Operations

Taxes are important to consider when starting a business. Business owners must know the types of taxes that may apply to their business and understand the requirements and processes for paying them. It is also important that owners account for these taxes in their operational and financial plans. In this post we will discuss several types of taxes, how they are calculated, and how to pay them, as well as advance planning considerations. Please note that this information is not intended to be tax advice or guidance, nor is it a comprehensive coverage of tax issues.

You have assessed the feasibility of your business idea and created a plan to get started. What comes next? How do you turn your idea into a legally recognized Illinois business? Here are the four things you should do first.

1. Choose an organization structure for your business.

There are several ways to organize businesses in Illinois, each with its own legal and tax implications. Your form of business determines which income tax return forms you must file. 

The most common forms of business are:

We all know that a barometer is an instrument used to measure atmospheric pressure. Another definition of a barometer is something that reflects changes in circumstances and opinions. A good business barometer could be an annual review of that business to determine current trends and can also be used to forecast the future, and thus, to revise a strategic business plan.

Many experts recommend saving 10% to 15% of pretax income annually for retirement. But while Americans accumulate the majority of their retirement funds through employer-sponsored defined-contribution plans, according to a report from the Pew Charitable Trusts, many small business owners and their employees are not afforded this option.

One of the most significant changes in the Tax Cuts and Jobs Act will be a 20% deduction for all pass-through businesses. (Businesses that pass income to the owner to pay the income taxes.) This means, as an example, if your revenue in 2018 was $500,000, you will pay taxes on only $400,000 of that revenue. In a 15% tax bracket, the savings will be about $4,500 on a gross basis and even on a net basis the savings will get your attention. It is anticipated that this will impact roughly 95% of the small businesses in the United States.

Don’t let the hustle and bustle of the holiday season cause you to forget about your business. Crossing these items off your to-do list before the end of the year will help you not only close out 2018 but also get off to a good start in 2019.

Accounting