Recordkeeping is an important part of running a small business. In fact, keeping good records helps business owners make sure their business stays successful.
Here are some things small business owners should remember about recordkeeping:

• Good records will help business owners:
  • Monitor the progress of their business
  • Prepare financial statements
  • Identify income sources
  • Keep track of expenses
  • Prepare tax returns and support items reported on tax returns
• Small business owners may choose any recordkeeping system that fits their business. They should choose one that clearly shows income and expenses. Except in a few cases, the law does not require special kinds of records.
• How long an owner should keep a document depends on several factors. These factors include the action, expense and event recorded in the document. The IRS generally suggests taxpayers keep records for three years.
• A good recordkeeping system includes a summary of all business transactions. Businesses usually record these transactions in books called journals and ledgers, which business owners can buy at an office supply store, or keep them electronically. All requirements that apply to hard copy books and records also apply to electronic business records.
• The responsibility to validate information on tax returns is known as the burden of proof. Small business owners must be able to prove expenses to deduct them.
• Business owners should keep all records of employment taxes for at least four years.
• Businesses that keep paper records should keep them in a secure location, preferably under lock and key, such as a desk drawer or a safe. 
• Businesses that keep records electronically on a computer should always have an electronic back-up, in case the hard drive crashes.

Tax treatment for family members working in the family business
One of the advantages of someone running their own business is hiring family members. But when including family members in business operations, certain tax treatments and employment tax rules apply. Here are some facts to know when working with a spouse, parent or child.

Both spouses carrying on the trade or business
If spouses carry on a business together and share in the profits and losses, they may be partners whether or not they have a formal partnership agreement. If so, they should report income or loss from the business on Form 1065. They should not report the income on a Schedule C (Form 1040) in the name of one spouse as a sole proprietor. But, the spouses can elect not to treat the joint venture as a partnership by making a qualified joint venture election. 

Qualified joint venture
Spouses may elect treatment as a qualified joint venture instead of a partnership. A qualified joint venture conducts a trade or business where:

• The only members are a married couple who file a joint return,
• Both spouses materially participate in the trade or business, and
• Both spouses elect not to be treated as a partnership.

Only businesses owned and operated by spouses as co-owners and not in the name of a state law entity, such as a limited partnership or limited liability company, are eligible for the qualified joint venture election. Find more information on joint ventures in Publication 541, Partnerships.
Spouses electing qualified joint venture status are sole proprietors for federal tax purposes. Each spouse must file a separate Schedule C to report their share of profits and losses. They don’t need an EIN unless their sole proprietorship must file excise, employment, alcohol, tobacco or firearms returns. One spouse cannot continue to use the partnership’s Employer Identification Number (EIN) for the qualified joint venture. The EIN must stay with the partnership; it’s used by the partnership for any year in which the business doesn’t meet qualified joint venture requirements.

Employment taxes
If the business has employees, either of the spouses as sole proprietors may report and pay the employment taxes. The spouse, as an employer, must have an EIN for their sole proprietorship. If the business filed or paid employment taxes for part of the year under the partnership's EIN, the spouse may be considered the employee’s “successor employer” for purposes of figuring whether wages reached the Social Security and federal unemployment wage base limits.
 
One spouse employed by another. The wages for the services of an individual who works for their spouse are subject to income tax withholding and Social Security and Medicare taxes but not to the Federal Unemployment Tax Act (FUTA).

Child employed by parents. Payments for the services of a child under age 18 aren’t subject to Social Security and Medicare taxes, if the business is a sole proprietorship or a partnership in which each partner is a parent of the child. Payments to a child under age 21 aren’t subject to FUTA. Payments are subject to income tax withholding, regardless of the child’s age.
Payments for the services of a child are subject to income tax withholding as well as Social Security, Medicare and FUTA taxes if they work for:

• A corporation, even if it’s controlled by the child's parent, or
• A partnership, even if the child's parent is a partner, unless each partner is a parent of the child.

Parent employed by child. The wages for the services of a parent employed by their child are subject to income tax withholding and Social Security and Medicare taxes. They’re not subject to FUTA tax.
Employees complete Form W-4 so that their employer can withhold the correct federal income tax from their pay. The IRS encourages everyone to use the Tax Withholding Estimator to help them make sure they have the right amount of tax withheld from their paycheck. The estimator automatically links to Form W-4, Employee’s Withholding Allowance Certificate, which they can then fill out and submit to their employer.

