Deborah Sweeney, Author at She Owns It

5 Tax Deductions Self-Employed Workers Need to Take Advantage Of by @DeborahSweeney

January 4, 2017 by Deborah Sweeney Leave a Comment

by Deborah Sweeney | Featured Contributor

One New Year’s Resolution that many entrepreneurs probably have at the top of their list is to get a head start on filing taxes. For the self-employed especially, the clock is ticking to get paperwork organized and determine how many business expenses are eligible for deductions. The tax deduction rule of thumb is that the expense must be ordinary and necessary, meaning that it should be accepted in your line of work and also appropriate for it. Here’s a look at five deductions self-employed workers should take advantage of in 2017.

Home office

Do you work out of your home office or use a part of your home for business? You might qualify for a home office deduction, available for all types of homes and homeowners as well as renters.

If you want to qualify for a home office deduction, you need to use that part of your home as a principal place of business exclusively and regularly. The deduction is typically based on the percentage of your home where it is used for business. Choose between the following two available options in order to determine the home deduction percentage.

Regular Method: This method determines actual home office expenses including areas like mortgage interest, insurance, utilities, and repairs. You can figure these out on Form 8829 Expenses for Business Use of Your Home and then report the deductions on line 30 of Form 1040 Schedule C, Profit or Loss From Business.

Simplified Option: Better known as the Simplified Option for Home Office Deduction, this helps simplify the calculation for the business use of your home. This method allows for a standard deduction of $5 per square foot of home used for business, up to 300 square feet. If you know that you work out of a space that is larger than 300 square feet, consider using the regular method instead.

Standard mileage rates

If you spend a lot of time driving to meet with clients, your expenses for operating a vehicle for business could be deductible. Here’s what the 2016 standard mileage rates for cars, vans, and pickups looks like for business, medical, and moving purposes.

54 cents per mile for business miles driven, down from 57.5 cents for 2015
19 cents per mile driven for medical or moving purposes, down from 23 cents for 2015
14 cents per mile driven in service of charitable organizations

Remember that if your employer reimburses your travel, you can’t deduct that expense. However, if you are only reimbursed for a small portion of the standard mileage rate, you will be able to deduct the excess amount per mile.

Health insurance premiums

According to the IRS, anyone self-employed with a net profit for the year may qualify for health insurance deduction. Keep in mind that this is not an itemized deduction, but an adjustment to income on premiums that you paid on a health insurance policy. Use Form 1040, Schedule A, Itemized Deductions to include the remainder with any other medical expenses as an itemized deduction if you haven’t claimed 100% of your paid premiums.

Website and software

Being self-employed means working hard to set up a professional online presence. If you created a new website over the last year or purchased software programs that you use in your line of work, you can deduct these expenses. Website deductions may include domain fees, maintenance, and/or building costs.

Incorporating your business

If business boomed this year and you incorporated or formed an LLC for your services, congrats! That’s a major step forward in protecting your personal assets as well as the professional assets of the business. It’s also acknowledged by the IRS for deductions. Some of the expenditures that you are able to write off during the business’ first year include state fees and legal costs. My recommendation is that if business is seriously picking up, take the time to incorporate or form an LLC for it. Saving a little extra money during tax season, plus asset protection and legitimacy for your brand — it’s a win-win for starting 2017 with a bang!

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Deborah Sweeney – Legal Expert, CEO, MyCorporation.com – Calabasas, CA

As CEO of MyCorporation Business Services, Inc. (MyCorporation.com), Deborah Sweeney is an advocate for protecting personal and business assets for business owners and entrepreneurs. With her experience in the fields of corporate and intellectual property law, Deborah has evolved from lawyer to business owner. She has extensive experience in the start-up and entrepreneurial industry as she has been involved in the formation of hundreds of thousands of businesses for MyCorporation.com’s customers.

