As a previously published post, we wanted to reissue this informative and favored piece on sunk costs!
In the first year of a startup business, you, as a business owner, will need to make certain elections for tax purposes. These start up tax choices (elections) establish precedents for tax years to come. An important election you will make is selecting an accounting method for your business. The two methods commonly used are cash basis accounting or accrual basis accounting. You may be reading this and thinking, “What do cash and accrual basis mean?” and “What difference does this make to me and my business?”
Making the wrong decisions could cause your business to become just another failure.
Simply put, as our whitepaper explains, under cash basis accounting, a business owner such as yourself recognizes revenue and expenses (and pay taxes) when you receive or pay cash. Under accrual basis, you recognize income and expenses (and pay taxes) when they are earned without regard to being paid. In the attached whitepaper, we provide media company tax tips and advice.
Many accountants automatically suggest that all of their small business clients automatically adopt cash basis accounting. As we discuss on the whitepaper that follows, this should not automatically be the case for many media and entertainment companies. The remainder of this paper explains cash basis versus accrual basis accounting and how they impact your business.
Selling your business can be an emotional and life-changing event. On the “big day” of sale, hopefully, you may realize a once in a lifetime payoff. It could be that you have spent years building the business. Alternatively, your business could be a relatively new growing interactive business that you are cashing out.
We have put together some useful information on Selling Your Business. Our guide contains the following:
- Who to speak with to get an idea on the value of your business
- What kind of attorney is best for helping you sell your business
- How to think going into the selling market
- How to be flexible
- How to spruce up your business
- How to think ahead to the future
A common belief of identity theft is that it occurs mostly to individuals, for example when social security numbers and other personal information are obtained. Businesses are also subject to identity impersonation. The remainder of this article discusses business e-mail scams, and the best practices for minimizing their likelihood as suggested by the Federal Bureau of Investigation (“FBI”).Read More
Preventing Employee Fraud: A Brief Guide for Reducing the RiskAs an entrepreneur, you work hard for your money. There is almost nothing worse than experiencing pilferage, embezzlement, and other types of misappropriation. Internal controls are extremely important to the entrepreneurial company.
We have put together a guide that contains 10 steps to help you protect the earnings and assets of your company such as:Read More
Please check out our guide below and give us a call if you have any questions about Preventing Employee Fraud.
- Using Cash Wisely
- Managing Cash Outflows
- Practicing Cost Control
- Analyzing and Planning
- Monitoring Inventory
It's getting hot outside, and you probably don't want to think about tax planning. But we have put together some summer tax tips so that you can get the most out of your 2015 return.
Before you head off to the beach, please take a look below at what we have prepared.Read More
The breakeven point in your business is where all direct and indirect costs have been met. You are neither making nor losing any money. The breakeven point can be measured in number of units sold, dollars of total sales, or possibly hours billed out.
Whether you do your own tax return or use the services of a CPA firm, MediaCPAs.com Guide: “104 Tax Deductions” will help you: Have you taken all of the allowable tax write offs? Are you a media freelancer, internet consultant, independent media consultant, entertainer, (for example, a 1099 staffer who operates as a sole practioner or LLC)? If so, you are a media entrepreneur and you are treated for tax purposes as a business.
We want to help you avoid losing legitimate tax deductions and make sure that you pay the lowest possible income taxes. We have put together the attached whitepaper: “104 Tax Deductions: A guide for for the Media Freelancer, Entertainers and Independent Contractor.”tax purposes as being a business. Most of the costs of your business are tax deductible.
Our free guide will help you to:Read More
- Bonus depreciation. You can expense 50% of the cost of new property you acquired and placed in service during 2014.
- Section 179. The immediate expensing limit for new and used property purchased and placed in service during 2014 is $500,000. This is a substantial increase from the $25,000 deduction under the prior tax law. Your total Section 179 deduction is limited when you purchase $2 million or more of assets during the year.
- Qualified improvements. You can use a 15-year straight-line depreciation method for improvements to leased buildings, restaurant property, and the interior of retail establishments.
- Commercial building energy-efficient improvements. If you made improvements to your commercial building that helped reduce utility costs, you can claim a deduction of up to $1.80 per square foot.
- Residential energy-efficient improvements. Did you buy qualifying storm windows or doors for your home during 2014? The credit of 10% of the cost of improvements is back, up to a lifetime limit of $500.
- Charitable contributions from IRAs. When you’re age 70-1/2 or older, you could make a 2014 tax-free distribution to a charity from your IRA.
- State and local sales tax deduction. If you itemize, you can claim a 2014 deduction for these taxes instead of deducting state and local income taxes.
- Qualified tuition expenses. The law reinstated the above-the-line deduction of up to $4,000 for expenses you paid in 2014 for higher education for yourself or other family members.
- Teacher classroom expenses. If you’re a teacher and you paid out-of-pocket for books and certain other materials for use in your classroom, you can claim an above-the-line deduction of up to $250 for 2014.
The end of another year is quickly approaching, and it’s once again time to take the proper steps to reduce taxes on your personal and business returns. Tax planning strategies for 2014 includes accelerating deductions and deferring income.