So You Want to Start a Business!

   

So You Want to Start a Business!

• DEFINE YOUR BUSINESS PLAN: 
• Who? What? Where? When? Why? How? 
• DEVELOP A MARKETING PLAN: 
• How will you generate business? 
• REGISTER YOUR BUSINESS:
• with the City or Town Clerk. e.g. Ed Entrepreneur dba Opportunities Galore
• OPEN A SEPARATE CHECKING ACCOUNT FOR THE BUSINESS:
• Preferably an interest bearing, no service charge account -- and channel ALL business activity through this account 
• DEVELOP AN ACCURATE AND COMPLETE BOOKKEEPING/ACCOUNTING SYSTEM:
• One-Write system is good, not only for management purposes but also for tax reporting. 
• We offer free Quickbooks® Advice for Growing Businesses. The fastest, easiest way to manage your business. #1 Best Seller. 
• LIMIT YOUR PERSONAL LIABILITY EXPOSURE with insurance:
• Liability, Property Damage, Errors & Omissions
• Disability Income
• Business Continuation
• Medical
• Workers Compensation for employees and subcontractors
• Umbrella Policy
• IF YOU WILL HAVE EMPLOYEES:
• File SS-4 with IRS to obtain Employer ID # 
• File TA-1 with Commonwealth of Massachusetts
• File with Department of Employment & Training 
• Obtain W-4's and I-9's from each employee 
• Read "A Reference Guide to Massachusetts Employment Laws" 
• Payroll taxes to be collected and/or paid to IRS -- Federal income tax withheld, FICA, FUTA 
• MA -- Mass. income tax withheld, Job insurance 
• Payroll tax reports to be filed monthly, quarterly, yearly
• IRS -- 941, 940, W-2, W-3
• MA -- M-941, WR-1, DET-1, W-2, M-3
• IF YOU WILL HAVE SUBCONTRACTORS:
• Carefully review definitions and 20 questions for employee vs. subcontractor relationships 
• Obtain ID #, address, etc. (W-9) from each subcontractor 
• Keep accurate records 
• Issue 1099-MISC to each sub, File with 1096 
• IF YOU WILL SELL TANGIBLE PRODUCTS IN MASSACHUSETTS (SALES TAX STATE):
• You may have to collect sales/use tax 
• File TA-1 with Department of Revenue 
• Collect and pay sales/use taxes at least quarterly (ST9-Q) 
• KEEP ACCURATE RECORDS !!!
• Income (all business income) 
• Expenses (by category) 
• Owner's Draw is not an expense 
• Travel 
• Meals & Entertainment (get receipts and make notes)
• Vehicle use (keep a log of mileage/expenses) 
• Fixed Assets (What, when, cost, % business use) 
• Loans (record those from you, too) 
• RETIREMENT PLANNING:
• Your may be able to reduce the tax bite and provide for your future retirement by contributing to an 
• IRA 
• SEP-IRA 
• SIMPLE-IRA
• SIMPLE 
• 401(k), or 
• KEOGH plan 
• Pay yourself first! 
• HOW YOUR TAX LIABILITY WILL BE COMPUTED:
• Your net profit will be taxed by the IRS and MA for income tax purposes. The net profit just adds to the rest of your income to be taxed at whatever rate applies. Your net profit is also subject to Social Security taxes. For 2011 the rate is 15.3% of the first $106,800 (indexed), and 2.9% of any additional profit, but half of the SS/Medicare taxes are an adjustment against Federal taxable income. 
• See Social Security on-line Contribution and Benefit Base
• ESTIMATED TAX PAYMENTS: 
• Quarterly estimated tax payments are expected by both the IRS and MASS. Use forms 1040-ES and 1-ES. 

These are some of the important considerations for operating a 

business as a sole proprietor. Please contact this office for details and 

assistance with any or all of the above. We can guide you and relieve 

the tedious attention to detail so you can do what you do best.