Ms. Sweeney received her JD & MBA degrees from Pepperdine University. She is active in the community and loves working with students and aspiring entrepreneurs. She serves on the Board of Regents at California Lutheran University and is a founding member of Partners of Pepperdine. Deborah has served as an adjunct professor at the University of West Los Angeles and San Fernando School of Law in the areas of corporate and intellectual property law. Ms. Sweeney is also well-recognized for her written work online as a contributing writer with top business and entrepreneurial blogging sites. She is a regular contributor on Forbes, American Express, Social Media Today, and BlogHer among many others.

In her ‘free’ time, Deborah enjoys spending time with her husband and two sons, Benjamin (8) and Christopher (6). Deborah believes in the importance of family and credits the entrepreneurial business model for giving her the flexibility to enjoy both a career and motherhood. Follow her on Twitter @deborahsweeney and @mycorporation.

Deborah Sweeney

http://www.mycorporation.com

10 Items to Cross Off Your End-of-Year Small Business Checklist by @DeborahSweeney

December 12, 2016 by Deborah Sweeney 1 Comment

by Deborah Sweeney | Featured Contributor

The countdown is officially on — less than a month stands between entrepreneurs and the New Year! As small business owners look forward to a fresh slate and new opportunities, they’re also filing documents to report changes made to the business and working hard to wrap up the year’s loose ends. Think you forgot something important from your to-do list? Our checklist covers 10 items to mark off and ensure you’re finishing the year on a strong note.

File a foreign qualification

Did your business expand to another state this year? Are you incorporated in one state, but headquartered in another? You’ll need to file for a foreign qualification in order to legally conduct business in that state. Remember that your corporation or LLC is only domestic in the state it is incorporated in and is considered foreign everywhere else. If you want to be authorized to do business, elsewhere, you have to file for a foreign qualification.

File an annual report

Generally required by most states, annual reports keep your company information — like activities, locations, and contact information — in good standing with the Secretary of State. Be sure to check in with your state’s schedule to see when you are required to file the report. If you don’t file by the deadline, your LLC or corporation may be subjected to late fees and penalties or even dissolution.

Organize documents on a cloud storage system

Where are your receipts? How about your corporate records and minutes? Rather than spend hours trying to hunt down print or digital documents, store them in a cloud based document storage system. Unlike a laptop that could suffer from hard drive issues or lose files, cloud storage allows you to access all files and even share them securely with work team members.

File an amendment

Did the name of your business change this year? What about its ownership or office address? For any changes made to a Corporation or LLC, the state requires filing an article of amendment to ensure accurate corporate records.

File for a dissolution

If you closed a business this year, you have to close the business formally with the state too. By filing for a dissolution, your Corporation or LLC will no longer be considered an active entity with the Secretary of State. This will keep you save money from paying unnecessary taxes and annual state fees. If you don’t file, you’ll continue to make these payments because your business will still be considered to be in existence.

Review your profit and loss statements

How was your financial performance this year? By creating profit and loss statements, you can look back on your revenue for the year. Look at what did and didn’t work compared to previous years in business and use these statements as a guide for what your outlook might be like for the upcoming year.

Check your cash flow

Along with a P&L statement is a cash flow statement AKA a report that shows how your money was spent throughout the year and how much cash you have on hand. Typically, you should look at your cash flow statements based off of three activities: operating (revenue and expenses), investing (any assets purchased or sold), and financial (loans).

Get a head start on tax season

You can never prep too early for tax season! Take this time to schedule in an appointment with the accountant or bookkeeper for your business. Gather any receipts that could qualify for possible deductions, track quarterly estimated tax payments made during the year, and discuss whether or not you’ll need a tax payment extension.

Make payroll corrections

Did anything change with your payroll this year? If so, make note of that on your records for local, state, and federal payroll to ensure you stay in compliance with payroll regulations.

