When There’s One Owner

If there is one owner, the business owner will include the income or losses on their personal tax return. An LLC is a pass-through business according to the IRS, so the LLC does not need to file its own tax return. The business owner will simply include the earnings or losses with their personal taxes and make any payments that may be needed to the IRS.

When There are Two or More Owners

When there are two or more owners, an LLC is still considered a pass-through business, but it works a little differently. Each owner will claim their percentage of the earnings or losses on their personal taxes, as well as their percentage of any deductions or credits. If there are two owners, for instance, each business owner will claim half of the earnings or losses for the year. They’ll also each be able to claim half of the deductions or credits.

When There are Employees

If the business has employees, it will need to collect and pay the payroll taxes, which include unemployment, social security, and Medicare. The employee’s share of these taxes should be withheld from checks throughout the year, along with income taxes and filed using special forms at the end of the year. The business owner will pay their share as well as the employee’s share throughout the year, so there shouldn’t be a large amount due at the end of the year.

Other Options

Instead of filing taxes as an LLC, business owners can opt to file as a c-corporation or s-corporation. Certain forms will need to be filled out so the taxes are applied appropriately, but this does not change the business type. It only changes how the business is taxed.

LLC taxes can get complicated, so it’s a good idea to have an accountant run through the options as well as their pros and cons before the end of the first year. This way, you know how to file your taxes and include the LLC taxes, no matter how you decide to file.

The post How are LLCs Taxed? appeared first on QuickStart Docs.

Confidence

Confidence means you know what your skills are and how you can use them to make your business successful. It does, however, mean knowing your limitations and making sure you know when you can do it on your own and when you’ll need help. It is important to be confident without being over-confident to the point you don’t ask for help even if you need it.

Budget-Minded

You will need to stick with a budget and make sure you aren’t spending too much, reducing the amount of capital you have on hand for expenses, or growing the business. While there is help available if you end up needing extra funds, being conscious of the budget at all times can help you reduce expenses and make the business more successful financially.

Goal-Oriented

As a goal-oriented person, you do more than just create a goal and try to reach your way to it. You understand that you need to research and plan the best way to reach the big goals, break those goals into smaller goals you can reach, and explain the goals to employees, so they know what’s expected of them to help you reach the goals for the business.

Passionate

It doesn’t matter what kind of business you’re starting; it’s crucial you’re passionate about it. You may be passionate about the services you offer, the products you sell, or just making sure the business is successful. Without passion, it’s likely you’ll burn out after a while and may not be able to reach the goals you have in mind.

Focused

You’ll have a lot to do to keep the business running, so you need to be focused. Being focused helps you know what you need to do next and answer any questions so that you’re always working toward the goals you’ve set for the business.

If you have these five traits, you’re on your way to being a successful small business owner. Take the time to learn more about them and how they impact your decisions and your business to see why they’re so important as you start a new company.

The post 5 Traits of Successful Business Owners appeared first on QuickStart Docs.

Home Office Expenses

If the business is run from your home, it’s possible to deduct home office expenses. It is necessary to have a room dedicated to the office, not just a kitchen table and laptop, to use these deductions. With a home office, you may be able to deduct part of your homeowner’s insurance, utilities, property taxes, repairs, and maintenance.

Health Insurance

Some business owners will be able to use a health insurance deduction for the personal return. This covers all the insurance paid for the family, so it can add up to a significant tax break. This one is often forgotten about by business owners, but it’s definitely one worth checking into if you pay for health insurance on your own.

Education

As you’re learning more about how to run a business or attending trade shows, conferences, workshops, and more, any expenses need to be tracked as you may be able to use them for another tax break. Many of these are fully deductible, so if you spend a lot of time and money on education to help your business grow, you could save quite a bit on your taxes.

Travel Expenses

Traveling expenses for taxes have changed recently, so there may be some expenses you can no longer claim. However, if you spend money on travel and entertainment to help your business grow, you may be able to deduct some or all of those expenses on your taxes. If you spend quite a bit of time traveling, this could add up quickly and lead to a large tax break.

Taxes for small businesses, especially during the first year, can end up being a lot more than expected. However, before filing your taxes, check out these tax breaks to see if any of them might apply to you. This could help reduce the amount of money you’ll need to pay the IRS or, depending on your income and expenses, help you get a return back at the end of the fiscal year.

The post Small Business Tax Breaks You Need to Know About appeared first on QuickStart Docs.