The Tax Cuts and Jobs Act, otherwise known as the tax reform bill includes some provisions which should prove beneficial to pass-through business owners. For those unfamiliar with the concept of pass-through businesses, they are the most common form of business ownership in the United States, particularly when it comes to small businesses. Pass-through entities include limited liability companies, partnerships, S corporations and sole proprietorships.
In the words of Benjamin Franklin, "an ounce of prevention is worth a pound of cure." Few places is that more evident than in the field of law, where taking proper measures to protect one's interests preeminently can ward off potentially messy situations down the road. Specifically, businesses that spend the time and resources to properly protect their interests before problems arise can limit their exposure to liabilities and lawsuits in the future.
Overtime protections were first put into place by the Fair Labor Standards Act of 1938, and established the general standard that workers be paid time-and-a-half for any hours worked over 40 hours in a week. In general, all hourly employees are guaranteed overtime, and salaried employees are presumed to have the same guarantee unless they both: (1) make more than a salary threshold set by the Department of Labor, and (2) pass a test demonstrating that they primarily perform executive, administrative, or professional duties.
The prospect of hiring workers, while exciting, can be intimidating to new business owners, Employment law can be a confusing and time-consuming minefield, and the consequences of making a mistake can range from costly to financially devastating. Generally, employers must consider a number of new responsibilities, including withholding income taxes, paying Social Security and Medicare taxes,unemployment tax and insurance not to mention the bevy of registration and compliance requirements at the local, state and federal level.
The licenses and permits you will need to operate your business vary widely depending on your location and type of business. However, there are a few items that will be necessary for nearly all new businesses.
In Illinois, individuals have a unique option for holding title to real estate not otherwise available to individuals in the vast majority of other states. The Illinois Land Trust is a creation of common law, though now is governed by a number of Illinois statutes. While less common these days than it has been at times in the past, Illinois Land Trusts can be effective estate planning tools in certain situations.
A general partnership is the simplest form of business organization involving more than one person and it is widely used today by a variety of businesses. Formation of a general partnership is easy. All that is needed is an agreement-whether written or oral, or even a handshake- that two or more individuals will carry on business for profit. Of course, a general partnership can be formed by written agreement which then governs the relationship of the partners.
New business owners typically need to find a commercial space out of which to run their company. In today’s economy, there is no shortage of options, especially in Midwest cities hit particularly hard by the downturn (I’m looking at you Milwaukee). But, finding the space best suited for the new business is just the beginning. Once a space is found, it will be necessary to sign a lease for the space, and this is where any new business owner needs to pay close attention to what he is and is not agreeing to.
As a new business owner you have myriad things to worry about, but perhaps none cause more headaches than taxes. From itemized deductions to self-employment tax, to payroll taxes for those small businesses with employees, issues of taxation are commonplace and worries can be a plenty. But, there is perhaps one tax issue that has a tendency to catch even the most financially-inclined new business owner by surprise- estimated taxes.