Determine Whether Your Small Business is A Business or a Hobby for Further Legitimate Deductions

Maximize your deductions during
the next tax season and just watch
as your small business flourishes.

The Internal Revenue Service reminds taxpayers to follow appropriate guidelines when determining whether an activity is a business or a hobby, an activity not engaged in for profit.

In general, taxpayers may deduct ordinary and necessary expenses for conducting a trade or business. An ordinary expense is an expense that is common and accepted in the taxpayer’s trade or business. A necessary expense is one that is appropriate for the business.

Generally, an activity qualifies as a business if it is carried on with the reasonable expectation of earning a profit.

In order to make this determination, taxpayers should consider the following factors:

• Does the time and effort put into the activity indicate an intention to make a profit?
• Does the taxpayer depend on income from the activity?
• If there are losses, are they due to circumstances beyond the taxpayer’s control or did they occur in the start-up phase of the business?
• Has the taxpayer changed methods of operation to improve profitability?
• Does the taxpayer or his/her advisers have the knowledge needed to carry on the activity as a successful business?
• Has the taxpayer made a profit in similar activities in the past?
• Does the activity make a profit in some years?
• Can the taxpayer expect to make a profit in the future from the appreciation of assets used in the activity?

The IRS presumes that an activity is carried on for profit if it makes a profit during at least three of the last five tax years, including the current year — at least two of the last seven years for activities that consist primarily of breeding, showing, training or racing horses.

If an activity is not for profit, losses from that activity may not be used to offset other income.

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READ MORE >> www.sba.gov (U.S. Small Business Admin): Is It a Business or a Hobby?

Call GBC Income Tax Services today at 678-366-9232 for all your tax and IRS needs!
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• GBC Tax Offers Atlanta Experienced IRS Representation
• Essential Financial Services
• Tax Requirements By State
• Visit the Internal Revenue Service's Website
• GBC Audit Services

Managing External Audit Relationships

An external auditor is key in going
over all the details of your records.

External auditors are certified professionals who check the accuracy and completeness of a business's financial statements. Managing the external audit relationship can be difficult for small business owners who must balance the auditor's requests for sensitive financial information, the need for company confidentiality as well as the choice of which auditor to engage.

Up-front communication is the hallmark of the selection process. Business owners should seek an auditor who is keen to discuss issues as they arise and who doesn't hide the risk of financial decisions from the company or its managers.

Once you have selected a compatible professional, keep these three points in mind to guide you through the rest of the process wisely:

1. Traits of a Good Relationship: The key traits that define a good relationship between the external auditor and the business executives can be summed up in three words: collaborative, congenial and communicative. This last trait is merely an extension of the open communication policy the auditor and business should adopt starting in the selection process. Collaborative and congenial mean both parties recognize their obligations to the auditing process. The business owner is willing to provide documents when requested by the auditor, in a reasonable format, and timing issues are discussed forthrightly. In return, the auditor is fair and keeps an open mind, assuming that errors point to mistakes rather than fraud unless there is strong evidence to think otherwise.
2. Consequences of a Bad Relationship: A breakdown in any of the three key traits can have serious repercussions for the business. In most jurisdictions, the law requires companies to hire an external or independent auditor, so any snag in that process may put the company at breach of law. Further, the audit opinion may be delayed, withheld or qualified if something goes wrong. A qualified opinion means the auditor can complete her job but finds that the company hasn't provided full and clear information or possibly has been subject to fraud or tax evasion. The business should try to avoid these consequences at all times, keeping the lines of communication open and setting clear goals and expectations during the engagement process.
3. Extending the Auditor's Engagement: Sometimes, the auditor or the company may not be able to complete the audit in the time frame that was arranged initially. In this instance, it is important for the scope of work to be clarified so as to extend the auditor's engagement, lengthening the amount of time it hires the auditor. A scope of work document should be drawn up at this point, specifying the balance of work to be completed, the amount of time for the contract extension and any procedural issues that need to be addressed. External audits normally take place every 12 months, so any external audit engagement lasting for more than a few weeks is likely to throw this schedule off track in the future.

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READ MORE>> smallbusiness.chron.com: How to Manage External Audit Relationships

Call GBC Income Tax Services today at 678-366-9232 for all your tax and IRS needs!
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READ MORE

• GBC Tax Offers Atlanta Experienced IRS Representation
• Essential Financial Services
• Tax Requirements By State
• Visit the Internal Revenue Service's Website
• GBC Audit Services

GBC Services, LLC Now Offers Expert IRS Representation in Atlanta Area

Hire an expert to defend you
in a timely fashion when facing
possible trouble with the IRS.

