Are you thinking of starting a new business? If so there a few things you should know.
What type of business do you want to do? This has to be something you love and are good at.
Do you have the qualifications to earn the respect in your field?
Who are your competitors? Once you have determined who they are can you compete with them? If you have a WalMart on every corner it may be difficult to open a store that sells a little of everything.
Are you going into a service type of business? If so, do you like people? If you do not like to interact with people the service industry is probably not for you.
Okay, so you now have an idea of what you want to do. Now let's take a look at what the IRS's definition of what a business is:
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| Rob Spracklin |
The Internal Revenue Service reminds taxpayers to follow appropriate guidelines when determining whether an activity is a business or a hobby, an activity not engaged in for profit.
In order to educate taxpayers regarding their filing obligations, this fact sheet, the eleventh in a series, explains the rules for determining if an activity qualifies as a business and what limitations apply if the activity is not a business. Incorrect deduction of hobby expenses account for a portion of the overstated adjustments, deductions, exemptions and credits that add up to $30 billion per year in unpaid taxes, according to IRS estimates.
In general, taxpayers may deduct ordinary and necessary expenses for conducting a trade or business. An ordinary expense is an expense that is common and accepted in the taxpayer’s trade or business. A necessary expense is one that is appropriate for the business. Generally, an activity qualifies as a business if it is carried on with the reasonable expectation of earning a profit.
In order to make this determination, taxpayers should consider the following factors:
- Does the time and effort put into the activity indicate an intention to make a profit?
- Does the taxpayer depend on income from the activity?
- If there are losses, are they due to circumstances beyond the taxpayer’s control or did they occur in the start-up phase of the business?
- Has the taxpayer changed methods of operation to improve profitability?
- Does the taxpayer or his/her advisors have the knowledge needed to carry on the activity as a successful business?
- Has the taxpayer made a profit in similar activities in the past?
- Does the activity make a profit in some years?
- Can the taxpayer expect to make a profit in the future from the appreciation of assets used in the activity?
Do you have a business plan? Mission or Vision Statement? Marketing Plan?
Are you still interested in starting your own business? If so you may need some direction and/or help in accomplishing your dreams. Wanting it isn't enough. It is smart to surround yourself with people who have "been there done that" and can help you start and succeed.
BXXG is a consulting business that will do just that. They are accomplished and willing to share their knowledge. They have a variety of services that are an asset to any and all companies. Their services include but are not limited to:
- General Business Oversight
- CEO/COO Services
- Business Structure
- Family Owned and Small Business Expert
- Employee Retention and Evaluations
- Insurance Coverage to meet statutory requirements and asset protection
- Workman's Compensation assessment
- Business Plans, Mission Statement, Vision Statement
- Marketing strategies, Branding Advertising
- Financial Analysis and Bookkeeping Systems
- Contract Negotiations
- Information Security and Identity theft
- Hazardous Procedures and Plan of Action
- MSDS requirements
- Safety Plans
- Business Operations
- Operational Efficiency
- Energy Audits and Recommendations
- Identify and develop new products, services and markets
- Employee Management Training
- Succession Planning
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You don't need to pull the burden alone. Call us for a free consultation on how BXXG can help you.719-240-9180
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