Small business can be defined in so many ways so how do we define it for our small business tax services?
Ken-Mar Tax specializes in tax preparation, tax strategy and tax consulting for the self-employed and small business, but what is a small business when we're talking about taxes? At Ken-Mar Tax we consider small business owners anyone that gets a 1099, like a Realtor or truck driver. Anyone in the gig economy, like a gig worker, Uber Driver, Airbnb landlord, online retailer and anyone selling crafts, clothes, baseball cards, or even household items online. Also a solopreneur is a small business owner - like many attorneys, consultants, business coaches and contractors, as well as someone that owns a business with less than 10 employees and/or less than $1Million in revenue. So whether you run a dental practice with 8 employees and two locations, or you're a handyman picking up odd jobs around town - we provide the small business tax services to reduce your tax obligation and keep your books organized.
Small business owners of all types need a tax expert, like our Enrolled Agent, Ken Weinberg, who can consult on various tax reduction strategies while ensuring nothing raises red flags in the small business tax preparation. Small business tax services of Ken-Mar Tax include:
Ken-Mar Tax specializes in small business tax preparation. As an enrolled agent, we have the best understanding of tax reduction strategies that stay clearly within the IRS guidelines.
Whether you're a small business or an employee, at Ken-Mar Tax we understand when taxes don't get paid. But why pay a high-priced tax attorney or a tax resolution firm when our Enrolled Agent can represent you to the IRS, resolving back taxes, penalties and more?
Specializing in tax reduction strategies for small business and the self-employed: small business owners, Realtors, 1099 contractors, gig workers and other independent contractors trust Ken-Mar to minimize tax obligations.
What's the best way to structure your small business for tax advantages - LLC, S Corporation, C Corporation, Partnership, or Sole Proprietor? Ken-Mar Tax can review tax advantages and disadvantages of each option and let you decide on the best choice.
Small businesses benefit from working with a business tax advisor who understands the intricacies of each situation to find the best use of the complex IRS tax codes - maximizing deductions and reducing financial burden.
Bookkeeping services that records your small business transactions like purchases, sales, payments and receipts and for less than 10 employees we process payroll transactions so your small business doesn't need to hire an employee for balancing the books and cutting payroll checks.
Small Business Tax Terminology
Small Business Association(SBA) defines small business as 500 employees or less.
The Affordable Care Act (Obama Care) defines small business as under 50 employees.
The IRS defines small business on their "Small Business and Self-Employed Tax Center" page of the IRS website as those who "file Form 1040 or 1040-SR, Schedules C, E, F or Form 2106, as well as small businesses with assets under $10 million."
When Ken-Mar Tax refers to our Small Business Tax Consultant services, the IRS definition is the most appropriate - those filing Form 1040 and can benefit from tax reduction strategies, guidance with how to best structure the small business, small business payroll and tax preparation services.
Entrepreneur: An individual who creates and operates a new business venture, taking on the financial risk to do so with the expectation of making a profit. Andrew Carnegie, Henry Ford, Oprah Winfrey, Bill Gates, and Larry Page are among the most celebrated American entrepreneurs in history.
Solopreneur: A business owner who operates and manages their business single-handedly. They are solely responsible for all the profits and liabilities of the business. Famous examples include Marie Forleo, business coach, Sara Blakely, founder of Spanx and Pierre Omidyar, the creator of eBay. These solopreneurs singlehandedly took their company from zero to millions and billions of dollars in worth.
Solopreneurs typically benefit a great deal from working with an enrolled agent and small business tax consultancy firm, like Ken-Mar Tax, that specializes in tax reduction strategies for the small business owner.
A new business is a business that has been recently established and there is no specific IRS designation or advantage to having a "new" business. Typically a business in considered new while it's in the early stages of its operations and does not yet have a significant market share.
The IRS has several pages on their website for new businesses including:
Most new businesses would benefit from working with a local enrolled agent and small business tax consultant like Ken-Mar Tax.
LLC (Limited Liability Company): A US-specific form of a private limited company. It is a business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.
S-Corp (S Corporation): A form of corporation that meets specific Internal Revenue Code requirements. The significant feature of an S Corporation is that it provides its owners with limited liability, but profits and losses pass-through to their personal tax return.
C-Corp (C Corporation): A legal structure for a corporation in which the owners, or shareholders, are taxed separately from the entity.
Partnership: A business structure in which two or more individuals manage and operate a business in accordance with the terms and objectives set out in the Partnership Agreement. Profits and losses are passed through to the individual partners for tax purposes.
Sole Proprietor: A person who owns an unincorporated business by themselves. The sole proprietor is personally liable for all the debts and liabilities of the business, and also pays taxes on their income from the business as part of their personal tax return. This type of business structure does not provide any liability protection to its owner, which means that the owner’s personal assets are at risk if the business is sued. Additionally, sole proprietors may be subject to self-employment tax on their income from the business. The IRS considers a sole proprietor as an entity separate from its owners for tax purposes. As such, the sole proprietor must obtain an Employer Identification Number (EIN) and comply with other IRS requirements relating to business taxes. They may also need to register with their state or local government in order to do business. It is important for sole proprietors to keep adequate records of their income and expenses, as these will be needed when filing taxes.
Ken Weinberg, owner of Ken-Mar Tax and enrolled agent, offers consultations regarding different business structures such as LLC, S Corporation, C Corporation, Partnership, and Sole Proprietor. Ken is not a tax attorney and will not provide legal advice, but as an enrolled agent he can review the tax advantages and disadvantages of each option, let you decide on the best structure for your business and point you in the right direction for the paperwork that is appropriate for your choice.
Gig Economy: A sector of the economy which is comprised of independent contractors and freelancers who perform temporary, flexible jobs. This work is often facilitated by a digital platform that connects gig workers with potential jobs. From a tax perspective, these workers are considered self-employed, so they are responsible for paying their own taxes, including self-employment tax, to the Internal Revenue Service.
Gig Worker: An individual who works part-time, temporarily or on a per-project basis, often for multiple clients at the same time. They are considered independent contractors for tax purposes, meaning they are responsible for managing and paying their own taxes, including income tax and self-employment tax. This is in contrast to traditional employees, who have their taxes withheld by their employer.
For the S corporation owner who hopes to deduct his or her health insurance as a self-employed health insurance deduction on Schedule1 of the owner’s personal Form 1040, the term “earned income” can create some complexities. Read our post "How Do Owners of S Corporations Deduct Their Health Insurance?" for the lengthy details or contact Ken for a free phone consultation.
According to the CCA, (Chief Counsel Advice 202151005) you must include the net rental income in calculating your net self-employment income—which could cause you to owe self-employment tax, if you provide services to renters and the services fit a few requirements. Determining whether providing services to renters will trigger exposure to the self-employment tax can be easier with a small business tax consultant like Ken-Mar Tax. Or read more details in "Do I Need to Pay Self-Employment Tax on Airbnb Rental Income?"
All individuals with self-employment income must pay self-employment taxes, regardless of their age.
There are many questions about self-employment taxes, like:
- How Much Are Self-Employment Taxes?
- Who Pays Self-Employment Taxes?
- How Do I Report Net Earnings from Self-Employment?
- Is There Income Not Subject to Self-Employment Taxes?
Answered in post: When Do I Have to Pay Self-Employment Taxes?