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                                                                                                            May 2015

 

Brinkman & Company Newsletter 

Tax Tips From Brinkman & Company
Establish a Good Business Foundation


As National Small Business Week shines a spotlight on entrepreneurs, you may be considering establishing your own company. Here are tips to help your new venture get a good start.

* Choose the right form for your business. Sole proprietorship, partnership, corporation, or limited liability company: your decision will depend on questions such as how many owners the business will have, who will be in control of decision-making, and what liability issues exist.

* Set up a good recordkeeping system. A business launch means paperwork, including establishing a business bank account, filing for an employer identification number, acquiring a local occupational license, and maybe registering a fictitious name. In addition to these permanent records, you'll also need to track pre-launch costs and ongoing expenses for tax write-offs.

* Understand tax reporting requirements. Depending on how you structure your business, you may need to file a separate tax return each year. You might also need to make quarterly estimated tax payments. Other tax returns include federal and state forms for reporting sales and employment taxes.

Please call for advice before you open the doors of your new business. We'll work with your legal, banking, and other advisors to help you establish a good foundation for future success.  

Understand Your IRA Options

So you're ready to open an individual retirement account. But what type of IRA is best for you? Here's an overview to help you decide.

IRAs generally fit into two categories: Traditional and Roth. Both have an annual contribution limit. For 2015, the limit is the lesser of your taxable compensation or a set amount of $5,500 when you're under age 50 and $6,500 when you're age 50 or older.

With a traditional IRA, your contribution is typically deductible on your current tax return. You get the savings up front. In addition, you don't have to pay income tax on earnings in your account until you start taking withdrawals. You can benefit from this "tax-deferral" until you reach age 70?. At that point, you're required to begin withdrawing money from your account, or you'll have to pay a penalty.

When you contribute to a Roth, no deduction is available. However, withdrawals of contributions and earnings are tax-free. You get to decide when - or if - you'll take withdrawals. You're not penalized for leaving the money in your account no matter what your age.

Additional factors to consider include other sources of retirement income and your expected tax rate. Contact us if you would like more information.  

Brinkman & Company | 300 E Esplanade Dr. | Suite 1130 | Oxnard | CA 93036
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