Celebrate accomplishments from this year and set goals for next year

Reflect back on all the standout moments from the year and take pride in all that your small business has accomplished. Reward your employees with small tokens of gratitude like bonuses or even handwritten notes that highlight their hard work. And finally, make your own small business resolutions for the next year. What do you hope to do next and what steps are needed to get there? Create a list of short and long-term goals to get everyone motivated for what’s to come. When the clock strikes midnight on January 1^st, get on your mark, get set, and achieve those goals!

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Deborah Sweeney – Legal Expert, CEO, MyCorporation.com – Calabasas, CA

Deborah Sweeney

http://www.mycorporation.com

4 Strategic Tips For Paying Off Your Business Debt in 2017 by @DeborahSweeney

November 14, 2016 by Deborah Sweeney Leave a Comment

by Deborah Sweeney | Featured Contributor

I had originally considered writing this post with advice for getting out of business debt before the end of 2016, but realized within the given time frame it’s not exactly feasible for most entrepreneurs. Frankly, making fast payments is also not the smart way to approach debt either.

No matter how much you owe, don’t panic. Instead, educate yourself about how the numbers added up and what your repayment options look like for getting out of debt. By understanding how your current financial standing affects your small business, you can create a strategic plan of action for paying it off.

It’s time to get a head start on paying off debt. Here are the key elements that every plan should cover — and hopefully, these tips keep you from repeating past money mistakes with your small business.

Hang on to, and review, your receipts.

Before you can plan on how much you want to save or what costs to cut back on, take a look at the receipts for business expenses. Receipts serve as a good footprint for determining which expenses are investments versus those that are frivolous purchases. If you already spot small items like daily coffee runs or lunches adding up that don’t contribute to the business, you can start curbing that kind of spending since it isn’t a necessity.

Pro tip: if you’ve made a charitable donation on behalf of the company or recently took a trip on business, it might be eligible for a tax deduction. Save these receipts when you file your taxes!

Begin cutting costs.

While some say it’s a better idea to stop creating debt altogether, most entrepreneurs find it easier to review receipts and financial statements to study profits and losses over the last six months. By doing so, they’re able to determine what can be cut out of the budget before paying off debt.

When trimming costs, be mindful of expenses that will negatively impact your employees or customers like raising the price tag substantially on a popular product or cutting vacation benefits. If you’re not sure where to start first, here are a few simple ideas to get you started.

Turning off lights and computers at the end of the day to save on electricity bills.
Recycling and going paperless.
Joining a coworking space if a lease on a commercial building becomes too expensive.

Determine the best way to eliminate debt.

Two popular methods of paying down debt include the Snowball Method and the Stack Method. The Snowball Method consists of paying off debts or loans that have the smallest balances first while gradually moving on to those with larger amounts. Typically used for credit card debt, the thought process is that by the time you’re down to the single largest debt, you have no other expenses distracting you from paying it off in full.

The Stack Method takes the opposite approach in that you pay off the debt that has the highest interest rate first and gradually move on to the smaller ones. While the decision is different for every entrepreneur, my personal recommendation is to use the Stack Method. Startups that carry business loans with a high interest rate struggle enormously, as does any business with high interest on a company credit card. By prioritizing paying off debt with the highest interest first, you can pay down other outstanding debt faster. Once your business credit cards are paid off, your credit score will improve and allow for more opportunities to benefit the business.

Consider consolidating or working with a professional.

One of the most effective ways to pay off debt is to consolidate and refinance loans. By doing this, the loans may qualify for lower interest rates reducing the amount paid each month. Much like determining whether you would be a better fit for the Snowball or Stack Method, many factors go into play depending on your business and the nature of its debts.

If you’re still not sure what the best option for your business is, don’t force yourself to pick a plan for repayment that won’t work for you. Speak with a debt expert and see which option is the best fit or if there are other options that might be even better.

As I mentioned in the opening, the key to paying off debt is all in the details. Understanding what you owe, how it accumulated, and what your options for repayment look like truly matter when you pay off business debt in order to further invest in the future of the business and its growth.