These tax tips can help new business owners find success
Starting a business can be very rewarding. It can also be a little overwhelming. From business plans to market strategies, and even tax responsibilities…there are many things to consider. Here’s what new business owners can do to help get off to a good start.

• Choose a business structure. The form of business determines which income tax return a business taxpayer needs to file. The most common business structures are:
  • Sole proprietorship: An unincorporated business owned by an individual. There’s no distinction between the taxpayer and their business.
  • Partnership: An unincorporated business with ownership shared between two or more people.
  • Corporation: Also known as a C corporation. It’s a separate entity owned by shareholders.
  • S Corporation: A corporation that elects to pass corporate income, losses, deductions, and credits through to the shareholders.
  • Limited Liability Company: A business structure allowed by state statute.
• Choose a tax year. A tax year is an annual accounting period for keeping records and reporting income and expenses. A new business owner must choose either:
  • Calendar year: 12 consecutive months beginning January 1 and ending December 31.
  • Fiscal year: 12 consecutive months ending on the last day of any month except December.
• Apply for an employer identification number. An EIN is also called a federal tax identification number. It’s used to identify a business. Most businesses need an EIN.
• Have all employees complete these forms:
  • Form I-9, Employment Eligibility Verification
  • Form W-4, Employee’s Withholding Allowance Certificate
• Pay business taxes. The form of business determines what taxes must be paid and how to pay them.

Taxpayers interested in starting a business can find information for some industries on the Industries/Professions Tax Centers webpage. Each state has additional requirements for starting and operating a business. Prospective business owners should visit their state's website for info about state requirements.

More information:

• Small Business Admiration’s 10 steps to start your business.

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Direct from the Small Business Administration Website, 10 Steps to starting your business. Even if you have started you business, this is a great review to make sure your ducks are in a row.

1. Conduct market research
Market research will tell you if there’s an opportunity to turn your idea into a successful business. It’s a way to gather information about potential customers and businesses already operating in your area. Use that information to find a competitive advantage for your business.
Learn more

2. Write your business plan
Your business plan is the foundation of your business. It’s a roadmap for how to structure, run, and grow your new business. You’ll use it to convince people that working with you — or investing in your company — is a smart choice.
Learn more

3. Fund your business
Your business plan will help you figure out how much money you’ll need to start your business. If you don’t have that amount on hand, you’ll need to either raise or borrow the capital. Fortunately, there are more ways than ever to find the capital you need.
Learn more

4. Pick your business location
Your business location is one of the most important decisions you’ll make. Whether you’re setting up a brick-and-mortar business or launching an online store, the choices you make could affect your taxes, legal requirements, and revenue.
Learn more

5. Choose a business structure
The legal structure you choose for your business will impact your business registration requirements, how much you pay in taxes, and your personal liability.
Learn more

6. Choose your business name
It’s not easy to pick the perfect name. You’ll want one that reflects your brand and captures your spirit. You’ll also want to make sure your business name isn’t already being used by someone else.
Learn more

7. Register your business
Once you’ve picked the perfect business name, it’s time to make it legal and protect your brand. If you’re doing business under a name different than your own, you’ll need to register with the federal government, and maybe your state government, too.
Learn more

8. Get federal and state tax IDs
You’ll use your employer identification number (EIN) for important steps to start and grow your business, like opening a bank account and paying taxes. It’s like a social security number for your business. Some — but not all — states require you to get a tax ID as well.
Learn more

9. Apply for licenses and permits
Keep your business running smoothly by staying legally compliant. The licenses and permits you need for your business will vary by industry, state, location, and other factors.
Learn more

10. Open a business bank account
A small business checking account can help you handle legal, tax, and day-to-day issues. The good news is it’s easy to set one up if you have the right registrations and paperwork ready.
Learn More
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​Please remember that GLM can help you through each steps of the process. Your accountant can and should guide you through this and help you set yourself up in each step that benefits you the most.

Thursday, July 18, 2019    10am- Noon

​If you're brand new to QuickBooks or a novice, then it is a perfect class for you. If you've been using QuickBooks for less than 2 years, you'll most certainly learn lots of interesting tips, tricks, and workarounds to help you be more effective. This class is perfectly suited for business owners, spouses of business owners, office receptionists, secretaries, office managers, sales and administrative professionals, bookkeepers and anyone who uses QuickBooks as part of their business.

