Employer identification number
You may need to get an EIN for federal tax purposes. Search “do you need an EIN” on IRS.gov to find out if you need this number. If you do need one, you can apply for it online.
Accounting Method
An accounting method is a set of rules that you use to determine when to report income and expenses. You must use a consistent method. The two that are most common are the cash and accrual methods. Under the cash method, you normally report income and deduct expenses in the year that you receive or pay them. Under the accrual method, you generally report income and deduct expenses in the year that you earn or incur them. This is true even if you get the income or pay the expense in a later year.
Employee health care
The Small Business Health Care Tax Credit helps small businesses and tax-exempt organizations pay for health care coverage they offer their employees. You’re eligible for the credit if you have fewer than 25 employees who work full-time, or a combination of full-time and part-time. The maximum credit is 50 percent of premiums paid for small tax-exempt employers, such as charities. For more information on your health care responsibilities as an employer, see the Affordable Care Act for Employers page on IRS. Gov.
Get all the basics of starting a business on IRS.gov at the Small Business and Self-Employed Tax Center. Remember, for every tax problem, there’s a solution.
(Constant W. Watson III, CPA, CTRS, is both a Certified Public Accountant and a Certified Tax Resolution Specialist. For a Free Consultation, call him at 708-206-9900.)
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