any local business taxes such as the UBT. The $5,000 loss is part of A's distributive share and would be reported on Schedule E as an active real estate rental loss and as such would be deductible against other items of income unless A's AGI is too high. Each of the other partners would show a loss of $5,000 as his distributive share.

If we assume A has $10,000 of expenses against the guaranteed payment of $40,000, the net of $30,000 will be subject to both the UBT and self- employment Social Security. Assuming the rates to be 5% and 15.3% respectively, these additional taxes would come to $6,090.

Partnership transfer issue in line with Guaranteed payment

Under IRC Sec. 721 no gain or loss is recognized to a partnership or any of its partners when a contribution of property is made to the partnership in exchange for a partnership interest. Additionally, under IRC Sec. 731, in the case of a distribution from a partnership to a partner, no gain is recognized to a partner except to the extent the distribution exceeds the partner's adjusted basis of his or her interest in the partnership.

Example: Mike, a partner in the Eden partnership, owns an asset that cost him $6,000 and that is now worth $10,000. He contributes this asset to the partnership in exchange for an additional $10,000 partnership interest. Shortly thereafter, he receives a $4,000 cash distribution from the partnership. Mike has "will get appreciated gain, but will not be taxed on it.

To help deal with this situation, amendment was made in IRC Sec. 707(a)(2)(B) known as the "disguised sale rules." This section covers situations where there is a direct or indirect transfer of money or other property by a partner to a partnership followed by a transfer of money or other property by the partnership to the partner (or another partner). When the transactions, viewed together, are properly characterized as a sale or exchange of property, they shall be treated either as transactions between a partnership and a partner not acting in his capacity as a partner or as between two partners not acting within the partnership.

Guaranteed payments for services should not be affected by these rules as they should be clearly mentioned in the partnership agreement as compensation for particular services rendered and not payments related to any contribution of property to the partnership. Even with these payments, however, it would be wise to keep the payments reasonable and explicitly state how they were determined.

The most care should be taken with guaranteed payments for the use of capital. There is a presumption that a guaranteed payment for the use of capital is a true guaranteed payment and not a disguised sale. The presumption will be sustained as long as the amount is reasonable and the relevant acts and circumstances clearly show that a disguised sale has not taken place.

To Read More : Guaranteed Payment
Source : Business Documents Filing in 50 States

Choosing Business Entity

It is very important for an individual to choose the right structure from the Beginning to incorporate its business to avoid paying more taxes and facing re-structuring complexities in future. When beginning a business, you must decide what form of business entity and state is appropriate to establish your business. Your form of business determines which income tax return form you have to file. The most common forms of business are the sole proprietorship, partnership, corporation, and S corporation. A Limited Liability Company (LLC) is a relatively new business structure allowed by state statute. Legal and tax considerations enter into selecting a business structure.

MOST COMMON TYPES OF ORGANIZATION:

Sole Proprietorship - this is the easiest method of organizing your business. A sole proprietorship can be conducted by a single individual, or by an individual and his or her spouse. There are no specific filing requirements other than a business license and fictitious business name. The owner is taxed as an individual on the income or losses of the business. The major disadvantage of the sole proprietor is that the individual owner is personally responsible for all debts and liabilities of the business. This means that all of your personal assets, not just the assets of the business, are at risk.

Partnership/ General Partnership - Partnership is a form of business in which two or more sound persons come together to form a new business with the same interest in mind. In Partnership, all partners act towards the single strategic direction and all partners are equally liable. In partnership all partners share profit and losses in the ratio agreed upon. Partners are responsible for the other partner's business actions, as well as their own. Each partner is bound by the acts and representations made by their co-partners in dealing and transacting with third persons.

C Corporation - is an organization that is organized under specific provisions of the General Corporation Law. A Corporation must have corporate officers and bylaws, and must be registered with the State. In addition, the corporation will be taxed at the State and Federal level on its earnings. A corporation offers the protection from personal liability for the owners. This "corporate veil" of protection does not offer protection from liability in the case of fraud, failure to pay taxes, under capitalization of the corporation, or commingling of personal and corporate funds.

