Mention “taxes” to an entrepreneur and the likely response will be a rolling of the eyes, a litany of complaints about the complexities of the rules governing small businesses and a few well-chosen verbal jabs at the U.S. Internal Revenue Service.

Robert Pacios, L-A SCORE counselor and retired tax accountant, admits that “the IRS may be the agency everyone loves to hate, but they only manage the tax laws and policies that Congress passes. And rather than being a bane to small business, the agency has taken several initiatives to be a benefit to owners and the self-employed by providing much-needed guidance to tax procedures and requirements without those confusing ‘gov-speak’ terms.”

One of the chief improvements is a special Web site, www.irs.gov/smallbiz. “This is a great place to give yourself a tax smarts tune-up,” notes Pacios, “and what could be more authoritative than information coming from the chief tax honchos themselves?”

A section called “Starting, Operating or Closing a Business,” for example, covers a tremendous amount of tax territory and includes much of the site’s most useful information. This is where you’ll find IRS rules on hiring your own kids or other family members, recordkeeping, employer ID numbers and selecting a business structure.

There’s also help answering a key tax-related question: Is what you are doing a true business or merely a hobby? If the IRS decides your “business” is really just a hobby, your expenses may not be deductible. Look for their nine-point checklist to see how you stack up. Also visit the “Industries/Professions” section for specific information about tax regulations that may apply to your type of business.

The advice and information under “Operating a Business” is helpful for just about any type of small business. If you have employees, you’ll find resources on hiring, employment taxes and wage reporting requirements. And the all-important “Business Expenses” section defines the types of costs you can and cannot deduct from your taxes.

For the self-employed and independent contractors, there is a full section that covers filing requirements, when a tax identification number is necessary, a listing of special publications and forms, responsibilities associated with operating and closing a business, and other valuable information.

To learn more about improving or starting your small business, contact SCORE – Service Corps of Retired Executives – at 207-782-3708. SCORE is a nonprofit association of more than 10,500 volunteer business counselors who provide free, confidential counseling and training workshops.


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