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Deborah Sweeney – Legal Expert, CEO, MyCorporation.com – Calabasas, CA

Deborah Sweeney

http://www.mycorporation.com

3 Myths About Outsourcing Payroll by @DeborahSweeney

October 19, 2016 by Deborah Sweeney Leave a Comment

by Deborah Sweeney | Featured Contributor

“I’m ready to outsource my payroll! Now what?”

If you recently made this statement, congratulations! As USA Today columnist Rhonda Abrams once famously put it, if you have one employee it’s time to get a payroll service. The benefits of outsourcing payroll are seemingly endless — no more bouncing the books around to employees to tackle, worrying that you might forget to file a quarterly report, or wasting time or energy figuring out finances when you could be focusing on growing your business.

However, not everyone is so quick to delegate these duties elsewhere. For as much good as a third-party service can do, there are still certain misconceptions that may make businesses wary about outsourcing this kind of confidential information, even to a trusted provider. Let’s debunk three of the most common ones.

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Deborah Sweeney

http://www.mycorporation.com

Is Your Social Media Campaign Opening You Up To Liability? by @DeborahSweeney

August 3, 2016 by Deborah Sweeney Leave a Comment

by Deborah Sweeney | Featured Contributor

Companies offering goods for sale have wisely embraced social media to get their products out to as many people as they can. Oftentimes, these companies employ creative marketing campaigns that draw people to their products. These marketing campaigns can help your business grow exponentially with some smart and flashy presentation. However, the words you use within your advertisements could be opening your company up to a much greater risk than you first anticipated.

It’s common for companies to want to show how much they believe in their product. If the product or company is new, they advertise in a way that shows the company will stand by its goods. Other companies use advertisements that talk about the benefits of their products in a clear cut way. Though this has been a common practice in marketing for years, certain expressions can constitute an express warranty of a product. When this occurs, a company may be held liable if their product breaks the promise the company made while advertising. These types of accidental express warranties can happen with thought out and long planned marketing campaigns. This means with the quick and fluid nature of social media, every advertising post or tweet can get you into hot water. However, there are some easy steps you can take that will keep your costumers engaged without you opening up yourself to unwanted problems.

Make Sure you are Puffing

“Merely puffing” is a term of art that is derived from an English court case from 1893. However, courts in the United States still use it to describe marketing speak for advertising. Basically, the courts use the term when they find that a company used claims in their advertising that was meant to sell the product by boasting or exaggerating the claims. These types of claims are ones that an average reasonable person will understand as statements being used to sell a product. These types of claims will never be held to be an express warranty. Most companies utilizing social media rely heavily on puffing as it is a great way to entice customers and advocate for your brand.

Statements like “this is the only non-slip mat your friends will ever want” helps convey the greatness of the product without saying anything too specific. A consumer will not be able to point to an express statement giving them a guarantee unlike “this non-slip mat makes it impossible to fall.” There are plenty of ways that a product can be advertised without ever mentioning the specifics of quality or characteristics of the product. When using social media, you do not have to hold back on how awesome your product is so feel free to tweet or post about how amazing it really is. Just remember, when using social media portals, using statements that are vague or highly subjective will keep you in the clear.

Try Not to Promise What you Can’t Deliver

Direct promises and guarantees can be tricky business online. Stating claims about your product on the web can open the flood gates to some major issues if you aren’t careful. However, there is no reason you cannot mention the amazing things your product can do. When talking about your product, the most important thing to keep in mind is to claim only what the product is actually capable of doing. Imagine you were looking for a can of chicken broth to make some soup and you needed one without any bones. You come across a can that states it is boneless so you purchase it. However, when you go to use it, there are tons of bones in it. The fact that your purchase relied on the false promise of boneless broth the producer of the product will be held liable, even if all of their other cans had no bones. For the same reason, it is important to promise only what your product can deliver. Stating claims that sound good but are hard to guarantee is a risky move, especially online where information travels fast. This risky behavior could not only make your product look bad, but people may have legal claims against your company. That’s why it is so important to stand by your product in the best way you can, rather than stretch the truth to catch a couple of extra dollars. The small bump up in money won’t make the huge headache worth it.

