other taxing matters

OTHER TAXING MATTERS

With

Jack Cohen, CPAIncSmart.biz Inc

After Selecting an EntityWhat am I about to Receive? Income Tax Reporting Forms Payroll Tax Reporting Forms State Tax Reporting Forms Sales and Use Tax Forms Personal Property Tax Forms Others

Payroll Reporting 940 FUTA 941 Federal Withholding and

Social Security State Withholding State Unemployment State Disability Others

Tax Tip Use Payroll company

State and Local Taxes Sales tax Use tax Personal property tax Business license or permit

Where People Get In TroubleTrying to Avoid Sales Tax

Who is responsible for collecting the tax? What if I purchase merchandise out of

state? What is a resellers certificate?

NexusWhat is it and how is it determined?

United States Supreme Court has held that states can only impose tax or collection responsibility when:There is a substantial physical presence between the state and:the sellerthe transactionthe activity

The state may require out-of-state vendors to provideInformation.

NexusContinued

Substantial physical presence includes:

• Owning or leasing real estate or tangible personal property

• Maintaining a business location or inventory• Having resident or nonresident employees

work within the state• Incorporating or qualifying to do business• Using the company’s own trucks and

personnel to make deliveries into the state on a regular basis

NexusContinued

Employee VisitsPhillip Crosby Associates, Inc. (Alabama-1996) Management Consulting Business

Telemarketing sales; in-person visits 26/yearDid 69 projects and training over three yearsNexus upheld-considered regular and repeated

B.L. Key, Inc. (Utah-1997)MFG sent 3 supervisors to Utah on 8 trips lasting a week to a monthSupervisors hired 4 employees each tripArgued presence was not regular but sporadicNexus upheld-ruled regular means repeated

NexusContinued

Representative’s Nexus Out of State Mail orders

Independent Sales RepSome 800 phone numbersTelemarketers ruled as independent sales reps

Printer’s NexusApplies to out-of-state companies establishing Nexus

By storing paper at the printer’s locationBy visitations to the instate printer

Instate deliveries - How many? Drop Shipments

New Business Expenses Start-up expenses

Organizational expenses

Web site expenses

Start Up Expenses Money advanced to corporation = loan Deductible upon start of business Start – When apartment is available When open for business When searching for business Capital Expense Until Start

Business Travel Client calls

Market research

Plan your vacation around business

Tax Tip Maintain Good Records Receipts with business reason. Diary – Kept Contemporaneously. Primary reason for trip. Ordinary & Necessary Expense

Annual Board Meeting

Fully deductible

Find a creative location

Successful people travel

The Big Deduction Sec. 179

This year:$125,000 up to purchase of

$500,000

Family Members as Tax Deductions

Children: lower tax deductions Spouse on payroll Employee benefits Retirement planning

Employee Education Expenses

Seminars Conferences College tuition

Employee Benefits

Medical Child Care Life

Insurance

Dental Long Term

Care Chiropractic

Business Retirement Plans

Pension, Sep 401K

Profit Sharing

Defined Benefit Plans

Retirement $ The

Ultimate Safe

Final Thoughts It’s Your $

Plan, Plan, Plan …

Take Action

Alternative Minimum Tax Background Tax Preference Items Sch. ‘A’ Taxes Accelerated Depreciation Capital Gains To Avoid – Keep deductions on page 1 of

return.

Pension Contribution Changes Defined Benefit Plan Max. Compensation Used = $225,000 Smaller of 100% of compensation or $45,000 401K $15,500 & $5,000 catch up SEP – Lesser of 25% Income or $45,000 Traditional IRA – Lesser of Compensation or $5,000

Thank YouFor more information, visit

IncSmart.biz Inc