Business On Moon

Before considering any type of business entity, you'll want to consider the pros and cons of each structure and what will work best for your business. One of the first questions that new business owners ask is this one: "How will my business be taxed?" For small business owners who choose to form an LLC structure, there are several options to consider.

Knowing the facts before considering the tax structure for your Limited Liability Company will keep you out of hot water. There are several options to consider. You may be taxed as a partnership or sole proprietorship, taxed as an S corporation, or taxed as a C corporation:

An LLC is usually taxed as a sole proprietorship or partnership. Under normal circumstances, the LLC is taxed as a partnership or sole proprietorship. In 1997, the IRS established federal default rules. The default rules say, if you have one owner, the LLC will be taxed as a disregarded entity, meaning all the profits and losses will show up on your personal tax return (if you are the owner). In this case there is no federal or state single member LLC that is disregarded for tax purposes.

If the LLC has two members, the default is to be taxed as a partnership. That means a 1065 is filed on April 15th federally each year. If you business is earning earned income all the profits are subject to self employment taxes in 2009 which is up to $106,800. If it is taxed as a partnership and one partner is not active (they work very few hours or are just passive) their distributions may not be subject to self employment taxes. Be sure to check with your CPA for exact input. For the one-owner LLC, you'll file a 1040 tax return and attach a Schedule C.

As a Limited Liability Company taxes as a partnership, you'll pay no federal income taxes when taxed in this manner. The LLC is often called a "pass through" entity. This means that each member (owner) of the LLC reports his or her share of the profits and losses on their individual tax returns, regardless of the number of members. LLCs with multiple members will report their individual profits and losses on Schedule C as well.

An owner may elect to S corporation tax status. Many LLC owners opt to elect S Corporation tax status because they can pay themselves a reasonable salary, tax that amount, and collect distributions from the company as surplus income. This often results in a substantial savings to the owners. First, the key is to file the federal 2553 certified to the IRS.

The EIN application is not enough to tell the IRS your entity is taxed as an S election. Plus you may have a home state form to file, make sure you check! For instance, an LLC owner that earns $60,000 and is taxed as a sole proprietorship will pay $9,180 in self-employment taxes ($60,000 X 15.3%=$9,180). If you elect an S Corporation tax status, you may choose to pay yourself a salary of $40,000 (a reasonable salary is required). That salary will be taxed at the same 15.3% rate, but you'll save $3060 in taxes. You can then pay the remaining $20,000 as a distribution from the company.

What happens when an LLC elects corporation (C corporation) tax status? If you decide to structure your LLC as a corporation, you will need to file form 8832 to the IRS. Plus you will need to amend or update the operating agreement to note the language about the C corporation election.

You will pay federal income taxes on the profits if the LLC is taxed as a C corporation. At first, this may not seem like good business sense, but if you plan to expand the business one day and would like to leave the profits in the business, you could save on taxes in the long run. To benefit from this structure, the LLC should be generating profits since the first $75,000 is taxed at a lower rate than a sole proprietorship or partnership.

Tax laws can be confusing. When you form an LLC, consult a tax professional to help you decided which tax structure will work best for you. Since tax laws change from year to year, don't leave your decision up to chance. What you don't know may significantly hurt your bottom line.

Scott Letourneau is the CEO of Fast Business Credit, Inc. and has a valuable free guide to help small business owners get access to capital plus a new program to help business owners understand the importance of credit! Go to our Business Credit Program page for powerful details!

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# posted by David @ 6:32 PM 0 Comments

There has always been a common agreement amongst business managers that one is either a leader or one is not. People have been very sniffy about the concept of training to become a better leader. These people will tell you that leaders are born and not trained. And whilst like in any rumour there is an element of truth there is a lot more to the issue than it would at first appear.

Whilst leaders often do need to have a certain level of natural aptitude toward leadership there are a wide number of different techniques that can be taught to anyone to improve the quality of their leadership. These techniques can be taught to anyone at any level of seniority in a business. Regardless of who you are you can learn skills that will improve your levels of leadership.

Leadership differs from management in that management deals with the day to day running of a business and how to get the most out of staff members and make an organisation efficient whereas leadership deals with having a person that can be followed and a person that can make decisions that will affect the direction of a business.

A leader will show the business the way and will generally be a influential character that people want to follow and work hard for. The management will usually be subtly different in that it involves a more practical application of techniques to make a business more efficient. It is widely understood that the skills required for management can be taught. The leadership skills on the other hand are slightly less tangible.

Building leaders in a business is an extremely important way of ensuring that the business becomes successful and strives to grow beyond its projections.

Leadership development can be a great way of improving the skills of a person in a leadership position. Leadership training tends to involve an enormous range of different activities that work to develop different areas of a person's ability to lead a team. The way in which these abilities are imparted to the people that are seeking development differs greatly. The courses can range from academic classroom lessons that teach about the theories behind leadership to outdoor courses that encourage people to get into the great outdoors and push themselves to achieve something that brings out the leadership qualities within them.

