In the excitement of running a startup venture, entrepreneurs can get caught up with the more rewarding aspects of the business and end up forgetting about the less glorious but equally important elements such as tax planning.
Many business owners, for example, do not realize the need to differentiate between personal and business use of tax-deductible items. There is no shortage of daunting tax laws that intimidate and confuse small business owners.
"Some budding businesspeople don't realize they may have to file a tax return, even if they've not yet made a penny in revenue or even started formal operations," writes Cyndia Zwahlen in the Los Angeles Times. "For example, if a startup registers as a limited liability company in California, a state income tax return will need to be filed along with an $800 payment."
Of course, the web of tax and financial regulations in California and many other states can be difficult to navigate, especially within the early stages of business development. The trick is to remain level-headed and research all relevant tax obligations and liabilities.
To help startups stay focused on their business operations, government agencies offer guides and resources to local and federal tax laws. The IRS offers informational material specifically for small business owners on their website, as does the California Franchise Tax Board.
Tags : annual filings, ca, create an llc, taxes
Posted: Nov 8th, 2010