Six tips for people starting a new business

Understanding the tax responsibilities that come with starting a business venture can save taxpayers money and help and set them up for successs. has the resources  and answers to help people through the process of starting a new business.

Here are six tips for new business owners

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 the last day of any month except December.

Apply for an employer identification number (EIN). 

An EIN is also called a federal tax identification number.  Its' used to identify a business.  Most businesses need one of these numbers.  It's important for a business with an EIN to keep the business mailing address, location and responsible party up to date.  IRS regulations  require EIN holders to report changes in the responsible party within 60 days.  They do this by completing Form 8822-B.  Change of Address or Responsive Party and mailing it to the address on the form.  Have all employees complete these forms: 

Form i-9, Employment Eligibilty Verification U.S. Citizenship and Immigration services 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.  Visit stat's website

Change of Address or Responsible Party and mailing it to the address on the form.

Have all employees complete these forms:

Form I-9, Employment Eligibility Verification U.S. Citizenship and Immigration Services 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.

Visit state's website.


Prospective business owners should visit their state's website for info about state requirements.


Last Day to Register to Vote Florida

http://Florida offers online voter registration.You can register by mail to vote in Florida by printing a voter registration form, filling it out and mailing it to your local election office.  You can also register to vote in person if you prefer.

Key Dates

Election day is Nov. 3

Registration deadlines

Online: Oct 5

By mail: Postmarked by Oct. 5

In person: Oct. 5

Early voting Oct 24 - Oct. 31 but dates and hours may vary based on where you live.

In Person: by Oct. 5

Absentee ballot deadlines Request:

Request: Oct 24

Return by mail: Received by Nov. 3

Return in person: Nov. 3 by 7:00 pm

Early voting

Oct. 24 - 31 but dates and hours may vary based on where you live

Volatility Is the Price of Seeking Big Returns

Dan Caplinger  August 18, 2020


How to "Invest" in the Stock Market Without Any Risk

The insurance industry has always taken a slightly different approach to working with investors, in large part because its business model requires it. Insurance companies typically accentuate the risks involved in investing and offer products that are designed to eliminate or reduce those risks. For instance, life insurance policies reduce the risk that your family won't have enough money if something happens to you, while immediate annuities ensure that you'll get a stream of regular monthly income that will never run out no matter how long you live.

You can also buy financial products from insurers that are designed to reduce the risk of losing money from stock market crashes while still participating in some of the upside of stocks. Equity indexed annuities are insurance contracts that offer you a return that's linked to a chosen stock market benchmark, such as the S&P 500 index. However, these indexed annuities have a great feature: If the stock market goes down in a particular year, the value of the annuity doesn't drop — it stays the same. 

At first, that sounds like getting the best of both worlds. You get to participate in the stock market on the upside, but when things go badly, the insurance company will protect you.

However, there's a price you'll pay to eliminate downside volatility. In fact, there are several:

  • Most equity indexed annuities set a maximum amount that they can grow during a particular time period. These caps reduce the annuity's return when the stock market is doing extremely well. So, for example, if an indexed annuity has a cap of 10% per year, then if the S&P goes up 30% — as it did in 2019 — you'll get at most a 10% rise in value.
  • Some equity indexed annuities also only give you partial participation in the stock market's gains, regardless of how small. For example, an equity indexed annuity might have a participation rate of 90%, in which case when the stock market rises 10% in a given year, you'll only get 9% — assuming no cap applies to reduce the return further.
  • Equity indexed annuities often come with significant costs, and those fees can be charged directly against your gains. So, an insurance company could charge an asset-based fee of 2 percentage points that could bring what would otherwise be a 10% return down to 8%. 
  • You can also choose optional features for your equity indexed annuity in many cases. These can be useful, but they come with extra fees as well that can eat into your return.
  • If you need your money before a set period, then you'll usually owe sizable surrender charges. A 9% surrender charge is typical for the first year you own an indexed annuity, and it slowly moves lower as more time goes by.
  • Finally, most equity indexed annuities only refer to the return of the index itself without making allowances for the dividends that the stocks in that index pay. 

That may seem like a price worth paying if it takes away the pain of stock market crashes. However, history shows that the true cost is much higher than most people can afford to pay.

Cutting a 243% Gain to Just 41%

The financial crisis was one of the toughest market environments that many of today's investors have gone through. Yet the decade that followed brought one of the strongest bull markets ever. Participating fully in that bull market was a key component of success for the best investors during the period. Even if all you did was invest in the S&P 500 index, you would've earned an average total return in excess of 13% per year between the end of 2008 and the end of 2018. That works out to a total compound return of 243%.

