Since, business owners and businesses are subject to taxes whether it is federal, state and local, it is important to avoid making grave mistakes when filing taxes for your business. You must know what and when to file to avoid penalties and/ or activities that the IRS might define as tax fraud or financial crimes. Keeping good records and building a valuable relationship with a good tax adviser is important to maintain your books, avoid these penalties and ensure you are following the best business practices. 

Sometimes knowing when to file and what to file is one of the greatest obstacles that many business owners face; so, building your business foundation on solid ground and the foundation is vital to business growth and sustainability.

The program began with Victor discussing the Beneficial Ownership Information (BOI) reporting. He went over how to complete the filing, who is a beneficial owner and he illustrated how important it is to look at what types of filings are available. Moreover, he mentioned that it is better to register and to do it right so you are not subject to fines and fraudulent activities.

“Report all the income that you are making in business including cash sales because reporting your sales properly is important. Depending on your legal structure and how you file, please report what you need to report in your tax forms," Victor explained. “If you do not report your income, you can miss opportunities or even end up paying penalties. This is why it is a good idea to take it to your tax professional,” Victor added.

Some other informative information Victor gave us tonight is the following:

• The Financial Crimes Enforcement Network (FinCen) is a bureau of the US Department of Treasury (like the IRS) that checks financial transactions, money laundering, terrorist financing, etc.
• Important Link for Beneficial Ownership Information Report (BOIR) https://boiefiling.fincen.gov/boir/html
• This is the NJ Sales tax guide where you can find if your product or service is taxable or non taxable https://www.nj.gov/treasury/taxation/pdf/pubs/sales/su4.pdf

Then, Odessa Jackson went over some different aspects in the IRS forms and information for small business owners and left us with a great deal of knowledge on how to utilize the IRS website.

“You should constantly be auditing your businesses and its income and expenses. You should also be reconciling this against your business accounts,” Odessa explained. “The IRS wants cleaner ins and outs from the businesses so they know how much money they are pulling in,” she continued.

Some other informative information Odessa gave us tonight is the following:

• We have to go online and look at the IRS news releases because there is a lot of new information out there.
• Depending on the filing requirements and type of services, you will have a form or schedule that you will need for your filing requirements, but discuss with the tax professional on tax law.
• You will benefit from reviewing the instructions for the form and speaking with a tax professional before moving forward.
• Estimated taxes are taken quarterly. When you are not receiving any wage as an employee and you are self-employed then you have the responsibility of reporting/ making those payments quarterly. You need to keep up with the accounting and know income/ expenses. Look in the form 1040 E because this helps you with the checklist.
• The business forms are different please go in the instructions and take a long and keep all your documents and files up-to-date.

Last, Osiris (also a LAEDA alumnus) spoke about sales tax. “Sales Tax is a state and local government mandate that varies from state to state so knowing which of your products or services are subject to sales tax is important so that you are properly collecting sales tax on taxable goods/ services and not collecting sales tax on everything.”

Some other informative information Osiris gave us tonight is the following:

• https://www.njgca.org/wp-content/uploads/2019/05/NJ-Sales-Use-Tax-Guide-11-18.pdf
• Tax withholding estimator https://www.irs.gov/individuals/tax-withholding-estimator
• The government on income that is made by the business imposes income tax and sales tax is added to the price of that item after you purchase the product or service.
• Some sales could be exempt from sales tax
• Know the items that are subject to sales tax

Please do your research to determine best options for business owners to avoid potential problems. Keeping good records is virtual not just for growth of your business, but also the survival of your business as well. You as the business owner will be responsible for the filing of your tax papers and doing it to the best of your ability with the right foundation, knowledge, research, and guidance of a tax professional.

Do your research and file correctly to avoid pitfalls that would otherwise cost a heavy amount of money.

To view LAEDA’s calendar of upcoming events, visit the following link: http://laeda.com/Events.aspx and if you would like to give us a call you can reach us at 856-338-1177.