Before you move to the cloud, examine the implications from a tax standpoint. The taxes change based on the country in which you are doing business. Best practice advice, check and recheck everything with your friendly CPA to know what you are getting into and the implications to your small business BEFORE you make a move.
Excerpt: KPMG recommends that a company moving to a cloud-based business model should examine its local country tax position to consider the character and source of the cloud income and/or payments and whether the cloud operations result in new or additional income, withholding or indirect taxes. Executives need to be mindful of the location of the servers and other infrastructure to take advantage of local incentives, while managing possible permanent establishment challenges made in the jurisdiction in which the infrastructure is located.
Read full article via Cloud Computing Exchange | Presented by Information Management. From KPMG via Information Management
Small business need-to-know and how-to taxes and accounting.
Excerpt: An overview of revised instructions and form to report foreign financial accounts over $10,000
Who must file Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts, known as an FBAR, and when?
Learn which foreign accounts must be reported, and which accounts are exempt.
Watch webinar originally presented on June 1st via Internal Revenue Service Webinar. From IRS
Need to keep up to date on the latest FATCA ……the IRS is offering a subscription to news updates here. News
Excerpt……..Prepared by the Large Business and International division (LB&I), the FATCA News and Information list provides information on the latest IRS news, guidance, regulations and other public information related to the Foreign Account Tax Compliance Act (FATCA) including information that affects:
Individuals with foreign accounts
Foreign financial institutions registration, reporting and withholding requirements
Non-Financial Foreign Entities
Tax and compliance professionals interested in the implementation and requirements of FATCA
Subscribe to news updates from IRS on FATCA here…….via Subscribe to the FATCA News and Information List. From IRS
We have posted other articles regarding business expense tips……..this one gives you some basics about travel, meals and entertainment…..what an auditor will look for in these expense allocations. Accounting and tax
Excerpt……….If you’re currently under audit, pay attention. If you never want to face an audit, pay attention. There are easy steps small business owners can take with their internal controls to audit-proof their business’ books.
Favorite areas that auditors like to explore are meals, travel, and entertainment expense because most people don’t know the rules for these deductions and there is widespread abuse in these areas . An examiner can pretty much guarantee a tax income stream from disallowing expenses in these categories.
Read full article……..via What Auditors Look for When Examining Meals, Travel, and Entertainment Deductions | Fox Small Business Center.
Small business takeaways……. global interests and heads-up
Excerpt……Multinational CFOs are increasingly looking to avoid the double taxation that can occur from selling a product in one jurisdiction when it is manufactured in another. Transfer pricing, or the movement of goods and services in order to allocate profits, has become a high-ranking concern for CFOs, according to a survey by Alvarez & Marsal Taxand, an affiliate of Alvarez & Marsal advisory firm.
Read full article…..via double taxation transfer pricing multinationals. From CFO.com
An update on the GAAP for small business / private company .. and news-to-watch.
Excerpt……CFOs and their tax departments at privately held companies will no longer be faced with the difficult and costly task of applying public accounting standards to their situations. The Financial Accounting Foundation (FAF) today established a new council to improve standard setting for private companies.
Read full article……via private company accounting GAAP FASB AICPA FAF. From CFO.com
Small business need to know —the IRS has a 9 lesson virtual workshop for small businesses, startups, entrepreneurs and home businesses……check this out….lots of critical and need-to-know information. Tax from IRS
IRS provides a workshop (virtual)………IRS Virtual Workshop. IRS.gov
Small business need-to-know……. will the tax credit be reinstated in 2012?…..answer is probably……information in the article includes the how-to R&D
Excerpt……..The basic research credit is 20 percent of research expenses over a base amount. In the government’s 2009 fiscal year, the credit amounted to an estimated $5.6 billion federal subsidy for research by private companies.
Here’s what you need to know about the research credit.
Read full article…..via 5 Things to Know About the Research Tax Credit : Money :: American Express OPEN Forum.
The IRS provides a publication here to assist you in determining your tax benefit/detriment by method of asset disposal. Small business need-to-know….. and don’t forget your CPA is your best help to determine what is optimum for you.
Read / download copy of full reference here….Publication 544 (2011), Sales and Other Dispositions of Assets. IRS.gov
The IRS posted this page with updated information for the employer sponsored health coverage …….W-2 reporting. Human resources, payroll, accounting and tax
Read full updated information here………..Form W-2 Reporting of Employer-Sponsored Health Coverage. From IRS
We have published links to information the IRS provides startups and small business owners prior……..here again is their page with links to various important information for the newbie or been around group.
Access links here………Small Business and Self-Employed Tax Center. From IRS
Important need-to-know for small business LLCs…….if you fit into these examples….or better yet, before you fit into these examples…….. get advice from your preferred CPA tax guru.
Excerpt………..As I discussed in two earlier blogs, joint ventures (JVs) need not—and often should not—be structured as tax entities (4/30/12), but if they are, a limited liability company (LLC) has become the entity of choice (4/17/12). In addition, internal JVs among group members make wholly owned operations tax efficient in some circumstances. Owners can step into LLC tax traps, however, when they fund their LLCs with debt. Preferred equity funding can achieve the same economics as debt while avoiding the traps.
Read full article……via Tax Traps in Loans to LLCs – Forbes.
Small business….. of-interest, need-to-know and news-to-watch…
Excerpt……Our results consistently indicate that greater equity risk incentives are associated with higher tax risk; however, higher tax risk does not necessarily imply greater equity risk incentives. These findings are robust to alternative estimation methods (i.e., simultaneous system of equations vs. OLS with lagged instrumental variable). We also find little evidence that the relation between equity risk incentives and risky tax avoidance varies by strength of corporate governance. Overall, we infer that equity risk incentives cause managers to undertake risky tax strategies in an effort to increase stock return volatility, and thus the value of their option portfolios
Read full article…via Equity Risk Incentives and Corporate Tax Aggressiveness — The Harvard Law School Forum on Corporate Governance and Financial Regulation.
Small business need-to-know and heads up tax.
Excerpt……An offer in compromise is an agreement between a taxpayer and the IRS to settle a tax liability for payment of less than the full amount owed. TIGTA undertook the audit to assess the effectiveness of the IRS’s OIC program at processing requests in a timely manner, consistently apply OIC guidelines, accurately measure program results, and effectively promote the program.
“TIGTA’s review found that the Internal Revenue Service has taken positive steps to improve and promote the offer in compromise program,” said TIGTA Inspector General J. Russell George in a statement. “Now, current backlogs in the program make it imperative that the IRS implement needed improvements.”
Read full article……..via IRS Overwhelmed by Requests for Offers in Compromise: Accounting Today. via IRS
Here is an easy read brief comparison of the usual small business entity structures……. reminder.. it is wise to consult with an attorney and a CPA before taking the plunge.
Excerpt…….For many small business owners choosing a C corp, S Corp, or Limited Liability Company (LLC) is the first step in incorporating. The above entity comparison table was designed as a helpful reference and is not intended as tax or legal advise. We do not provide tax or legal advice.
If you feel like you may need tax or legal advice it’s recommended that you contact an attorney or CPA.
Read table of comparisons here……via C Corporation vs S Corporation vs LLC. From the MoneyAlert