Write out Your Rules

Another popular social media campaign aspect is setting up giveaways and guarantee campaigns. These campaigns can vary from “the first hundred people who retweet a post will win a free product” to saying “this product will keep you from getting a cold for two weeks or we will give you a hundred dollars.” When setting up an advertising campaign that involves an event, sweepstakes or challenge, it is important that you lay out your ground rules. The reason for this is to set up a situation where you control the outcome of your marketing goal. An online place, such as your website, where any participant can find the guidelines is all you really need. Just make sure you outline the requirements and the steps for how participants can receive their refund or prize. You want to make sure to have the information readily available for anyone who wants to participate and create clean steps that people must take to win the prize. You can place limitations on who wins, like one grand prize winner, or limit things like all the paperwork that must be filed with the company to show the participant has completed the entire process to be eligible. By stating these rules, you can create a campaign that provides great social media marketing while also protecting your assets.

By making sure your marketing team and you follow these simple rules, you can avoid unpleasant issues that may arise, which can lead to a bad reputation for your company. Just remember, you can stand by your product and see the growth of your brand as long as you use social media wisely.

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Deborah Sweeney – Legal Expert, CEO, MyCorporation.com – Calabasas, CA

Deborah Sweeney

http://www.mycorporation.com

The Basics of Establishing a Web Presence by @DeborahSweeney

May 27, 2016 by Deborah Sweeney Leave a Comment

by Deborah Sweeney | Featured Contributor

A 2014 study by Google found that a little over half of small businesses have a website, though it’s likely that number has gone up since the survey was done. Still, the fact that a little under half of small businesses don’t even have a website it appalling – without one you are losing customers every day. Over 50% of people surveyed said they look up a business online before making a purchase, and that same study found local searches are twice as likely to lead to a purchase. Creating a solid web presence, though, is more than just parking a site under ‘yourbusiness.com’ – you’re going to have to put in a bit more effort to see any real returns.

Domains and Websites

This is step one – buy your company’s related domain name and publish a site. The site doesn’t have to be fantastic, and there are plenty of services online that’ll help someone with little to no web experience publish a decent looking website. When designing it, though, remember that over 60% of all web traffic is now mobile, so at this stage use eye-catching graphics and write short, easy to read content. Your business’s name, address, phone number, and services offered should all be front and center. As a side-note, don’t ignore other top-level domain variants like ‘yourbusiness.net’ or ‘yourbusiness.biz.’ They aren’t as important as a .com, but it’s never a bad idea to buy as many reasonable tld variants as you can.

Social Media

Social marketing is more than Facebook, though having an active profile there is important. You’ll want to register your business on every major site – Twitter, LinkedIn, and even Instagram or Pinterest if you think you can market your product visually. Google+ needs to be on your list as well. Recently the site has been making moves to separate + from the more important ‘Local Listings,’ but that hasn’t happened yet. So grab a ‘Google My Business’ page while you can, and make sure your listing is up to date and looks nice. Then when Google inevitably separates their local/business section from Plus, you’ll be in a good spot to adapt to whatever changes Google implements.

Blogging/Cross-Blogging

Content marketing is how you turn your web presence from good to great. 70% of consumers now say they prefer to get to know a company through articles over ads, so producing good, well-written content is a must, especially if you’re based online or do business with people you do not personally see. The idea behind blogging is to foster trust in, and recognition of, your brand, so don’t just throw 800-word ads up every week and think that’ll do. Rather, you need to identify good topics about which you can write knowledgeably. When you’re first starting out, try focusing on common questions or sources of customer frustration. Then, as you get some experience, you can venture into advising on industry-specific issues. And, once you’re seen as something as a thought-leader, you can try cross-blogging with other companies and outlets. The more links into your site you have, the better your search engine ranking.