You don't need any prior experience in QuickBooks or accounting. This is designed for people who are trying to decide if QuickBooks are for them and their business, people new to QuickBooks or have been using it for a short period of time. You don't need a computer as this class is not hands on. We've learned that people are able to learn so much more when they're focused on listening to the instructor.
​
The workshop will be held in the conference room in the Lower Level of our building:

300 N. Martingale Rd.,
Lower Level Room 80
Schaumburg, IL 60173
​
If you don't own a copy or subscription, no problem. Learn if it is right for your business and if it is, you can buy at half price though GLM.

Thursday, July 18, 2019    10am- Noon

​If you're brand new to QuickBooks or a novice, then it is a perfect class for you. If you've been using QuickBooks for less than 2 years, you'll most certainly learn lots of interesting tips, tricks, and workarounds to help you be more effective. This class is perfectly suited for business owners, spouses of business owners, office receptionists, secretaries, office managers, sales and administrative professionals, bookkeepers and anyone who uses QuickBooks as part of their business.

You don't need any prior experience in QuickBooks or accounting. This is designed for people who are trying to decide if QuickBooks are for them and their business, people new to QuickBooks or have been using it for a short period of time. You don't need a computer as this class is not hands on. We've learned that people are able to learn so much more when they're focused on listening to the instructor.
​
The workshop will be held in the conference room in the Lower Level of our building:

300 N. Martingale Rd.,
Lower Level Room 80
Schaumburg, IL 60173
​
If you don't own a copy or subscription, no problem. Learn if it is right for your business and if it is, you can buy at half price though GLM.

Any business that has been in business for more than 2 years with 25 or more employees in Illinois will need to facilitate the Illinois Secure Choice program for its employees. Illinois is in the process of considering appropriate enforcement actions should such actions be needed to enforce the mandate. 

Unless –
An employer-sponsored retirement plan includes a plan qualified under Internal Revenue Code sections 401(a) (including a 401(k) plan), qualified annuity plan under section 403(a), tax-sheltered annuity plan under section 403(b), Simplified Employee Pension plan under section 408(k), a SIMPLE IRA plan under section 408(p) or governmental deferred compensation plan under section 457(b). It does not include payroll deduction IRAs.
 
Employers with fewer than 25 employees are exempt and do not need to participate in the Program.
“Employee” means any individual who is 18 years of age or older, is employed by an Employer, and who has Wages that are allocable to Illinois during a calendar year under the provisions of Section 304(a) (2)(B) of the Illinois Income Tax Act. An Employee includes both part-time and full-time employees.
“Employer” means a person or entity engaged in a business, industry, profession, trade, or other enterprise in Illinois, whether for profit or not for profit, that (i) has at no time during the previous calendar year employed fewer than 25 employees in Illinois, (ii) has been in business at least 2 y

• An employer employing 100 to 499 employees: 7/1/2019
• An employer employing 25 to 99 employees: 11/1/2019

 
Automatic enrollment means that following notification, employers will enroll eligible employees in Illinois Secure Choice unless employees have elected to opt out of the program. It is a Roth IRA and The default savings rate is 5% of gross pay
 
There are no employer fees, and employers are not required to contribute to the program.
 
There is an ongoing fee which is paid as a percent of your assets under management. This fee for each investment option is approximately 0.75% of assets per year ($0.75 for every $100 saved), and it pays for the administration of the program as well as the operating expenses charged by the underlying investment funds in which the program’s portfolios are invested. The fee is computed daily and netted from the assets in an investment option. Investment returns are credited to saver accounts ‘net of’ this cost.

The standard account option for savers will be a Roth IRA. The income limits for Roth IRA savers are set by the federal government. For 2019, the limits are $137,000 for a single tax filer and $203,000 for married taxpayers filing jointly. Beginning in 2019, Illinois Secure Choice will offer a traditional IRA account as an electable choice.

GLM can help get you set up. There are ways you can do it and not have to learn any new software, or learn the basics of QuickBooks and allow us to set you up. You can learn more at this Blog: ​http://www.glm-accounting-bookkeeping.com/blog--podcast/just-getting-accounting-started 

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