The Day to Day of your Business: An Overview for Small Business Owners
As business owners, we have a constant need to be involved in multiples areas every day, like accounting, tax, marketing, personnel management, sales, etc. This is why its very important to go step by step and enlist the help of professionals who can guide you in areas you do not have the required experience.
It is important to note that if you have a business that operates from home and it has not been registered as a company, it still has accounting and tax obligations to fulfill.
Here is some information that will be useful in managing the day to day of your business, to ensure compliance with its obligations.
Company Registration and Information
Companies are to be registered with the Florida Department of State, where you also register fictitious names and trademarks. Every year you have to file an annual report to the Department of State to keep the company current and avoid penalties. Every state varies in its regulations, so its important that you check you state's website for more information.
Federal Tax Obligations - Internal Revenue Service (IRS)
If you create a company, or have a P.A. (Professional Association) and are planning on having employees, you must obtain a Federal Employer ID Number (FEIN or EIN) from the Internal Revenue Service (IRS). This number is used to open bank accounts, do your taxes and build credit history.
Every year all legal entities (e.g. Corporations, LLC, and Trusts) and all individuals must file a tax return detailing their revenues, costs and expenses to the IRS. Each type of organization has different deadlines to file their taxes and, if necessary, may get an extension for filing. For the extension to be valid it must be submitted before the deadline.
Other obligations to the IRS are the quarterly filing of payroll tax returns (Form 941) and the annual declaration of tax on unemployment (Form 940).
Sales & Use Tax
The sales tax varies from state to state, and it might be subject to different ordinances all throughout the United States.
In the state of Florida, for example, the Florida Department of Revenue (FDOR) collects sales tax. Most businesses are required to apply for a resell certificate, thus becoming withholding agents of sales tax for the FDOR; this allows the business to get tax exemptions on the purchase of goods for resale.
Sales tax must be collected on all eligible goods and paid to FDOR per the reporting frequency assigned to your business. Sales reports must be filed even if there were no sales during the period.
County and City
Each county and city may require you to register and pay an annual license to operate. The cost of the license depends on the type of business and location, as each city and county have different rates and regulations. For further information you should ask information at the city offices of where your business will be functioning. These licenses must be obtained within 30 days of starting operations and shall be displayed in a conspicuous place in the business offices.
Hiring & Managing Employees
When a business hires and manages employees, an additional set of responsibilities are required by federal, state, and on occasion city governments. These responsibilities vary on a state basis. GBS Group provides a full guide into hiring and managing employees, below is an outline of those responsibilities.
When employees are paid a wage, the employer must withhold the corresponding taxes for each employee and pay them to the IRS and to the Florida Department of Revenue on a quarterly basis by filing the 940 and RT-6 forms.
These are calculated based on the information an employee provides when they are hired by filling out a W-4 form.
All employees that work for your company must receive a W-2 form detailing their earnings and withholdings from the previous year by January 31st.
Work Eligibility verification
Its the employer’s responsibility to check that their employees are eligible to work in the United States. For every employee there must be an I-9 form filled out. The employee and the employer complete the form and follow the instructions to verify that the person is eligible for employment. You can find this form at www.uscis.gov. It is important that these forms are kept by the employer in case of an audit by the United States Citizen and Immigration Services (USCIS)
As mentioned previously it is important that business owners stay informed, as regulations change constantly and can vary from state to state. Seeking professional advice on a consistent basis is the best way to stay out of trouble.
If you are interested in more information of the day to day run of your company, contact us at GSB Group and let our consulting team help reach the next level of success.