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Five Tax Facts for Start-Ups

July 28, 2014

Five Tax Facts for Start-Ups

Zach Naal


  1. Determine Your Federal Tax Obligations:

When you start a business, you must decide what form of business entity to establish. The type of business form (sole proprietorship, partnership, LLC) determines which income tax return form you have to file. i.e: Income Tax Self-Employment Tax, Excise Taxes, Federal Taxes and more.

Like federal taxes, your state tax requirement depends on the legal structure of your business. For example, if your business is an LLC, the LLC is taxed separately from the owners of the business, while sole proprietors report their personal and business income taxes using the same form used to report their business taxes.

2.     Determine When the Tax Year Starts:

When starting a business you can choose the Calendar year or Fiscal year:

-Calendar year – A calendar tax year is 12 consecutive months beginning January 1 and ending December 31.

-Fiscal year – A fiscal tax year is 12 consecutive months ending on the last day of any month except December. A 52- to 53-week tax year is a fiscal tax year that varies from 52 to 53 weeks but does not have to end on the last day of a month

You adopt a tax year by filing your first income tax return using that tax year.

3.     Determine Your State Tax Obligations

Each state and locality has its own tax laws. Having knowledge of your state tax requirement can help you avoid problems and your business save money. The most common types of tax requirements for small business are income taxes and employment taxes.

4.     Obtain Your Federal Business Tax ID

An Employer Identification Number (EIN) is also known as a Federal Tax Identification Number, and is used to identify a business entity. Generally, businesses need an EIN. You may apply for an EIN in various ways, and now you may apply online.

You must check with your state to determine if you need a state number or charter.


  1. Determine tax deductions (keep your receipts) :

According to the AICPA a lot of small-business executives don’t bother to claim some easy deductions. Most common on that list: entertainment, travel, meals, home office and health insurance.

However “travel miles, meals and entertainment deductions require that you maintain a diary with daily entries that tie into receipts and other records,” the group says.

For more information about how CFO Rick can help you with your small business, contact us here or call 415.821.0895.

3 Ways to Help Pay Down Your Student Loan Debt

July 21, 2014

1) You can cut the interest rate on your federal student loans by 0.25 percentage points immediately with one simple step. Sign up to make your monthly loan payments via automatic debit, and your interest rate drops. It’s that easy.

2) You can extend your repayment period on your federal loans. Borrowers who have $30,000 or more in federal loans can choose the extended repayment plStudent-Debt1an, which lowers your monthly bill by lengthening the repayment period to as long as 25 years.

3) You can make smaller federal student-loan payments — and even have some of your debt forgiven — if you don’t earn much money. Income-based repayment plans, such as Pay As You Earn, are available for borrowers who have a lot of debt relative to income. The plans allow you to put 10% of your “discretionary” income (the amount by which your income exceeds 150% of the poverty line) toward your loans over 20 years, after which any remaining amount is forgiven.

By the editors of Kiplinger’s Personal Finance, July 21, 2014

How serious is the IRS? Very.

June 12, 2014

Image It is important for taxpayers to understand that the IRS is aggressive in assessing the trust fund penalty. Payroll taxes are the government’s money, and when the taxes are not paid, the government believes those who have not paid are taking its money. The government does not take this lightly and will not relent in its efforts to collect the amounts it is owed. For a business with numerous employees, unpaid trust fund taxes add up quickly, and the trust fund penalty consequently assessed against a responsible person can be huge. In addition, the penalty is not dis-chargeable in bankruptcy.

Affordable Care Act Tax Provisions

October 15, 2013

The open enrollment period to purchase health insurance coverage for 2014 through the Health Insurance Marketplace runs from Oct. 1, 2013, through March 31, 2014. If you are seeking information about how to obtain health care coverage or financial assistance to purchase health care coverage for you and your family, visit the Health and Human Services website,


March 8, 2011

Benjamin Franklin was right: Taxes remain one of life’s two certainties. But if you set about preparing your 2010 returns on your own, you’re likely to face a process fraught with uncertainty.

Gilt City members are invited to hand over their W-2s and 1099s to the experts at CFO Rick’s Financial District offices. They’ll prepare and file your 2010 return for you, guaranteeing you minimum anxiety—and maximum refund.

