The IRS

A not so fun fact: as a business owner you need to pay taxes. When you have your affairs in order from the start, you prevent possible additional taxes and fines. Which taxes you need to pay as a business owner and which deductions can you use?

Chamber of Commerce registration

When your business is registrated with the chamber of commerce, you are automatically in the picture with the IRS. The IRS will check whether you are obligated to pay taxes. But when does the IRS see you as a entrepreneur? The most important criteria is that you work at least 1225 hours a year for the business.

Tax deduction for starting business owners

There are a few more criteria. Such as your turnover, the number of customers, and visibility of your business. When the IRS acknowledges you as an entrepreneur, you will have the right to deductions, such as entrepreneurial deduction. This will cause you to pay less taxes. It is of the essence to keep these matters up to date. A lot of business owners used to do this by them self. Nowadays you can use bookkeeping programmes. This will save you a lot of time. adFidem will help you in the right direction.

Does the IRS recognize me as an entrepreneur?

You need to answer the questions below, so the IRS can determine whether you are an entrepreneur. On the Chamber of Commerce website you can find more information about this topic.

  • Do you have a profit? And how much?
  • How independent is your business?
  • Do you have enough capital to start your business?
  • Do you put enough time and effort into your business?
  • How many clients/customers do you have?
  • Do you promote your company?
  • Do you have entrepreneurial risks?
  • Are you accountable for any debt your business might have?

 

Do you have any taks related questions?
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We hope to have provided you with a good clarification of tax related affairs.
We would also like to tell you more about other affairs that are essential to starting business owners. Such as advice about:

 InsurancesFinance Real estateLegal adviceBookkeeping