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One of the biggest challenges facing people who are starting their own small business is understanding and meeting the tax filing requirements. It can be an overwhelming experience to learn about federal tax responsibilies and to avoid common pitfalls.
The following is a list of the basic tips offered by the IRS to avoid potential problems:
- Classify workers properly as employees or independent contractors as determined by law, not the choice of the worker or business owner;
- Deposit federal employment taxes, called trust fund taxes, according to the appropriate schedule;
- Start making estimated quarterly payments to cover your own income tax and social security self-employment tax liability;
- Keep good records to protect your personal and financial investment and to make tax filing easier;
- Consider a tax professional to help you with Schedule C;
- File and pay your taxes electronically; it?s fast, easy, and secure;
- Protect financial and tax records to ensure business continuity in the event of a disaster; and
- Avoid abusive tax avoidance schemes such as the IRS?s 2008 ?Dirty Dozen."
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