Creating a web presence requires much more than a website, though it’s a good place to start. The majority of your target market browse the internet, and a strong web presence makes it much more likely they’ll recognize, trust, and eventually patronize your company. Different business will have different needs, but at the very least make sure your business has a presence with its own site and on the major social networks. Then, as you grow, you can work on expanding that presence through content marketing. Before you know it your own small business will be popping up all over the internet!

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Deborah Sweeney – Legal Expert, CEO, MyCorporation.com – Calabasas, CA

Deborah Sweeney

http://www.mycorporation.com

Five Tips for Expanding Your Business by @DeborahSweeney

March 29, 2016 by Deborah Sweeney 1 Comment

by Deborah Sweeney | Featured Contributor

Expanding your business is, quite honestly, a lot like starting it. The steps, paperwork, and investments are all similar. Despite that, there are a few key differences that trip up small business owners. Expansion takes place over a much longer period of time, and you have to be careful not to hurt or ignore your original business while expanding into new markets. MyCorporation was actually suffering from over-expansion when I took it over, and there is nothing worse than having to forcibly shrink a company. So, to help other business owners avoid that unfortunate process, I usually give a few tips to those looking to expand.

Plan, plan, plan

The problem with our expansion under the previous owners was it was not an organic process. The company was structured in a way that put a strict time frame on the very lofty goals those in charge required of middle-management. Planning, if it was ever done, focused on the short-term. Before I decided to try expanding the company myself, I knew I had to specifically plan every move I made. That means setting milestones, sticking to budgets, and even having a way out if my ideas were not working. What do you want to do? Tap a new market? Enter a new city? Offer a new product? Track the steps towards that goal so you have a way to gauge how your expansion is going. There were a couple of times where I felt we spent too much and achieved too few milestones, so I backed off, re-wrote the plan of attack, and tried again.

Beg for Criticism

Once you have your plan written, beg anyone and everyone to take a look and talk through it with you. Parents, spouses, colleagues, old professors; really use your professional and personal network. It doesn’t matter how well trained you are, or how much experience you have, there will be something you missed. Expansion is a serious commitment of time, capital, and energy so, while it can be hard hearing criticism, the more holes poked in your plan, the better off you will be after you fill them.

Scale everything

One of the biggest misconceptions about expanding your business is that it happens all at once. You just decide to open a new store, or target a new demographic, and then you follow through. That simply is not the case. Expansion is best done through scaling. That was actually our biggest problem before I took over – management hired tons of salespeople, without investing in anything else. So while we got more orders, our infrastructure, equipment, and sale process never grew to match. This quickly became a logistical nightmare. Orders were dropped, people were upset, and we risked losing customers. After I scaled back, I invested in streamlining our order processing and filing before I started to salespeople back on so, when we did get more customers, we could handle them. It doesn’t matter if you’re looking at another location, or hoping to bring on different customers, or trying to sell something new. You need scale your business proportionately so it can support your goal.

Keep Customers Informed

When you finally start expanding your business, it is a good idea to let your customers know. You don’t have to share every, little detail, but a broad overview of what you’re doing shows your regulars you care about their business and want to explain why everything may feel a little hectic. People like to support their favorite businesses, and they will appreciate that small gesture. Generating a little buzz can only help your expansion efforts, so don’t shy away from this marketing opportunity.

New Licenses, Permits, and Registrations

Finally, don’t overlook any new legal paperwork you need. Heading into a new city means permits, licensing, and registering with the local tax board. Bringing on staff could affect your benefits package and tax brackets. A new product or service might require extra insurance or compliance with new regulations and laws. Make sure you fully research what you are getting into so that your expansion is not hindered by a misfiled or forgotten form.

