Small Business: Finance & accounting
If you own your own company, you can skip a salary in favor of distributions, but the IRS still wants its share of the money you take home.
Erin, Kailua-Kona
Do shareholders have to take a salary in an S corp? Can they just take distributions? How about an LLC?
A dry cleaner considers turning customers' absentmindedness into a tidy tax break.
Taylor, Jackson, Miss.
I own a dry cleaning business and was wondering what to do with all the forgotten or left-behind clothes. They date back a few months or as far back as a year. I read that by donating them I could get a tax write-off.
Handling the client that wants the goods but doesn't want to cough up a check.
Susan Lewis, Lancaster, Calif.
Can we legally hold a client's paperwork if they haven't paid their bill? We do their bookkeeping and they haven't paid in months. We haven't done any additional work for about two months, and now they are asking for their paperwork back. If we send it to them, we will never get paid.
Business owners can write off many of their health care costs, but complying with IRS rules requires some planning.
Jonathan Cottor, Scottsdale, Ariz.
I have an LLC, and I’m seeking some advice about my family’s medical expenses. One accountant told me they can be run through the LLC as a business expense, and I’ve been paying the insurance premiums and any eligible co-pays and FSA-qualifying-type out-of-pocket costs through the business as an expense. I haven’t set up a separate HSA account, since the medical expenses run through the business and reduce my taxable income anyway when it pulls over to my personal return.
Another accountant has questioned this logic, and advised me that medical expenses need to reside solely on my personal return and are not business expenses. Who’s right? Read more…
Your true net profit is the number that potential buyers will want to know.
Susie Pemberton, Centralia, Mo.
I live in a small town and own a child care facility. My gross income in 2008 was $126,134. Someone’s interested in buying it, and they’re waiting for me to give them a price. I understand that I need to “adjust” my expense report for 2008, but I’m not sure what to use for a multiplier. I’ve been in business for six years, and can see room for expansion in the future. How do I name my price?
How much should you pay your company directors? First, take a hard look at what skills they'll need to guide your business.
Paul Dzera, MGBD, New York City
What would you recommend for determining board of directors' fee levels (annual retainer, board meeting fees, committee meeting fees, etc.), both in cash and stock options? I have a small public company with revenues of about $30 million. To date, I have reviewed the Director Compensation Report available through the National Association of Corporate Directors, but their "smaller" company information is for companies with revenues ranging from $50 million to $500 million.
Some sales aren't worth winning. If parts of your company are successful and others aren't, it's time to purge.
Sharron Stankiewicz, Ohio
I own three hearing aid businesses, all listed under the same corporate name but located in different areas. Two of them are going bust. Can I get out of my lease and still keep the one successful business running? What could the landlord do if I simply walked away from those leases where the businesses are failing?
Sorry, it's legal, and you may even have to pay more than just the rent.
Richard Barker, Aprizona Florist, Covington, Ga.
Our business went south, and as a result we had to break our lease. Less than 30 days later, the landlord rented the space to a new tenant. Six months after that, we were served with papers demanding $12,000, which is the remaining rent on the lease. Is it legal for the landlord to collect rent from both new and old tenants?
For retailers that don't want the overhead of stockpiling merchandise, drop shipping can be a cost-saving option.
Mike, Queens, NY
I started a home-based wholesaling business six months ago and got four credit cards totaling $18,000. I was scammed out of $10,000 and invested another $4,000 into a Web site and advertising. Now my cards are almost maxed out, and I need the cash or credit to purchase merchandise. Business people tell me it takes a few years before turning a profit, but I've worked like the devil these past six months to finally get the contacts and deals I've been searching for, only now I don't have the cash or the credit. Is there anything I can do?
Want to write off the cost of meals while you're traveling? Here's a rundown on what to deduct, and how.
Donna, Rome, N.Y.
My boss is an electrician and is working 4 hours away from his office. Can all his meals be deducted while away from his home office?
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Designer Chuck Comeau set up his manufacturing in Plainville -- 240 miles away from a major airport. More -
As staffs shrink, business owners are taking on support duties they haven't had to handle in years. More