They’ll guide you step by step through your completed 2010 return, and even highlight hidden write-offs and missed opportunities from returns from prior years. They’ll deliver maximum deductions for 2010, and help you win back any overpayments from years prior.

In most cases, the process more than pays for itself. And CFO Rick’s thoughtful and patient projections of your financial future will give a leg up—to savvy couples, families, homeowners and small-business proprietors alike—for many tax seasons to come.

What is Your Accounting and Bookkeeping Strategy for the Rest of 2010?

April 14, 2010

We are now into the second quarter of 2010, tax season is winding down, and most companies have or will review first quarter results.  I will assume that foremost on the review will be sales trends and expenses, along with profitability.  Results will be compared to goals.  Strategies will be adjusted for the year based on the results.

For some businesses, there may be cuts in certain expenses to lower costs.  For others it will be a drive to get more revenue, or a combination of both.   For some it may be the best strategy to remain with the current plan.

One area often missed and often considered a “sacred cow” is the accounting arm of the company.  It’s a major cost center and a good business strategy should include serious thinking about what pieces of it should be kept internally or outsourced.  There is definitely a cost in outsourcing but there is also an efficiency gained when it is outsourced to the right firm.

There are some companies, like CFO Rick Inc., that have full accounting and bookkeeping services available, like consulting, budgeting, payroll and human resource support.  The company also processes tax returns.  Companies like this one are making roads in markets like San Francisco because of the need of businesses to lower costs and increase efficiencies. Reducing overhead in a cost center like an accounting department without losing quality of service has proven to be a great solution for small and big businesses.  On average immediate saving are around 25%.  However, over time more and more savings are realized as the outsourcing partnership is leveraged for further services.

It’s good business to look at your accounting and bookkeeping strategy for the rest of the year as a way to plan for your business success.

A few shoppers splurge before sales tax goes up

March 30, 2010

California’s budget crunch

March 31, 2009|By Victoria Colliver, Chronicle Staff Writer
Better move fast if you want to beat Wednesday’s state sales tax increase.

Eric Edenfield of San Francisco did just that when he purchased a water heater last weekend for the duplex he rents out in Guerneville. The new water-saving “on demand” heater might be good for the environment, but at $3,000, it’s tough on the wallet.

“I bit the bullet and I ordered it,” said Edenfield, 45, who was considering buying a second water heater for his other unit before Wednesday. “I didn’t need it until the end of the year, but I thought, why not save (some money) now?”

A temporary, statewide, 1 percent sales tax increase goes into effect on Wednesday. It is designed to add revenue to California’s coffers, but could worsen what is already a tough time for consumers and retailers in a recessionary economy.

The new sales tax is set to expire July 1, 2011, or July 1, 2012, depending on whether voters approve a constitutional amendment, Proposition 1A or the Budget Stabilization Act, in a statewide election to be held May 19.

The increase means that the sales tax in California will range from 8.25 percent in some areas – among them Humboldt, Monterey and Shasta counties – to as high as 10.25 percent in Pico Rivera and South Gate, both in Los Angeles County. That’s because voters in some cities and counties approved local sales tax increases that also go into effect Wednesday.

In the Bay Area, voters in Sonoma and Marin counties approved an increased tax to fund rail transit, bumping the rate to 9 percent there. In Santa Rosa – where Edenfield bought his water heater – the rate will be 9.25 percent due to the city’s current district tax.

Effective Wednesday, the sales tax in San Francisco will be 9.5 percent. The tax will be 9.75 percent in Alameda County, 9.25 percent in San Mateo County and 9.25 percent in Contra Costa County, with the exception of Richmond, Pinole and El Cerrito, where it will be 9.75 percent.

Some consumers said they increasingly are turning to the Internet, where often they can skirt state taxes if retailers fail to add those charges to the total sales costs.

Byron Gordon of San Francisco said he’s cutting back on nonessential purchases and buying online when he calculates that shipping costs are lower than taxes.

“In principle, the sales tax is a great thing because it pays for health care, education and all those services we need, but people are finding ways to cut back on spending,” said Gordon, 41, an account executive with an Internet public relations firm. “If they can find a way to not pay, they will.”

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