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Deborah Sweeney – Legal Expert, CEO, MyCorporation.com – Calabasas, CA

Deborah Sweeney

http://www.mycorporation.com

Take These Three Steps to Grow Your Brand Right Now by @deborahsweeney

March 17, 2016 by Deborah Sweeney Leave a Comment

by Deborah Sweeney | Featured Contributor

Whether you and your business are new to the game, or you’ve been in business for a while and feel as though you’ve hit a lull, every business can stand to learn a new trick or two. If you’ve been wanting to take your business to the next level, but you’re at a loss for what comes next, try implementing these three easy tips for growing your business right now!

Amp up your cross-blogging.

Whether your company has a blog or not, writing guest posts for other blogs in your industry can be very beneficial to your business. You get to completely double your exposure by showcasing an article you wrote (that ideally links back to your website somewhere) to a new group of potential customers who haven’t previously heard about you, and might not have heard about you were you not being featured on a new outlet.

If you do have a blog, try and create cross-blogging relationships with other blogs in your industry. Most cross-blogging typically occurs once a month for each outlet, but if you find an outlet that really grooves with your company and vice versa, feel free to establish a more frequent cross-blogging rate. Conversely, if writing a lot of blogs isn’t something your team has the time to do, you can also arrange something that occurs once every couple months. Establishing a cross-blogging relationship with a company in your (or in a similar) industry can often times lead to a partnership down the road that goes beyond simply swapping blogs.

Stay on top of your marketing.

A large part of marketing these days is simply being a master of all things social media. The only way to know your way around social sites is to actively partake in them on a daily basis. Never leave your audience hanging during the work week- you should at least be posting once a day to let your followers know you are a serious business with a serious online presence. As social sites continue to change in a non-stop way, the best way to adapt is to keep up and be an active user every day. If you take a break from your social sites, not only will your customers be wondering where you went, but something major could change that you may not be accustomed to upon your return, setting your business behind its competitors.

Update your company culture.

Typically, behind every strong brand is a strong team of employees. The most successful businesses have a group of employees who not only get along, but who work together for the betterment of the company. Achieve this ideal company culture by paying special attention to who you hire. On top of skill sets, really think about how these potential employees will mesh with the rest of your team.

Don’t be afraid to liven things up by keeping the office a fun, warm place to be. Celebrate birthdays, watch major sports games together in the break room, take office field trips to the nearest frozen yogurt establishment on the hotter days this summer- don’t be afraid to get creative!

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Deborah Sweeney – Legal Expert, CEO, MyCorporation.com

Deborah Sweeney

http://www.mycorporation.com

What is a Business License and why do I need one? by @DeborahSweeney

January 7, 2016 by Deborah Sweeney Leave a Comment

by Deborah Sweeney | Featured Contributor

When you’re first starting a business, lots of things can seem unclear or confusing. Picking an entity, getting employee contracts figured out, and researching which sorts of licenses and permits pertain to your business personally can all prove to be daunting tasks. Luckily, there are plenty of online resources available to entrepreneurs to help guide them through the thick of it all. The Small Business Administration being one of the many helpful sites out there.

But today, we will make one of the hazier parts of starting a business clear: business licenses!

Firstly, what is a business license?

A business license is any government issued permit or registration that a business owner is required to obtain at the federal, state, or local level in order to legally conduct business. Basically, you need these licenses in order to officially open up shop. So it’s important to get this all squared away as a business owner before you want to start inviting customers into your store front!

Does my business definitely need a business license?

Almost every single local government requires every business inside the city or county to apply for at least the basic business license and pay the basic business license fee. So, in short, yes, your business definitely needs a business license. This license acts as a minimum tax levied against the business in a concentrated area. Do to this, some areas call the license a tax registration certificate instead of a business license altogether.

Now how do I get one for my business?

