Wednesday, June 24, 2009
If my business is a limited liability company (LLC), how do I file? Should tip income be reported if I work for a restaurant? These questions and more were answered during the tax workshop sponsored by the Small Business Development Center.
Held on Thursday, June 11, 2009 on the campus of SC State University, the tax workshop was comprised of professionals from the Internal Revenue Service, the South Carolina Society of Enrolled Agents, the SC Department of Revenue, and the SC Employment Security Commission. This credibility prompted participation from a number of business owners.
John Goodwin, regional director for the Small Business Development Center, says this credibility is one reason why people would attend the recent tax workshop. Another incentive is because everyone must be concerned with their taxes. “Tax matters are something that we can’t live without,” says Goodwin. “It is important that we get the best understanding we can,” he continued.
Catherine Boags, a previous IRS agent and a current employee of JK Harris & Company, one of the nation’s largest tax representation companies, delivered information significant for every taxpayer. Boags, an enrolled agent, noted the five categories of business organizations and the necessary tax forms specific to each business owner.
For the business with only one owner and no employees, also known as a sole proprietorship, the 1040 tax form must be completed. Those who engage in a partnership or joint venture generally file form 1065, while corporation owners file the 1120 form. Other business entities include the S Corporation, defined as a marriage between a partnership and a corporation, requiring owners to file form 1120 S. Finally, the LLC provides limited liability to its owners, who may file as a sole proprietorship, partnership, or as an S Corporation.
According to Boags, there is sometimes a twist when taxes are involved, and an LLC demonstrates that. “If you are an LLC with one member,” says Boags, “you must file a sole proprietorship unless you file a form with the IRS saying that you want to file as an S Corporation. If you are an LLC with 2 members, fill out form 1065.”
While it may take some time to learn which tax forms are appropriate for you as a business owner, there are some steps that all business owners must take. If you have always wondered which files you must keep, permanent files include the following: depreciation and business property records, deeds and mortgages, loans and notes, amortization schedules, change in accounting methods, change in inventory methods, and other important and permanent legal documents. You must also keep all copies of filed tax returns or documents. Finally, make sure that your computer data doesn’t disappear. According to Boags, there are two types of people, those who do backups and those who will.
The tax workshop also included Jack Rash, a revenue officer for the South Carolina Department of Revenue, responsible for compliance and support collection services. Rash discussed the retail license, sales and use tax, special local tax, income tax, income tax withholding, estimated income tax payments, property tax, and he also highlighted some business tax incentives.
Regina Goff, district manager for the South Carolina Employment Security Commission, briefly discussed employer liability, wage, and unemployment insurance claims.
For assistance with filing your taxes, contact Catherine Boags at 1-888-874-4824. For more information on workshops and seminars presented by the Small Business Development Center, contact Pamela Free at (803) 536-8444.