S Corporation - Similar to the "C" Corporation, the "S" corporation offers all the benefits of a corporation, but with a different tax structure. S corporations pay no Federal income tax, but pay state level tax. The S corporation's shareholders report the company's income or losses on their personal tax returns.

Limited Liability Company (LLC) - combines the limited liability protection of a corporation with the flexibility and pass through taxation of a partnership. Like the shareholders of a corporation, the owners (members) of an LLC are not personally responsible for the debts or liabilities of the LLC. The LLC has no limitations on who may be involved. The LLC can be managed by its members or by managers.

Professional Corporations (PCs)- are these entities of corporation for which many act of company make the special provision, regulating the use of the corporate form by licensed professionals such as attorneys, architects, engineers, accountants and doctors. A professional corporation is a corporation that is formed for the purpose of providing a professional service that by law a for-profit or nonprofit corporation is prohibited from rendering.

Professional limited liability companies (PLLC's)- are corporations for the purpose of providing professional services. Usually, professions where the state requires a license to provide services, such as a doctor, chiropractor, lawyer, accountant, architect, or engineer, require the formation of a Professional Limited Liability Company (PLLC

Non Profit Organization- A non-profit organization is an organization that does not distribute its surplus funds to owners or shareholders, but instead uses them to help pursue its goals. Examples of nonprofit organizations include charities (i.e. charitable organizations), trade unions, and public arts organizations. Most governments and government agencies meet this definition, but in most countries they are considered a separate type of organization and not counted as nonprofit organizations.

Religious Organization - A religious corporation is a type of religious non-profit organization, which has been incorporated under the law defined by the concerned authorities. It is usually the government, who holds records of non-profit religious organizations, is responsible for regulating these religious not-for-profit corporations, say for instance Secretary of State. These not-for-profit religious corporations are recognized under the law on sub national level and usually Secretary of State of that particular state will be monitoring the activities of such religious corporations.

To Read More : Choosing Business Entity

Source : Business Documents Filing in 50 States

How to form an S Corporation?

S Corporation

An "S-Corporation" is a regular corporation that has between 1 and 100 shareholders and that passes-through net income or losses to shareholders. An S Corp is a corporation that elects to be treated as a pass-through entity (such as a sole proprietorship or partnership) for tax purposes. Since all corporate income is "passed through" directly to the shareholders who include the income on their individual tax returns, S Corporation are not subject to double taxation.

To Read More: How to form an S Corporation?

Source: Business Documents Filing In All 50 States

How to create a partnership?

Partnership

Partnership is a form of business in which two or more sound persons come together to form a new business with the same interest in mind. In Partnership, all partners act towards the single strategic direction and all partners are equally liable. In partnership all partners share profit and losses in the ratio agreed upon. Partners are responsible for the other partner's business actions, as well as their own. Each general partner takes part in the management of the business, and also takes responsibility for the liabilities of the business. If one partner is sued, all partners will be held liable. Anything that one partner does affect all of the partners, because each partner of the partnership is personally responsible for all obligations of the partnership.

To Read More: How to create a partnership?

Source: Business Documents Filing In All 50 States

General Partnership:

A general partnership (or simply partnership) is an association of two or more persons or other persons (such as a corporation and an individual) conduct business as "partners", whether officially or not, with the goal of earning a profit. All members of a general partnership are called General Partners. Each general partner takes part in the management of the business, and also takes responsibility for the liabilities of the business. If one partner is sued, all partners will be held liable. Anything that one partner does affect all of the partners, because each partner of the general partnership is personally responsible for all obligations of the general partnership. Forming general partnership is the least desirable for this reason. Liability of General Partnership. Points mentioned below can better describe the liability of General Partnership.

* Every partner acts on behalf of the whole partnership business; therefore, each partner is liable for his or her own actions.

* Every partner is liable for the actions of the other partners.

* Every partner is liable for the actions of the employees of the business.

To Read More: General Partnership:

Source: Business Documents Filing In All 50 States

Why should I create Partnership?

