Frequently Asked Questions

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Standard mileage rates have increased to 70 cents per mile for business use of a personal vehicle. 

As soon as you start to think about starting a business, you should meet with an accounting professional who can help you take the next steps. You can discuss your business's organization, bookkeeping, taxes, payroll and operations, along with target pricing and profit margins.  

Does your accountant return your calls? Do you feel comfortable asking them a question? Do you feel heard? With the right accounting professional, the answers should be a resounding "Yes!"

Here are the top 5 reasons people change accountants.

1. My accountant only meets with me at tax time. By then it's too late to make changes that will improve my tax return.
2. I don't think my accountant understands, or even cares about, my business.
3. My accountant is too hard to reach.
4. My accountant doesn't provide the type of help I had hoped for.
5. My accountant's fees are too high for the service I'm being provided.

First you can check out the IRS resources to get a good overview. Next talk to an accounting firm that has helped start many businesses. We recommend you talk to Compass Accounting Group.

Get some impartial advice from an accountant before you consult a bank or investors. Put a meaningful business plan together that gives the lender/investor confidence that your business idea is worth the risk. 

Check out what the IRS has to say about starting a business. Keep in mind, many small businesses are setup as an LLC because of the cost of doing payroll. If your business has net profits that exceed $15,000 per year, you could be paying too much in taxes. 

 To be considered an independent contractor and not an employee subject to payroll, an individual must meet and maintain all nine of the following requirements (original Government documentation):

1. Maintain a separate business
2. Obtain a Federal Employer Identification Number or has filed business or self-employment income tax returns with the IRS based on the work or service in the previous year.
3. Operate under specific contracts
4. Be responsible for operating expenses under the contract
5. Be responsible for satisfactory performance of the work under the contracts
6. Be paid per contract, per job, by commission or by competitive bid
7. Be subject to profit or loss in performing the work under the contracts
8. Have recurring business liabilities and obligations
9. Be in a position to succeed or fail if business expenses exceed income

Only certain employees can be exempt from overtime and minimum wage. The U.S. Department of Labor has issued a Fact Sheet.

Avoid problems in calculating and tracking shareholders' basis.