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Asian Women In Business
Tax Issues and Record KeepingMonday Nov. 10th 2014
Presented by Chunyee Wong Miot, CPA PC626 RXR Plaza, Suite 631, Uniondale, NY 11556
T: (516) 522-2780; F: (516) [email protected]
The importance of having a proper bookkeeping system
• It enables you to run your business more efficiently and effectively
• It saves time and minimizes error• It shows you the true picture of your operation
• It provides a good document for financing needs
• Easier transition when changing staff
• It provides accountants with accurate and timely information
• It makes auditing a breeze
Create a Bookkeeping System
• Software: Quickbooks, Preachtree
• Record all business transactions
• Keep receipts and paper work
• Proper Classification of Income, Expenses, Assets, Liabilities and Equity
•Cash basis or Accrual basis
(Refer to sample financial statements: profit and loss statement, balance sheet and cash flow statement)
Profit and Loss Statement
• Gross RevenueSales Consulting Fees
• Cost of Good SoldPurchasesLabor CostsFreight and Shipping
Profit and Loss Statement• Operating Expenses
Accounting and Legal FeesSalaries – OfficersSalaries – StaffBank ChargesOffice SuppliesInterest ExpensesDepreciationAmortizationUtilitiesDues and SubscriptionFinance ChargesTaxes
Balance Sheet
• Assets • Current Assets Cash Accounts Receivables Inventory Prepaid Expenses Loan Receivable
• Fixed Assets Equipments (5 years) Furniture and Fixtures (7 years) Automobile Real Estate Property(27.5 years) Leasehold Improvement (over lease term) Less Accumulated Depreciation
Balance Sheet
• Intangible AssetsOrganization CostsPatentTrade MarkLess Accumulated Amortization
• Other AssetsSecurity DepositLoan Receivable
Balance Sheet
• Liabilities• Current Liabilities (within 1 Year)
Accounts PayableLoans Payable (within 1 year)Accrued ExpensesPayroll Taxes PayableSales Tax PayableCredit Card Payable
Balance Sheet
• Long Term Assets (over one year)Loans PayableLoan from ShareholdersLine of Credit
• Equities (investment & income/loss)CapitalAdditional Paid in CapitalRetained EarningCurrent year Earning
Balance Sheet
Business taxes Payroll Taxes – Social Security Taxes: 6.2% for wages up to $117,000 for 2014
- Medicare Taxes: 1.45% for all wagesEmployee Vs Independent ContractorSales Taxes – 8.875% for businesses located in 5boroughsUse Taxes (Refer to Sales tax table for other New York Counties)Business income taxes and franchise fees Metropolitan Commuter Tax
Special business deduction for start up businesses
Start Up Costs: $5,000 deduction in initial year Organization Costs: $5,000 deduction in initial year Home Office Deduction Travel Expenses – 56 cents per mile Meal & Entertainment – 50% START-UP NY program: No Tax for 10 years
Qualified business must locate in tax-free zone: in or near State University of New York campuses and some private colleges.
Home Office Deduction
Regular Method Percentage of home used for business Actual expenses determined and records
maintained, such as utilities, rent & depreciation Home-related itemized deductions apportioned
between Schedule A and business schedule, such as mortgage interest & property tax
Deduction cannot exceed gross income from business use of home less business expenses
Amount in excess of gross income limitation may be carried over
Home Office Deduction
Simplified Method Standard deduction of $5 per square foot of home
used for business (maximum 300 square feet) = Maximum $1,500 Deduction
Home-related itemized deductions claimed in full on Schedule A
No depreciation deduction, no recapture of depreciation upon sale of home
Deduction cannot exceed gross income from business use of home less business expenses
Amount in excess of gross income limitation may not be carried over
Accounting Method
Cash Method Income are recognized when payment is received. Expenses are recognized when payment is made.
Accrual Method Income is recognized when services are rendered and goods are shipped. Expenses are recognized when it has occurred.
ObamaCare
Every one has to have health insurance by 01/01/2014.
Business with 50 plus full-time employees must provide health insurance plan.
NYS official website: https://nystateofhealth.ny.gov
Chunyee Wong Miot, CPA
626 RXR Plaza, Suite 631Uniondale NY 11556T: (516) 522-2780; F: (516) 522-2781
375 West Broadway, 3rd FloorNew York, NY 10012T: (917) 488-7975; F: (212) 937-5217
Email: [email protected]
Asian Women In Business
42 Broadway, Suite 1748New York, New York 10004Tel: 212.868.1368 - Fax: 877.686.6870Email: [email protected]
