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After deciding what type of products or services you are going to offer, the most important decision you will make in start a new business is the type of business structure to form. You will be faced with deciding whether to form a General Partnership, S-Corporation, C-Corporation, Venture Capital or Limited Liability Company. If you are starting a small or home business a Limited Liability Company or LLC is your best choice hands down.

A Limited Liability Company (LLC) provides you best of all Worlds, in that it is a type of business ownership combining several features of corporation and partnership structures. Unlike a general partnership, owners of an Limited Liability (LLC) have limited liability. Which mean an owner of LLC can not lose more than the amount he or she has invested in the company. Thus, the owner is not personally responsible for the debts and obligations of the company in the event they are not fulfilled. And, unlike a limited partnership, owners of a Limited Liability Company (LLC) do not lose their limited liability by actively participating in management of the business.

A Limited Liability Company (LLC) also have many advantages over the most popular business structure, the Corporation. The Limited Liability Company (LLC) and the S Corporation both have the benefit of pass-through taxation. This means that owners in the company report their share of profits and losses on each owner’s individual tax return. The IRS assesses no separate tax on the company itself. However, in the C Corporation “double taxation” occurs when the C corporation first pays taxes on its own earnings and then the shareholders or owners pay income taxes on the dividends they receive. Even though the tax status of a Limited Liability Company and a S Corp are almost identical, the Limited Liability( LLC) can offer small and home business owners many advantages over a Corporation.

A Limited Liability Company (LLC) is much easier to form. Requirements for forming a corporation and filing the necessary documents with the IRS to have it be taxed as an S corporation is a complex and time-consuming process. With a LLC you simply file a Certificate of Formation or Articles of Organization with proper state agency, in most states it is the Secretary of States. Unless you choice to do otherwise, single-member Limited Liability Companies are automatically taxed as sole proprietors by the IRS. Limited Liability with multiple owners are automatically taxed as partnerships. Which is much different from the Corporation which must file IRS Form 2553, “Election by a Small Business Corporation,” within 75 days of the corporation’s formation to obtain pass-through status a! s an S corporation.

Other attractive benefits of Limited Liabilities Companies (LLC). In contrasted to Corporations, LLCs are not required to hold annual meetings or keep formal meeting minutes. Owners of a Limited Liability Companies do not have to issue stocks to the owners. There is no limit to the number of members who may have an ownership interest in the company.

There are some draw backs to an LLC but as it relates to small or home business owner they are so insignificant they are no worth mentioning. It clear that an Limited Liability Company is a small business owner?s dream. It provide the protection of corporation, while maintaining the simplicity of a partnership. With LLC you will have more time to focus on the important details of your business and not spending precious time pushing useless paper. For more information on LLCs or other business issues visit www.wizatbiz.com

I would like to prepare taxes from home when the tax season comes. What do most people that prepare taxes charge for the differennt type of forms. What software do they use and is there any out there that resemble the software that H&R bkock uses? What type of legal things must i take care of before i can start this little side job? I have recently finished taking the basic tax preperation course with H&R Block.

• Maximize tax deductions — categorize expenses as business or personal
• Identify potential deductions and track deductible expenses like mileage and office supplies
• Never miss a bill— stay on top of bills due and paid
• Monitor profit and loss and overall business performance in the Business Center
• Bring your personal and business accounts— credit cards, brokerages, online banks— together (online services require internet access and are subject to change)

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Taxes are your single biggest expense against your income. Knowing what deductions you’re entitled to can save you hundreds, if not thousands of dollars. This article will cover vehicle related deductions that often get overlooked by home-based businesses. Our focus will be for individuals with no employees, however many of the deductions will apply to small business and large corporations as well.
There are two ways to calculate Vehicle deductions:
1. Standard mileage for 2006 is $0.445/mile
2. Actual cost method + depreciation
Lets start with the “standard mileage rate”. You can write off each mile you drive that is related to your business at $0.445/mile. This is called the “standard mileage rate”. So if you drive 10 miles to visit a client, then 10 miles to return to your home office, you can deduct 20 miles. 20x.445=$8.90. However, you cannot deduct all your miles, such as going to the grocery store. You can see how this can add up to a substantial amount. Some professions such as real estate require a lot of driving.
In addition to your standard mileage rate, you can also deduct parking fees and tolls in connection with your business travel. If you have a loan on the car, then you can deduct the interest paid on the loan to the extent that you use the car as a business expense. So if you use your car 50% for business and 50% for personal use, then half the interest paid on the loan is deductible! Remember, this is for self-employed only. You cannot deduct interest on a loan if you are an employee using the car for your job.
The standard mileage rate is by far the simplest, but may not offer you the largest deduction. Instead, you can choose the “Actual Cost Method”. In this method, you deduct all the expenses related to owning and maintaining your car. This would include and is not limited to oil changes, repairs, tires, brakes, tune-ups, washing and waxing, auto-club memberships, license plates, and car insurance. Again, all of these expenses are deductible for the portion that you use the car for business. For example, if you drive 20,000 miles during the year, and 15,000 miles are for business, and the remaining miles are for personal use, then you can deduct 15,000/20,000 or 75% of all those expenses.
In addition to the actual cost method, you can deduct a depreciation value. This is a value that reflects the loss of value to the car over time due to wear and tear. The simplest example of this would be if you bought a new car in 2006 for $20,000, you can deduct 20% of the value the first year times the percentage of business use. So if you use the car 75% for business, you calculate your deduction as follows: $20,000×75%x20%=$3000.
For the following years, you use the following schedule:
First year: 20%. (Half a year)
Second year: 32%
Third Year: 19.2%
Fourth Year: 11.52%
Fifth Year: 11.52%
Sixth Year: 5.76% (half a year)
What if you trade an old car you were using for business for a new car? You would have to recalculate a “basis” cost for depreciation. You also have a different depreciation schedule if you use the car less than 50% for business or if you buy a hybrid electric car.
We have by no means covered all the twists and turns that would affect how you calculate your deductions. Fortunately a popular tax software like TurboTax or Taxcut will walk you through each step in calculating your deduction then give you which method yields you the biggest deduction. If you’re going to use a tax accounting service, make sure you go over these kinds of deductions with the tax professional. Bring this article with you and ask them if the have experience with how to prepare returns small businesses and all the deductions that are available to you. If they hesitate or stutter, go somewhere else. If could cost you thousands.

Packed With Suggestions Ranging From Tax Tips To Wholesaling, The Home Craft Business Will Guide You Through The Confusion Of Expanding A Craft Hobby Into A Business With The Potential For Some Serious Income.

The Home Craft Business: How To Make It Survive And Thrive.