Small Business Taxes and the Entrepreneur

When most people start a business they have no idea that one of the biggest hurdles an entrepreneur has to face is the government. The 'powers that be' in government believe that your money is their money.  In this political season be very weary of any politician that dares to think that they know how better to spend your money than you do.

We live in a free nation, and as such have the government that we deserve. Knowing this is reality in the United States and also in the free nations of Europe, we come to the topic of small business taxation.

Luckily no matter how bad things are (or we think they are) in the United States, the situation generally is far worse in Europe and Asia. In nations like France and Germany becoming an entrepreneur is a daunting task riddled in paperwork and unbelievable hurdles. It is almost as if the governments of Germany, France, and even Japan don't really want entrepreneurs to be in charge of their own lives or to have a business. If you check out the rates at which people in Germany or France start businesses compared to Americans, you will quickly see this is the case. 

As an example, in Japan if you want to open up a retail store in say Tokyo or Yokohama, you actually have to get the permission of every competing retailer within a 2 mile radius. Now why in the world would your prospective competition want you to compete with them? They don't! As a result of this foolish policy and many many others (click here for a more detailed analysis of Japan's economic woes) Japan has seen their economy nearly collapse in the last 15 years. Gone are the days of the Rising Sun.

Having established that, I want to say that we need to be ever vigilant against those who look to Europe as the type of society that we need or want. As far as I'm concerned, sacrificing freedom for the security of say France's cradle to grave welfare system is ridiculous. But there are so many in both the Republican and Democratic parties (more so in the Democratic Party) who think they know better than you.  They need to force you to retire the way they want. They need to force you to pay for others to actually not work (click here for an example that will surely raise an eyebrow).  Sad, but true and this is our reality for the moment.

With this all understood it's time to tackle the subject of small business taxation. Click on any of the following topics to get the current understanding of tax law as it pertains to you and your small business.

Independent Contractors vs. Employees. How the IRS sees it.
Are the people who work for you independent contractors or employees? Before you can know how to treat compensation paid by you for services, you must first know the business relationship that exists between you and the person performing the services.

IRS Guide to Starting A Business
This is the IRS's guide to starting a business. It goes through the responsibilities that you as a business owner must adhere to or face stiff penalties or even jail time. Follow their advice well and avoid offending the powers that be.

A.I. is committed to telling it to you like it is!

         
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