Much of the training that takes place works on the attitude of the person seeking leadership skills. Leadership is very much about having a good positive attitude and making correct businesses decisions. People inevitably value leaders that get results and making the right decisions will therefore eventually lead to an individual becoming respected in a business and staff members are as a result more likely to listen to what they say and follow their subsequent decisions.

Most leadership trainers recognise that there are a vast range of different leadership styles and that these styles are important to the individual leader. Losing track of these individual styles is not the purpose of the training and good providers will always avoid working on a 'one size fits all' method of training. This means that they will generally work with leaders individually and work to bespoke the training to the specific person that they are training. This means that people can receive training that specifically addresses their abilities and works on their specific leadership flaws.

Shaun Parker is a recognised business consultant. He really values the use of leadership training as a method of improving your business.

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# posted by David @ 10:25 AM 0 Comments

Everyone loves rags-to-riches stories, but few people have lived such lives. In addition to a desire to see others succeed, many people like to complain that they don't get any breaks . . . and use setbacks as an excuse for not having accomplished much. But are breaks really the basis of rags-to-riches success, or is it something else?

The punch line of most rags-to-riches stories is that it's what you do, not where you start out, that makes the difference. Let's look at a modern-day Andrew Carnegie to see what lessons we should draw for accomplishing more.

Dr. David Penn was abandoned in a hospital in Sydney, Australia by his refugee parents. His first fortunate break came when he was adopted as baby by a childless couple. His next set-back came when his adopted parents broke up: Dr. Penn was mostly raised by his determined Mum who struggled to earn enough to support him.

Wanting a better education for him, Dr. Penn was sent to a boarding school at 13 where he suffered from continual bullying and violence while mentally stagnating from the school's weak academic program. This set-back was a low point from which many teens don't recover.

Dr. Penn was adamant that he wanted to come home and finally persuaded his parents to free him after two years of misery and three break outs from the school. Thrown into a new sink-or-swim school, he thrived thanks to a new friendship with a nice teenage girl.

He started university studies at 17 and quickly found that he had entrepreneurial instincts. He earned a good living from providing part-time tutoring to high-school students and sponsoring a lucrative football betting game at the university. Profits were so good that he hired someone to do his laundry for him, much to his Mum's dismay.

Buying a dental practice after graduation, Dr. Penn was soon so successful that he bought a second practice and had both completely booked by the time he was 27. Seeking new challenges, he later started a dental laboratory in Hong Kong to make dental prostheses. That business has grown over the last 25 years into a global industry leader.

Through the dental laboratory, Dr. Penn found ways to improve the practice of dentistry, providing better materials and prostheses while educating dentists on how to be more successful using these improved resources. The business did so well that he characterized its business model as being as near perfect as a business model can be.

But he was restless and wanted to do more: He started and ran three more successful companies. But those accomplishments still weren't enough.

Where does a man who is so successful go to find new challenges? In Dr. Penn's case, his next stop was to study for an online MBA at Rushmore University.

Why? He wanted to examine what he had been doing in business from a new perspective and thought that the individual tutoring by the world-famous professors at Rushmore could help.

Because he had been asked by another university to develop an MBA program for dentists, Dr. Penn made that one of his topics for earning an online MBA; and he created an MBA curriculum and model unit on ethics for dentists. The program was designed to build on the best of what well-known universities were doing and his experiences with individual tutoring at Rushmore.

Dr. Penn found from his studies that experientially directed learning (working on practical problems to learn business principles) energized and informed him in ways that he did not realize could be done through academic studies. He pointed to David Kolb's book, Experiential Learning, to characterize how the experienced person can make large gains in gaining and applying new knowledge:

1. Perceive new information.
2. Reflect on how the new information can impact some area of life.
3. Compare the new information to your experiences.
4. Think about how the new information could provide better ways to act.

After gaining his MBA, what did Dr. Penn have to say about the educational experience in terms of the four-step model?

"Was the course worthwhile and would I do it again? Absolutely! Upon reflection, the most difficult aspect was defining the course and ensuring that the tasks were worthwhile and challenging. I set myself an enormous performance gap to bridge but emerged at the end with an achievement that has altered my thought processes forever."

Since graduating, Dr. Penn expanded his dental laboratory by integrating a new product line from another company. This experience was so exciting and successful that he has been thinking about studying for a DBA (Doctor of Business Administration) degree to consider and expand on his post-MBA work.

What challenges will entice Dr. Penn next? It's hard to tell, but they are bound to be large ones. Now that he appreciates how education can accelerate his success, the sky is clearly the limit for him.

How can you refocus your talents and experience to accomplish more? Perhaps you should start using Dr. Penn's four steps to help you. Rather than thinking it's all about breaks, start looking for ways you can perceive new knowledge. And follow on from there as he did.

Donald W. Mitchell is a professor at Rushmore University. For more information about ways to engage in fruitful lifelong learning at Rushmore to increase your success, visit

http://www.rushmore.edu .

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# posted by David @ 10:19 AM 0 Comments