A Small Business Legal and Tax Checklist

Date posted: December 1, 2016

tax

By Cliff Ennico

As a small business lawyer and business guru, I am asked lots of legal and tax questions.

Most of these questions are asked by “newbies” – people starting businesses for the first time. But even established businesses should be thinking – always – about their legal and tax environment.

On Wednesday, December 14, 2016, I will be hosting a one-hour webinar on BrightTalk.com from 2 p.m. to 3:15 p.m. East Coast time (11 a.m. to 12:15 p.m. Pacific Coast time) on “Legal and Tax Issues for Small Businesses and Their Owners.” Sponsored by the good folks at Verizon (www.verizon.com), this program will focus on the most common questions I get from owners of established small businesses. To sign up for the program, go to https://www.brighttalk.com/webcast/6255/221009?utm_source=presenter&utm_medium=social&utm_campaign=CE.

Whether or not you plan to join the webinar, here are some of the tough legal and tax questions you should be asking about your business right this very minute.

Is my legal entity still working for me? Perhaps you started out as a sole proprietor, but are thinking about forming a limited liability company (LLC) but it will make you “look bigger.” Maybe you are an LLC but are thinking about being taxed as a subchapter S corporation. Maybe you are a subchapter S corporation but are thinking about becoming a C corporation so you can launch a crowdfunded offering of your securities, or bring on foreign partners.

Should I consider trademarking my company name? So you’ve built a huge online following for your business on social media. You are now no longer a business but a recognizable “brand.”

Good for you, but without a registered trademark your brand will go nowhere. Time to register your trademark, or choose a new name if your current one is not trademarkable.

Do I have all the business licenses I need? State and local governments are desperate for revenue these days. Some of them are getting very creative in passing new taxes or extending old ones. Consider meeting with your lawyer or accountant at least once a year to learn about “what has changed” in the last year, and how to pivot your business so you don’t get audited.

Am I doing business in other states without knowing it? Your offices are in only one state. You never cross a state line when you drive from your home to your office. But your business may be operating in places and ways you don’t even know about.

If you are selling stuff on Amazon from an office in New York, but your inventory is being stored in an Amazon warehouse in Kentucky that ships from Kentucky and accepts returns in Kentucky, guess what? You are now a Kentucky business and are subject to all of that state’s business taxes.

Do I owe any taxes? Did your business have a tax liability of more than $1,000 last year? If so you now have to “estimate” and pay your income taxes four times a year. Are you taking a “mileage” deduction for your personal car but not keeping a log book showing when you use the car for business as opposed to personal purposes?

Are my workers properly classified for tax purposes?

Make no mistake – the IRS is auditing BIG in this area. Is your Wednesdays-only intern an employee or an independent contractor? It depends on whether or not he or she can schedule jobs. If you can tell someone to stop working on one project and start working on another, chances are, that person is an employee, even though he or she works only a few hours each week.

Look at each of your workers on an individual case by case basis. If you’re not sure about any person’s status, now’s the time to get it right, before the IRS reclassifies that person and socks you for tons of penalties.

Am I doing everything I can to protect my assets from lawsuits? If you have a corporation or LLC, that’s a great start, but are you “using” it or “losing” it? When I look at your business card or website, do I see your company name? Or something else?

Do you have all the insurance you need? Do you know the difference between “liability” and “errors and omissions” coverage? Is your intellectual property insured against copyright infringement (did you even know such coverage existed)?

Are there “disclaimers” in all of your legal documents and contract forms? Where did you get your “disclaimer” language come from? Did a lawyer prepare it, or did you just grab something off the Internet?

Should you consider putting all of your assets in the name of your spouse or other family member?

If you aren’t sure of the answers to any of these, or (worse) you don’t have a lawyer to talk about them with, consider signing up for my webinar. I guarantee you will learn at least one thing you don’t already know.

Cliff Ennico (cennico@legalcareer.com) is a syndicated columnist, author and host of the PBS television series ‘Money Hunt’. This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com. COPYRIGHT 2016 CLIFFORD R. ENNICO. DISTRIBUTED BY CREATORS SYNDICATE, INC. Follow him at @cliffennico.

 

Related Stories »

Leave a Reply

Your email address will not be published. Required fields are marked *

Time limit is exhausted. Please reload the CAPTCHA.

Why Businesses Fail »


18 Reasons Why Businesses Fail
Read More…

Listen to Rieva Now! »

Small Business Ideas

Get Small Business Ideas From Rieva

turning passion into profit »

turning passion into profit

Download your free ebook here!

Trends: small business ideas »

Get Updates »

Enter your email to subscribe to our RSS.

Free Download »

Free Download

Startup ideas for businesses to start now! Download here

Congrats Rieva Lesonsky! Named to Top 250 Business Journalists

Small Biz Money Tip »

Small Biz Money Tip

Pricing: Have more than one price for your product or service. Make one price seem more attractive than the other. People love a good deal, especially when they can relate one price to the other.
More Money Tips From Justin Krane

http://education.dandb.com/partner/90755/

Loan Center »

New Loan Center

Find a Small Business Loan