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J.K. Lasser's Small Business Taxes 2017 by Barbara Weltman

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CHAPTER 25 Tax Strategies for Opening or Closing a Business

  1. Initial Tax Decisions to Make
  2. Investing Your Own Resources
  3. Debt versus Equity Financing
  4. Tax Identification Numbers
  5. Tax Reporting for the First Year
  6. How to Write Off Start-Up Costs
  7. Setting Up a Business Bank Account and Credit Card
  8. Moving a Business
  9. Aborted Business Ventures
  10. Bankruptcy
  11. Expenses of Winding Up a Small Business
  12. Tax Reporting in the Final Year

Two of the most challenging times of running a business are, perhaps, the start-up and close-down phases. Taxwise, there are certain opportunities that should not be overlooked.

For further information, see IRS Publication 583, Starting a Business and Keeping Records.

Initial Tax Decisions to Make

When you start a business of any kind, whether a full-time or part-time one, you need to make certain choices. Here is a checklist of the elections, choices, and decisions to make when commencing a business (the chapter in which the item is discussed is also noted):

  • Type of entity (Chapter 1). Should you incorporate? Form an LLC?

  • Tax year (Chapter 2). Should you use a calendar year? A fiscal year (and which fiscal year)?

  • Accounting method (Chapter 3). Should you use the cash method? Accrual method? Some other method?

  • Investing your own resources. When you add money or property to a start-up, are there any immediate tax results to you? To the business?

  • Financing (see below). If you need more money beyond what you can add, should you borrow money to start up? Should you ...

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