Anthony Sykes & Company

                 Starting a business is hard work and can be expensive. Some of these costs can be deducted over time and recovered by the business. This can be done over a period of 15 years after the business is active, but it does not apply to every expense.           A qualifying start-up cost must be paid before the business is active. It must also be related to the field the business operates in. It can include advertisements for opening the business, travel costs related to securing suppliers and customers, and fees for consultants and other professional services. Costs related to investigating whether to purchase another business can also be deducted.           Not all costs qualify. Interest, taxes, and costs for experiments do not qualify for deduction. The actual purchase of another business cannot be deducted from federal taxes. The...

          The topic that has received the most attention on our blog has been The Tax Cuts and Jobs Act. This is more than justified considering its wide scope, and the changes it has made to the tax code. With so many adjustments, we are going to highlight a few areas that might be of special interest.           Divorce. Going forward, those who pay alimony and have a divorce decree dated after December 31, 2018 will no longer be able to deduct the payment. The former spouse who receives the payments must now pay taxes on that income.           State and Local Taxes. Many taxpayers in the past would itemize their return and deduct their SALT from Federal Tax responsibilities. Now that it only possible up to $10,000.           Qualified Business Income. This would be business income that can be called “pass through...

        The Tax Cuts and Jobs Act is known for its lowering of certain tax rates. That fact is made clear in its name. However, some of these benefits are not as easy to take advantage of. That is why there is a provision called Section 199A. This has been added to allow as may businesses as possible to have a sizable deduction of “qualified business income”. What type of income is this? How do you know that the “reputation or skill” of your business will allow you to qualify? Recent IRS guidance has shed some light on this topic.           The reputation and skill clause will only be used to describe a unique set of business circumstances. For example, if a business or taxpayer was receiving income from the use of a name, image, or appearance fee. This will apply to actors, singers, and others in the performing arts industry. This same guidance has stated that brokerage services, including real estate and insurance,...

        The Tax Cuts and Job Act has made people in all areas of life stop and evaluate their financial situation. This is especially true of small business owners. This shake-up of the tax code has led to some potential opportunities. You may be familiar with the new 21% top tax rate for business and “pass-through entities” that can qualify for a 20% deduction on income going through the business. But do you know how those businesses can qualify for these benefits?          There are specific guidelines to meet, and it often involves changing incorporation status. The IRS has just released new guidelines which have adjusted this process. Now is the time to take an honest look at your business to see if it would be the right choice for you. At Anthony Sykes & Company , we will give you a free consultation to help you make the best decisions for your business.

    When choosing to start their own business, the owner’s personality will certainly play a role in the process. We all have our own innate strengths and weaknesses. These aspects of our personality will allow the business owner to meet and easily care for certain challenges that will come up. However, there will always be times when our limitations become clear and help is needed. When this happens, what is the best way to move forward?     Small businesses that specialize in Software Development can find themselves in this kind of situation. A group of less than 20 hardworking software developers can rival any big firm. They can work together quickly, on their own or in teams, to provide the tools their client’s needs. But, their main focus will always be creating software. In a Small Business there must be management, tracking of cash-flow from month-to-month, estimation of costs, and financial goals to reach for. Software Developers are usually true special...

Every business has to take its own path to success. This course is often affected by the industry and simply the type of business it is. They are unique, and therefore cannot be treated the same. This is true of businesses in the field of architecture. This industry literally touches every aspect of daily living. However, when it comes to the area of finance, these firms must look at it in a different way in order to stay competitive. In order for small architectural firms to be able to compete with large businesses, they must focus on their craft. It is unreasonable to take away one of the employees from a renovation or new build design, to focus on taxes or cash flow. This is a recipe for disaster. If mistakes are made, fines and penalties can put the future of the company in doubt. Missing potential deductions will increase a burden and keep the company from reaching its full potential. For these reasons, small architectural firms benefit greatly from making use of the service...

         Each business venture is special when you consider the challenges that can come up, and the decisions that need to be faced. There are many factors that must be considered. Getting a clear look at the type of business and industry will allow for the best perspective. Sometimes, there are there are industries that have consistent opportunities for growth. We will take a look and see how this is true of the Trucking industry.           The lifeblood of every economy is the ability to ship goods from one place to another. Trucking has been, and will continue to be, at the center of the US economy. Considering the current emphasis being put on domestic goods, the Trucking industry is poised to be at the center of a financial gold mine. This might make taking the risk and becoming an Owner-Operator in the Trucking field worthwhile. With that said, there is no substitute for experience. It might look like a gr...

