Category Archives: Entrepreneurship

FIVE BASIC TAX TIPS FOR NEW BUSINESSES

business-owner-stockxpertcom_id17260461_jpg_9d244c0f32209ba041e058fccd912e101If you start a business, one key to success is to know about your Federal tax obligations. You may need to know not only about income taxes but also about payroll taxes. Here are five basic tax tips that can help get your business off to a good start.

1. Business Structure.  As you start out, you’ll need to choose the structure of your business. Some common types include sole proprietorship, partnership and corporation. You may also choose to be an S corporation or Limited Liability Company (LLC). You’ll report your business activity using the IRS forms which are right for your business type.

2. Business Taxes.  There are four general types of business taxes. They are income tax, self-employment tax, employment tax and excise tax. The type of taxes your business pays usually depends on which type of business you choose to set up. You may need to pay your taxes by making estimated tax payments.

3. Employer Identification Number.  You may need to get an EIN for federal tax purposes. Search “do you need an EIN” on IRS.gov to find out if you need this number. If you do need one, you can apply for it online.

4. Accounting Method.  An accounting method is a set of rules that determine when to report income and expenses. Your business must use a consistent method. The two that are most common are the cash method and the accrual method. Under the cash method, you normally report income in the year that you receive it and deduct expenses in the year that you pay them. Under the accrual method, you generally report income in the year that you earn it and deduct expenses in the year that you incur them. This is true even if you receive the income or pay the expenses in a future year.

5. Employee Health Care.  The Small Business Health Care Tax Credit helps small businesses and tax-exempt organizations pay for health care coverage they offer their employees. A small employer is eligible for the credit if it has fewer than 25 employees who work full-time, or a combination of full-time and part-time. Beginning in 2014, the maximum credit is 50 percent of premiums paid for small business employers and 35 percent of premiums paid for small tax-exempt employers, such as charities.

For 2015 and after, employers employing at least a certain number of employees (generally 50 full-time employees or a combination of full-time and part-time employees that is equivalent to 50 full-time employees) will be subject to the Employer Shared Responsibility provision.

If you would like to start a new business or have questions about starting up a new business, please call our office today. We specialize in helping people just like you who want to enjoy the freedom and flexibility of owning their own businesses.

Source: IRS Summertime Tax Tip 2014-09

TEN PERSONALITY TRAITS THAT EVERY SUCCESSFUL ENTREPRENEUR HAS

Whether I’m out on the speaking circuit, working with startups, back in Ann Arbor teaching MBAs, or just socializing in a coffee shop, I’d say there’s one question I’m hit with more than any other.

It comes in different forms, but the essence of the question is the same: “What does it take to be a successful entrepreneur?”

Over the years, my answer has evolved. But I’ve found myself settling on ten traits that are shared in common by virtually every truly successful entrepreneur I’ve met, observed or studied. The true rock stars are all:

1. Passionate

You need to be driven by a clear sense of purpose and passion. Typically, that passion comes from one of two sources: the topic of the business, or the game of business-building itself.

Why do you need passion? Simply because you’re likely to be working too hard, for too long, for too little pay with no guarantee that it’ll work out… so you need to be motivated by something intrinsic and not money-related.

2. Resilient

If you’re going to build a startup, you’ll need a spirit of determination coupled with a high pain tolerance. You’ll need to be willing and able to learn from your mistakes – to get knocked down repeatedly, get up, dust yourself off, and move forward with renewed motivation.

People will constantly tell you your baby’s ugly, that your business won’t work. Now, you should listen carefully and be open to constructive criticism. But after a while, having the door slammed in your face repeatedly can be withering, and the best entrepreneurs learn to feed off the negativity and actually gain strength from it.

3. Self-Possessed

You need a strong sense of self. You can’t be threatened by being surrounded by talented, driven people. To truly succeed, you’ll need the self-confidence to surround yourself with people “who don’t look like you”… that is, people with skills, background and domain knowledge that complement your own. And check your ego at the door: you shouldn’t be too proud to make coffee for the team, empty the waste baskets, or do the bank runs.

4. Decisive

You’ll need to develop a comfort-level with uncertainly and ambiguity. Entrepreneurs gather as much information as they can in a short period of time, and then MOVE, MOVE, MOVE!! The attitude is that it’s not going to be perfect… We only have 9% or so of the data from which to base our decision… but if we wait to have all the information, we’ll never get moving… and be mired in indecision. (Big organizations are really good at this – the mired thing – saying, We don’t have enough information, so let’s continue to study… form a committee or a task force)

5. Fearless

On the sliding scale from “risk-averse” to “risk-seeking,” it shouldn’t surprise anyone that entrepreneurs tend to be closer to the latter. But you don’t need to be a nut-case, the sort who bungee-jumps without a helmet. Smart entrepreneurs develop an intuitive ability to sniff out and mitigate startup business risk. But you know you’re going to fall down, and feel comfortable with that fact and that you’re going to learn from your failures and adjust as you go.

6. Financially Prepared

You’ll need the right personal financial profile to make the leap. This doesn’t mean that only the rich can be entrepreneurs. But unless and until you’ve got the personal financial ‘runway’ (ability to go without a steady paycheck and subsidized benefits) of at least 18 to 24 months (ideally longer), you might hold off on quitting your day job.

Consider launching the startup as a side-business if that’s possible, while continuing to work the 8-to-5 shift to cover the bills. Or approach your boss about going part-time. Then, once your business generating cash flow, you can dial back on your hours, or submit your resignation and go full-time with your startup.

7. Flexible

I challenge you to find an entrepreneur running a startup four or more years old where that business doesn’t differ dramatically from the vision sketched out in their original business plan. The point is that the folks who stay on their feet are the ones who stay flexible and adjust to new information and changing circumstances.

8. Zoom Lens-Equipped

Can you ‘pan out’ to see a compelling big vision for your business, then ‘zoom in’ and focus on near-term startup goals? Successful entrepreneurs can facilely move back and forth between these two views. They’re able to articulate the big picture, while simultaneously managing and executing to the ‘zoom-in’ picture.

9. Able to Sell

Whether you’re a born extrovert or introvert, as a founder/CEO, you’ll find yourself always selling. You’ll be selling your vision to prospective partners and funding sources. You’ll be selling prospective recruits on why they should quit their day jobs and join this startup they’ve never heard of. You’ll be selling your products and services (yes, you’ll probably be personally closing at least the first few sales). You’ll be selling your employees on why they should remain calm and stay with the ship when the seas inevitably get rough.

10. Balanced

You may not start out with a fool-proof gyroscope, but to survive as an entrepreneur, you’ll need that strong sense of perspective. How to maintain simple, clear focus. How to be at peace with, and learn from, a failure. Understanding that not all battles are worth winning, and when to walk away. Knowing that most in your startup aren’t as entrepreneurial as you – that this may be a very cool job for them, but it’s still a job. Knowing when to go home and give your loved ones a hug. When to go for a run.

Read more: http://www.businessinsider.com/traits-of-successful-entrepreneurs-2013-2#ixzz31YB56K6V

If you are curious about whether you have these personality traits for entrepreneurship, please visit us at http://www.LStortzCPA.com