FOR IMMEDIATE RELEASE

GBC Tax and Audit Services have expanded to now include IRS Representation.

Don’t risk your company’s future by going into an IRS audit unprepared. Be proactive and contact GBC Tax Services of Atlanta for a free consultation today. There is no obligation and getting proper advice maybe just the thing you need to regain control of the situation and straighten out the problems.

Tax resolution is not a simple affair and one wrong move can cost a business greatly. We all have heard the horror stories of companies that were levied with hefty fines and forced to close their doors, seizure of property, freezing of accounts, and even jail time for noncompliance. The risks are too great to go with an unproven team or unproven strategies, so better to take heed in a timely manner.

GBC Tax Services provides a skilled team of professionals who work hard to keep your company afloat in your time of need, meeting with the IRS on your behalf, with eyes wide open. We will also thoroughly review and revise your accounting to maintain your books and straighten out your finances.

Once the IRS storm has quelled, GBC Tax and Audits will continue to offer consultations and advice, so contact us today and rest assured that your business is in good hands.

GBC Tax and Audit Services, Certified Public Accountants is located at:
1950 North Park Place SE, Suite 150, Atlanta, GA 30339.
Telephone: 678-366-9232

GBCTax.com
GBCAuditServices.com
For Media Inquiries: Ghassan R. Gharaizi, Quickbooks ProAdvisor and Certified Public Accountant.

GBC Now Using E-Verify to Help Atlanta Businesses; Outsource Your HRMS.

Ensure that you have
secured a legal workforce.

FOR IMMEDIATE RELEASE

GBC Tax and Payroll Services are now offering E-Verification for all your HRMS needs.

E-Verify employer agents, formerly called designated agents, use E-Verify to confirm the employment eligibility of another company's employees in regard to their immigration status. Our E-Verify employer agents may also handle payroll and other administrative tasks that include managing the Employment Eligibility Verification (Form I-9) process. It’s a typical part of a Human Resource Management and Payroll Service we offer through GBC. Companies or small businesses that are mandated, (or who choose, in some states), to participate in E-Verify have the option to have a E-Verify employer agent use E-Verify on their behalves and deal with the red tape for them. Companies big and small use E-Verify employer agents for many reasons; in the state of Georgia it is usually required by law.

U.S. law requires both public and private companies to employ only individuals who may legally work in the United States – either U.S. citizens, or foreign citizens who have the necessary authorization. This diverse workforce contributes greatly to the vibrancy and strength of our economy, but that same strength also can attract unauthorized employment, potentially resulting in easily-avoidable hassles for you. E-Verify is an Internet-based system run by the U.S. Department of Homeland Security (DHS), in partnership with Social Security Administration and U.S. Citizenship and Immigration Services, and it is the best way employers can ensure a legal workforce. GBC Services, LLC is fully licensed to do this task. Call on us to handle your e-verification, along with your payroll and human resources management, and eliminate any troubles that could ensue!

GBC Tax and Payroll Services, Certified Public Accountants is located at:
1950 North Park Place SE, Suite 150, Atlanta, GA 30339.
Telephone: 678-366-9232

GBCTax.com
GBCPayrollServices.com

For Media Inquiries: Ghassan R. Gharaizi, Quickbooks ProAdvisor and Certified Public Accountant.

A Quiz: How Much Do You Know About State Taxes?

Find a good accountant to
help you with your state taxes

Have some fun and learn some new things with this States of Taxation Quiz!

Test your smarts and find out how your state measures up.

See how much you know about state taxes...

TAKE QUIZ HERE >> AARP: States of Taxation Quiz

Call GBC Income Tax Services today at 678-366-9232 for all your tax and IRS needs!
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READ MORE

• GBC Tax Offers Atlanta Experienced IRS Representation
• Essential Financial Services
• Tax Requirements By State
• Visit the Internal Revenue Service's Website
• GBC Audit Services

Deducting Miles For Business, Medical, Moving & Charity

Your accountant or CPA can
help you find all your
legitimate deductions

Exactly how much can you deduct? 

For 2014, the standard mileage rates for the use of an automobile (which includes cars, vans, pickups or panel trucks) in cents per mile are:

         56 c/mi for business miles driven

         23.5 c/mi driven for medical or moving purposes

         14 c/mi driven in service of charitable organizations

The rates for business, medical and moving expenses will be different for the 2015 tax year since those rates are adjusted each year – expect to see those updated numbers reported here in December 2014. However, as the rate for charitable expenses is fixed by statute, it can only be changed by Congress so that number will likely sit tight at 14 cents just like it has since the Clinton era.

READ MORE >> FORBES.COM: "Back to School 2014: Deducting Miles For Business, Medical, Moving & Charity"

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