         Another option when making the decision to incorporate is to choose to create a Limited Liability Corporation ( LLC ). In this situation, the owners become members and having many of the same benefits that an S-Corp or C-Corp would have. In addition, there is the flexibility of applying the profits and losses to individual members. That tax information would then be put on the individual Tax Return. There are typically no ownership restrictions, and management structuring is not as rigid.           However, there are still continual requirement that must be met each year to keep the LLC legal. This would include annual reports and fees. Some research must be done at the state level first to make sure that an LLC is allowable. This can be a good choice depending on your circumstance. Our Incorporation Services can show you the facts and help you make an informed choice.

Each business has its own unique set of challenges to face, and decisions to be made. There are many factors that need to be considered. The type of business and industry that it is in will play a key role in getting a clear understanding of things. Other times, the right set of circumstances may come into play and make what seems to be an ideal situation. We will take a look at how this is true of the Manufacturing industry. The recent Tax Cuts and Jobs Act has made changes that will directly affect Manufacturing industry businesses. For example, Tax Reform has made it possible to deduct the full cost of property bought and used, as long as it is done so before 2023. This provision will be reduced by 20% each year afterward and then expire by 2027. Incorporated manufacturers will see a lower Tax Rate as well. There are certainly some immediate benefits to being a manufacturer in the times we are living in! However there are some drawbacks to consider. Owners of what can be called...

          There are many similarities between an S Corp and C Corp. They are both separate legal entities and have a similar internal structure. The limited liability protection basically keeps the owner or owners safe from personal responsibility for debts. They both are legally required to follow the same yearly requirements regarding bylaws, statements of information, and paying fees. However there are some very distinct differences that must be clearly understood.           The largest difference revolves around taxation. C corporations are their own entities and file taxes at the corporate level. An S corporation is considered a pass-through entity. This means that all profit or loss goes through the business and is reported on the owners’ personal Tax Return. The owners’ will pay the tax on their level. There is a limit of 100 shareholders in an S corporation and they must all be US citizens. In this way, S ...

          Every business has unique challenges to face, and choices that need to be made. There are many factors to consider. The location may need to be taken into consideration. The type of business, and the industry it is in, will play a big part in clearly understanding what decisions need to be made. We will take a look at restaurants to highlight how this is true.           Each restaurant will need to consider recurring costs for food products, payroll, rent, and utilities. Marketing is also an expense that must be considered since every business owner wants a profitable business. With that understood, there is a trend that has been growing in some areas that attempts to streamline expenses for restaurants. This is the idea of a “cash-free system”.           Having a restaurant that only deals with credit or debit cards might seem attractive. Paying would be ...

         One option when it comes to incorporating a business is creating a C Corporation. They are the most type of corporation. It allows for deducting employee benefits and is often very attractive to investors looking to fund a business. There are options that allow for many owners and different types of stock options. This type of business can outlive its owner and offers a tax savings to those who are self-employed, since they are considered employees of the company.           In order to qualify for this type of incorporation, Articles of Incorporation must be filed stating such a goal. The C Corporation must immediately adopt bylaws, hold a meeting of directors and shareholders, and issue stock. The Statement of Information must be updated annually . This will state the company’s activities over the last year. It will include accounting policies, cash flow statements, and an Auditor’s report. The meetin...

         Most corporations provide a service for a price, and use that revenue to stay in business and keep a profit. This is certainly basic information. They have limited liability protection, meaning that directors and officers are not usually responsible for debts or liabilities of the company. This description applies almost every corporation in the marketplace today. However, there are certain organizations that have a different aim. They may have an educational, charitable, scientific, or religious purpose. In this case, they would state their directive in their Articles of Incorporation . This will define what the corporation is to the state and the IRS. This is simply the first step in creating a Non-Profit and the requirements are different in each state. It is a more complicated process and a Tax Professional will make it easier if they are there from the beginning. But, if this is the area you want to have a corporation in, the work will be well...

      To incorporate is the process of constituting a company or other organization as a legal corporation. It changes a sole proprietorship or general partnership into a formal company. It will from that point on be legally set apart from those who started the business. The best reason for deciding to take this step is to limit personal liability. An owner is responsible for all debts and losses, but when incorporated, usually personal assets that have not been invested in the company are protected.         If one decides to take this step, there are many more decisions to make. There are a variety of incorporation types to choose from. They each have their advantages and should be chosen carefully. It will have lasting consequences and cannot be easily changed. Our next few posts will discuss these choices to highlight the differences.