Persons with small investment often choose a sole proprietor business structure when starting up. Greater rewards may result from forming a partnership. Partnership registration offer more freedom for business owners with shared business tasks and the potential to earn greater profits. There are many advantages to sharing a business with partners, including:

* A partnership formation can be easy and inexpensive to set up.

* If you create partnership, there will be more capital because you combine your resources with the other partner.

* One partner can sustain the business during another's illness or absence due to other commitments.

* That will cut down the burden of working different tasks.

* Fairly easy to dissolve and recover your share of investment.

* All Partners work and own the profit as per the settled terms and conditions.

To Read More: Why should I create Partnership?

Source: Business Documents Filing In All 50 States

What is partnership/General Partnership?

Partnership is a form of business in which two or more sound persons come together to form a new business with the same interest in mind. In Partnership, all partners act towards the single strategic direction and all partners are equally liable. In partnership all partners share profit and losses in the ratio agreed upon.

Partners are responsible for the other partner's business actions, as well as their own. Each partner is bound by the acts and representations made by their co-partners in dealing and transacting with third persons. Registering a partnership is fairly simple; each partner must agree to do business with the others. Moreover, a partner may contribute not only money or capital contribution. He may likewise put in his business or industry in the partnership.

To Read More: What is partnership/General Partnership?
Source: Business Documents Filing In All 50 States

Who is required to collect sales tax in the state of Pennsylvania?

PERSONS REQUIRED TO BE LICENSED:

a. Sales, Use and Hotel Occupancy Taxes

Every person, association, fiduciary, partnership, corporation, or other entity making taxable sales of tangible personal property or services must obtain a Sales Tax license. Sales include leasing or renting of tangible personal property and the rental of hotel or motel rooms. Failure to be licensed may subject the seller to a fine. Entities which make taxable purchases but did not pay sales tax upon purchase should report use tax directly to the Department.

b. Public Transportation Assistance Fund Taxes and Fees

(Every person, association, fiduciary, partnership, corporation, or other entity selling new tires for highway use, or renting, or leasing of motor vehicles must obtain a separate license. Failure to do so may subject the seller to a fine. Entities leasing motor vehicles from no registered vendors should report tax directly to the Department.

To Read More: Who is required to collect sales tax in the state of Pennsylvania?

Source: Business Documents Filing In All 50 States

Indiana Secretary of State alerts mortgage professionals of impending test deadline !

Mortgage loan originators and principal managers in Indiana must pass exam by July 1 or risk losing license; only 41 percent have passed to date

(Indianapolis) – Indiana Secretary of State Todd Rokita is alerting Hoosier mortgage professionals of an impending deadline requiring all mortgage loan originators and principal managers to pass the National Component SAFE Test by July 1, 2010.

“It is critical that all mortgage professionals in the state be aware of the July 1 deadline,” said Secretary Rokita. “My office is reaching out to all mortgage loan originators and principal managers to let them know they must take action in order to maintain their license.”

By July 1, 2010, all mortgage loan originators and principal managers must pass the National Component SAFE Test. The test is mandatory based on the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act). The SAFE Act does not allow for any waiver of the test. There is a 30 day waiting period after each unsuccessful attempt at taking the test.

Secretary Rokita’s Indiana Securities Division began sending communications to licensed mortgage loan originators and principal managers in February to alert them of the upcoming deadline. Indiana has 1,086 licensed mortgage loan originators and principal managers. As of May 18, 2010, only 41 percent have passed the SAFE Test.

If a mortgage loan originator or principal manager fails to pass the SAFE Test by July 1, his or her license will be revoked. In accordance with Indiana law, if a license is revoked the Indiana Securities Commissioner must deny all future license applications by that individual.

Mortgage loan originators and principal managers also have the option of surrendering their licenses with the Securities Division prior to July 1, 2010, in order to avoid revocation of the license for failure to pass the exam.

To read more! Indiana Secretary of State alerts mortgage professionals of impending test deadline ! Source: InfoTaxSquare Business Documents Filing In All Fifty States!