Any city website is a good place to start to look for how you can get your hands on the necessary business licenses your new company needs. If you’re in the neighborhood, stop by your local city building. They’re sure to have all the business licenses and permits your business could ever need. If you live in a smaller town, however, you may have to go on up to the county level to see if you can find the info you need on the county website, that is, if the small town you live in doesn’t have a licensing bureau. If after that you still can’t find anything, check out the state government. Most of the states have licensing guidance applications, and if they don’t have that, they will have a guideline with licensing requirements for you to easily follow.

Once you’ve filed the initial licenses, do you ever have to renew your licensing and permits?

Yes you do! Once you apply for and receive your license or permit, you will eventually need to renew it. Rules vary, but most likely, your city, county and state are going to need you to pay an annual fee along with renewing your licenses. Since it’s just a renewal, the fee isn’t too large, but don’t forget to renew because if you fail to do so and continue to conduct business, you could have to fork over hundreds if not thousands of dollars! So stay on top of your renewal fees!

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Deborah Sweeney – Legal Expert, CEO, MyCorporation.com – Calabasas, CA

Deborah Sweeney

http://www.mycorporation.com

What’s the difference between an S-Corporation and a C-Corporation? by @DeborahSweeney

December 15, 2015 by Deborah Sweeney Leave a Comment

by Deborah Sweeney | Featured Contributor

For all the new small business owners out there deciding which entity to file their business as, and the already-formed corporations thinking about tacking on a different election, this is the post for you. Choosing the right entity for your business is a huge enough deal, weighing the pros and cons of all the different elections is another entirely different ball game. Basically, there’s a lot to research when you start a business.

First of all, how exactly does one define a regular Corporation?

A corporation is an independent legal and tax entity, that’s legally separate from the people who own, control and manage it. Because of this separation, the owners of a corporation don’t use their personal tax returns to pay tax on corporate profits—the corporation itself pays these taxes.

Owners pay personal income tax only on money they draw from the corporation in the form of salaries, bonuses, and the like.

The C-Corporation

A C-Corporation is the most general type of corporation you can have. The owners of a C-Corporation are mostly protected from personal liability for business debts, although, if the corporation doesn’t follow the formalities of a corporation, there can be problems with personal liability. As a result, the formalities such as filing annual reports, maintaining separate bank accounts, keeping track of meeting minutes, and holding shareholders meetings are very important.

A huge benefit of owning a C-Corporation is that the owners can share corporate profits with the corporation, lowering the overall tax rate. A C-Corporation can also have an unlimited number of shareholders. Plus, if you wish to take your company public (selling shares over a public trade), you will definitely need to be in a C-Corporation, so starting out as one saves you some time and trouble down the road.

The S-Corporation

An S-Corporation is a C-Corporation that has elected to be treated as an S-Corporation. It has the same personal liability protection and potential issues as a C-Corp, but it also comes along with some very precise formalities. An S-Corporation can only have a certain amount of shareholders and the shareholders must meet specific requirements. An S-Corporation also allows for corporate profit sharing, but the allocations must be done in accordance with the shares each owner owns. A benefit to this is that owners can use any losses of the corporation on their personal income tax returns, reducing personal tax liability in many instances.

In an S-Corporation, all business profits “pass through” to the owners, who report them on their personal tax returns. The S-Corporation itself does not pay any income tax.

Therefore, an S-Corporation elects not to be taxed as a corporation. After the corporation has been formed, it may elect “S-Corporation Status” by submitting IRS form 2553 to the Internal Revenue Service (in some cases a state filing is required as well).

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Deborah Sweeney – Legal Expert, CEO, MyCorporation.com – Calabasas, CA

Deborah Sweeney

http://www.mycorporation.com

File a foreign qualification

File an annual report

Organize documents on a cloud storage system

File an amendment

File for a dissolution

Review your profit and loss statements

Check your cash flow

Get a head start on tax season

Make payroll corrections

Celebrate accomplishments from this year and set goals for next year

Once you’ve filed the initial licenses, do you ever have to renew your licensing and permits?