SMCC seminar on starting and growing small businesses on January 25th, check it out:
http://www.smccme.edu/static-content/events/small-business-seminar.html#agenda
Friday, January 4, 2013
1099's
Subconsultants certainly require 1099's; but did you also know you're required to send them to your Landlord and your Lawyer as well? Rents actually get reported in box 1 and attorneys are due a 1099 misc for any funds $600 or more.
As many of us are aware 1099 miscellaneous forms are typically given to subconsultants that are not incorporated. For example if you higher a Graphic Designer and pay them $600 or more during a fiscal year you'll need to send them a 1099 misc by January 31st. Other sub consultants could include landscapers, contractors, business consultants, commissions, basically anyone who provides a service (not a product) that is not incorporated.
1099 Instructions:
http://www.irs.gov/pub/irs-pdf/i1099msc.pdf
As many of us are aware 1099 miscellaneous forms are typically given to subconsultants that are not incorporated. For example if you higher a Graphic Designer and pay them $600 or more during a fiscal year you'll need to send them a 1099 misc by January 31st. Other sub consultants could include landscapers, contractors, business consultants, commissions, basically anyone who provides a service (not a product) that is not incorporated.
1099 Instructions:
http://www.irs.gov/pub/irs-pdf/i1099msc.pdf
Monday, November 19, 2012
Monday, October 29, 2012
Do I need to Formalize my Business?
No, but sometimes....
Small Businesses can operate under their primary owners Social Security number.
What if you don't want to take a check in your name but rather your businesses name. Well then just register your business as a DBA (Doing Business As) with your local town for an incidental fee and open a checking account in that name. You are now operating as a DBA under your personal security number.
Doesn't work for partnerships though they must register as an LLC - Limited Liability Company. Those partners then receive a partnership K-1 tax statement to be filed on their personal taxes. Another reason to limit your liability is so that you don't go bankrupt personally in case of lawsuit which is certainly advisable if your in the construction industry or anything prone to lawsuits.
Small Businesses can operate under their primary owners Social Security number.
What if you don't want to take a check in your name but rather your businesses name. Well then just register your business as a DBA (Doing Business As) with your local town for an incidental fee and open a checking account in that name. You are now operating as a DBA under your personal security number.
Doesn't work for partnerships though they must register as an LLC - Limited Liability Company. Those partners then receive a partnership K-1 tax statement to be filed on their personal taxes. Another reason to limit your liability is so that you don't go bankrupt personally in case of lawsuit which is certainly advisable if your in the construction industry or anything prone to lawsuits.
How Much Should my Owners Draw Be?
An excellent question asked by all new business owners. The answer lies in understanding overhead. Overhead is defined as all administrative, marketing, vehicle, office space, utilities - the basics that it takes to run a business. This category should never contain a cost of goods sold, for instance something directly related to creating sales such as inventory or payroll.
To determine an appropriate draw, look at a span of time 6 months or more on the Profit and Loss - the longer the period the increased accuracy. This is because insurance premiums and property taxes are paid just once or twice a year. Determine the monthly average for Overhead. Now take a look at average sales and factor in what you really expect to happen. Cost of Goods Sold can be shown as a percentage of Sales so once you remove that and Expenses/Overhead you can realize net profit.
Sales - Cost of Goods Sold (Direct Costs) - Overhead = Profit.
Often 10-20% is retained for capital investments but it depends on the status of your business and your goals. Congratulations you've now deducted an appropriate Draw.
To determine an appropriate draw, look at a span of time 6 months or more on the Profit and Loss - the longer the period the increased accuracy. This is because insurance premiums and property taxes are paid just once or twice a year. Determine the monthly average for Overhead. Now take a look at average sales and factor in what you really expect to happen. Cost of Goods Sold can be shown as a percentage of Sales so once you remove that and Expenses/Overhead you can realize net profit.
Sales - Cost of Goods Sold (Direct Costs) - Overhead = Profit.
Often 10-20% is retained for capital investments but it depends on the status of your business and your goals. Congratulations you've now deducted an appropriate Draw.
Saturday, June 16, 2012
Financial Services Include:
Accounts PayableAccounts Receivable/Collections
Cash Flow Projections
Project Budget Maintenance
Project or Department based accounting
GL resorting of Departmental expenses
Identifying Indirect Labor costs
Overhead ratios
Price Setting
Return on Investment Analysis
Trend Flow Graphs
Sales Tax/Tax Preparation
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