Tag: taxes

Small Business Owner’s Tax Obligations

Small Business Owner’s Tax Obligations

Posted on by Daron Stenvold

A small business owner who owns and operates his or her own business, whether it is a sole proprietorship or a partnership, may be called a self-employed individual. In most states, the tax laws for self-employment are different from those of other forms of employment.

Income Taxes

Most states do not have income taxes on self-employment earnings, but they do have payroll taxes and self-employment taxes. These taxes can vary from state to state.

Self-employment taxes

Self-employment taxes are usually paid by the business owner through quarterly estimated payments, but these payments are often late or non-existent. This can lead to penalties and interest being charged against the business. The self-employment tax rates vary from state to state. For example, in California, the rate is 7.25%, while in Georgia, the rate is 8%.

The self-employment tax rate is not paid until the end of the year when the tax return is filed with the IRS. If the tax rate is not paid, the self-employed individual will have to pay penalties and interest charges for the unpaid portion of the tax.

Social Security tax

In addition to the self-employment tax, there is also an additional Social Security tax which is calculated based on the number of employees that the business has. This tax is paid at a flat rate of 12.4% for the first $106,800 of wages and salaries paid to employees. There is no limit to the number of employees that can be employed, but the tax rate will increase to 15.3% if the wages exceed $250,000 per year.

If you are a small business owner, you should make sure that you are aware of all the tax issues related to your business. You should seek out professional advice from a tax attorney who specializes in this area. He or she can help you determine what your tax obligations are and how best to meet them.

If you would like to see what small incremental changes can do for your business, be sure to check out our free Simulator at https://impelonline.com/sim.

How to Calculate Your Business’s Profitability

How to Calculate Your Business’s Profitability

Posted on by Daron Stenvold

There are many reasons why you should be concerned about your business’s profitability. For example, if you’re a small business owner who has only been in business for a few months, you might not have a lot of cash reserves to rely on in case something goes wrong. Or perhaps you have a small business that is struggling to stay afloat. In either case, it’s important to understand how to calculate your business’s profitability.

Calculating Your Profits

Profits are defined as revenues minus expenses. In order to calculate your profits, you need to know both your revenue and your expenses. Revenue can be calculated by adding up all of your sales from your products or services. Expenses can be calculated by subtracting all of your costs associated with running your business. So, if you have $5,000 in sales and $3,000 in expenses, your profit would be $2,000. If you’re wondering how much money you’ll make after taxes, add your tax rate to your profits. For example, if your tax rate is 25%, your profit would be $1,250.

It’s also important to note that your business’s profitability will vary based on its size. If you run a large business, your profit may be lower because your expenses are higher. However, if you run a smaller business, your profits may be higher because your expenses are lower.

Why Are Profits More Important Than Revenues?

When you’re calculating your business’s profitability, you want to focus on the bottom line. That’s because this number represents the amount of money that your business makes per month. As such, you should always be looking to increase your profitability. This means making sure that you’re selling enough products or services to cover your expenses. It also means minimizing your expenses so that you’re not spending too much money.

Why Are Profitability So Important?

If you own a small business, it’s very likely that you’re going to need some form of outside funding. You might need to borrow money from a bank or an investor. Either way, you’re going to have to show them that your business is profitable. Otherwise, they won’t loan you any money.

So, when you’re trying to convince someone to invest in your business, you should focus on showing them how profitable your business is. If you have a profitable business, you’ll have a better chance of convincing them to invest in your company.

If you would like to see what small incremental changes can do for your business, be sure to check out our free Simulator at https://impelonline.com/sim.

Do You Have Enough Cash Flow?

Do You Have Enough Cash Flow?

Posted on by Daron Stenvold

Cash IS King

You’ve probably heard the saying “Cash is King.” It’s true. You have to be able to pay your bills and expenses, and it’s also true that you need to have some cash reserves for emergencies. But the main reason you should be concerned with your business’s cash flow is because it affects your business’s long term health. If you’re not making money right now, then you’re going to have problems paying your bills and making payroll in the future.

What should I do?

Many businesses are started with the idea of creating a steady income stream. That’s great, but if you can’t generate enough revenue to cover all of your expenses, then you won’t make any money. The bottom line is that if you don’t have enough money coming in, then you can’t afford to buy things like new equipment, pay for advertising, or hire employees. If you’re not making enough money right now, then you need to figure out why.

Here are some questions to ask yourself:

* Is there a problem with your products or services?

* Are you undercharging for your product or service?

* Do you need to change your pricing strategy?

* Have you priced yourself too high?

* Do you need better advertising?

* Are you spending too much time doing administrative tasks?

* Are you selling your services or products at the wrong price?

* Do you need more sales people?

* Are you spending enough on marketing?

* Are you spending more than you should on advertising?

* Are you getting enough customers?

* Are you spending money on the wrong things?

* Are you not charging enough for your product or service?

If you answered yes to any of these questions, then you may need to look at how you’re doing business. You may need to rethink your business model and determine whether you need to spend more money to get more customers. If you need to do more advertising, then you’ll need to find more ways to promote your business.

Conclusion

When you think about it, you don’t want to be a small business owner who doesn’t have enough money to pay his bills. It’s a scary situation. If you’re not making the money you need, then you’re going to end up in trouble. So before you start spending money on things that aren’t necessary, make sure that you’re not just throwing good money after bad.

If you would like to see what small incremental changes can do for your business, be sure to check out our free Simulator at https://impelonline.com/sim.