FROM THE TREASURER by Patia LaCour, RL

by: Martha Mills at 2/5/2018 7:06:09 AM | Viewed 519 times.

FROM THE TREASURER

Hypatia G. “Patia” Lacour, RL

 

Now that the holidays are over, it is time to start thinking of taxes! Hopefully by now you have reconciled your 2017 bank statements, credit card statements, sent your employees their W-2’s and your subcontractors their 1099’s (both of which were due by January 31 st ).

 

 The IRS has been looking closely at the Oil and Gas Industry for the classification of Independent Contractor, which they define in summary as 

 

“people such as doctors, … contractors, subcontractors, public stenographers, or auctioneers who are in an independent trade, business, or profession in which they offer their services to the general public” .. “However, whether these people are independent contractors or employees depends on the facts in each case. The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done. The earnings of a person who is working as an independent contractor are subject to Self-Employment Tax. If you are an independent contractor, you are self- employed.” “You are not an independent contractor if you perform services that can be controlled by an employer (what will be done and how it will be done). This applies even if you are given freedom of action. What matters is that the employer has the legal right to control the details of how the services are performed.”

 

With this basic summary of definition it is a good idea to create your own company if you consider yourself an “Independent Contractor”. To become a company you must first choose a business structure, the IRS recognizes the following business structures:

 

· Sole Proprietorship. The simplest structure is the sole proprietorship, which usually involves just one individual who owns and operates the enterprise. …

 

· Partnership. ...

 

· Corporation. ...

 

· S Corporation. ...

 

· Limited Liability Company.

 

Before deciding, take time to learn the differences and importance of each structure. It is a good idea to learn which forms are required and which income tax return form you will have to file. Small businesses (those businesses having fewer than 500 employees) are the backbone of our society. Having a small business comes with responsibility and frustration but it can also be rewarding and profitable. Take time to learn the advantages of purchasing items through your business which will be used in your business. Ex: cell phones, laptops, internet, etc. There are many day-to- day items that can considered a business “write-off” so be smart, learn what is tax deductible and what is not.

 

Sadly business owners depend on their CPA/Tax Advisor to “get them the best return” and have no idea what is behind the “numbers”. Keep in mind your CPA/Tax Advisor is only as good as the information you give them. Learn what to share, how to present it and what records you need to keep. A “prosperous” business can fail if the books are in dismay or if they don’t take tax time seriously.

 

Be Smart – Be Organized – You are in an honorable profession that requires fine detail. Give your business that same fine detail … and it will be rewarding in the end.

 

**Disclaimer: I am neither a CPA nor a Tax Advisor. I have been a bookkeeper for over 30 years and so many times I see how a good set of books makes a big difference.

 

 

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