Understanding the Concept of Business

Starting a small business isn’t easy, but can be made less confusing with the right strategy in place for success. Below are a few simple ways you can properly plan for the growth of your business and avoid common issues that might arise with ineffective strategizing. Building business strategy Be Organized Begin strategizing for your small business by first getting organized, whether that be with your physical space and office setting or simply with the way you function throughout the day. A great way to start is by creating a daily list that you can look to for any necessities that you need to get done throughout the day. Your business won’t run itself so all the small, mundane tasks need to be taken care of as you prepare for success. Do What You Love You can’t really build a business that succeeds without creating a strategy that focuses on what you love to do. No matter the industry, there needs to be a certain level of passion that goes into whatever you are creating that will tr...

  Individual Retirement Arrangements (IRAs) Roth IRAs 401(k) Plans 403(b) Plans SIMPLE IRA Plans  (Savings Incentive Match Plans for Employees) SEP Plans  (Simplified Employee Pension) SARSEP Plans  (Salary Reduction Simplified Employee Pension) Payroll Deduction IRAs Profit-Sharing Plans Defined Benefit Plans Money Purchase Plans Employee Stock Ownership Plans (ESOPs) Governmental Plans 457 Plans Help with Choosing a Retirement Plan

  The checklist below provides the basic steps you should follow to start a business. This list should not be construed as all-inclusive. Other steps may be appropriate for your specific type of business. Information about specific industries can be found at the  Industries/Professions Web page . Each state has additional requirements for starting and operating a business. For information regarding state-level requirements for starting a business, please refer to  your state's website . Refer also to the Small Business Administration's  10 Steps to start your business . Apply for an Employer Identification Number (EIN) if applicable Select a business structure Choose a tax year If you have employees have them fill out  Form I-9  PDF  (PDF) and  Form W-4 Pay your business taxes

  You must figure your taxable income on the basis of a tax year. A “tax year” is an annual accounting period for keeping records and reporting income and expenses. An annual accounting period does not include a short tax year. The tax years you can use are: Calendar year  - 12 consecutive months beginning January 1 and ending December 31. Fiscal year  - 12 consecutive months ending on the last day of any month except December. A 52-53-week tax year is a fiscal tax year that varies from 52 to 53 weeks but does not have to end on the last day of a month. Unless you have a required tax year, you adopt a tax year by filing your first income tax return using that tax year. A required tax year is a tax year required under the Internal Revenue Code and the Income Tax Regulations. You have not adopted a tax year if you merely did any of the following. Filed an application for an extension of time to file an income tax return. Filed an application for an employer identificat...

  Why should I keep records? Good records will help you monitor the progress of your business, prepare your financial statements, identify sources of income, keep track of deductible expenses, keep track of your basis in property, prepare your tax returns, and support items reported on your tax returns. What kinds of records should I keep? You may choose any recordkeeping system suited to your business that clearly shows your income and expenses. Except in a few cases, the law does not require any special kind of records. However, the business you are in affects the type of records you need to keep for federal tax purposes. How long should I keep records? The length of time you should keep a document depends on the action, expense, or event the document records. You must keep your records as long as needed to prove the income or deductions on a tax return. How should I record my business transactions? Purchases, sales, payroll, and other transactions you have in your business gener...

The form of business you operate determines what taxes you must pay and how you pay them. The following are the five general types of business taxes. Income Tax Estimated Taxes Self-Employment Tax Employment Taxes Excise Tax Income Tax All businesses except partnerships must file an annual income tax return. Partnerships file an information return. The form you use depends on how your business is organized. Refer to  Business Structures  to find out which returns you must file based on the business entity established. The federal income tax is a pay-as-you-go tax. You must pay the tax as you earn or receive income during the year. An employee usually has income tax withheld from his or her pay. If you do not pay your tax through withholding, or do not pay enough tax that way, you might have to pay estimated tax. If you are not required to make estimated tax payments, you may pay any tax due when you file your return. For additional information ref...