Using a typical equity indexed annuity to invest during that period, however, wiped out most of the gains you would've enjoyed. An illustration from Fidelity used an indexed annuity with a monthly return cap of 1.5% and found that the average earnings for the annuity would've been just over 3.5% per year, even when you include a bonus that the insurance company offered. That's because eliminating downside volatility also eliminated those months when the market soared. All in all, that annuity provided a total return of just 41% over the 10-year period.

There Are Two Sides to Volatility

There's no question that giving up the downside risk of the stock market is valuable. But if you give up too much of the upside in exchange, then you leave yourself with no practical way to reach your financial goals. That's too big a price to pay. Instead, do what you can to get comfortable with volatility, knowing that the huge gains over time will make up for the inevitable downturns along the way. It's not always easy, but the journey's worth it in the long run.

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Dirty Dozen part 1: Taxpayers should be on the lookout for these scams

Here is the recap of the first six scams in this years Dirty Dozen

Phishing: Taxpayers should be alert to potential fake emails or websites looking to steal personal information.  The IRS will never initiate contact with a taxpayer through email about a tax bill, refund, or Economic Impact payment.  Don't click on links claiming to be the IRS.

Fake charities: Criminals frequently target natural disasters and other situations, such as COVID-19, by setting up fake charities to steal from well-intentioned people triying to help in times of need.  Frauduletn schemes normally start with unsolicited contact by phone, text, social media, email or in person using a variety of tactics.

Threatening impersonator phone calls:  IRS impersonation scams come in many forms.  A common one remains fake threatening phone calls from a criminal claiming to be with IRS.  The agency will never threaten a taxpayer or surprise them with a demand for immediate payment.  Scam phone calls include those threatening arrest, deportation or license revocation if the victim doesn't pay a fake tax bill.

Social media scams:  Taxpayers need to protect themselves against social media scams, which frequently use events such as COVID-19 to try tricking people.  Thses include emails where scammers impersonate someone's family, friends or co-workers.

Economic Impact Payment or refund theft: This year criminals turned therir attention to stealing Economic Impact Payments.  Many of these scams are identity theft-related.  Criminas file false tax returns or supply false information to the IRS to divert refunds to wrong addresses or bank accounts.

Senior fraud: Senior citizens, their friends and family need to be on alert for tax scams targeting older taxpayers.  Their growing comfort with technoloty, including social media, gives scammers another means of taking advantage of them.


What To Do If Your Stimulus Check Was Issued ,Lost, or Stolen

Taxpayers can place a trace on theri Economic Stimulus check by calling 1-800-919-9835 ( you may experience long wait times as staff is limited) or

. Submit a complete form 3911, Taxpayer statement regarding refund (PDF) http://Form 3911, Taxpayer Statement Regarding Refund (PDF)

. If you submit a request and you are Married Filing Jointly, both must sign;

. Write EIP on top of the form and complete sections I, II, and III;

. Answer the refund questions as they relate to the EIP;

. When completing Number 7 under section I, check the box individual for theType of 

   return; enter 2020 as the Tax Period and leave the date filed blank;  

. Mail the tax form to or Fax 855-203-7528 for Florida Residents



Millions of people will get their Economic Impact Payment by prepaid debit card

Nearly four million people are being sent their Economic Impact Payment debit card, instead of paper check.  The determination of which taxpayers will recieve a debit card was made by the Bureau of the Fiscal Service, another part of the Treasury Department that works with the IRS to handle distribution of the payments.

These Economic Impact Payment Cards arrive in a plain envelope form Money Network Cardholder Services.  The Visa name will appear on the front of the card; the back of the card has the name of the issuing bank, MetaBank@, N.A.  Information included with the card will explain that the card is an Economic Impact Payment

Learn more at


Protecting Real Estate Investors in COVID

Below is a link for Real Estate Investors to learn more about starting and maintaining llc's from attorney Lee Phillips.  Lee has a wealth of information on youtube for real estate investors.


Economic Impact Payments

Get the latest information and guidance on economic impact payments, organized by type for quick reference at the link below.

Stimulus Checks

Most Social Security and Railroad Retirment recipients don't need to fille a return or provide information to get Economic Impact Payent.

Eligible Social Security (including SSDI) and Railroad Retirment beneficiaries whose benefits are reported on a Form 1099 SSA or RRB will not need to file a tax return or provide information to receive a payment.  However, those recipients who have qualifying children under age 17 must provide information through the Non-Filers: Enter Payment info tool to claim the $500 payment per child.  Even though these beneficiaries aren't typically required to file a tax return, they will still receive a payment.  Social security (including SSDI) and Railroad Retirement beneficiaries who don't file a tax return who have qualifying children under age 17 must use Non-Filers: Enter Payment Info to claim the $500 payment per child.  Economic Impact Payments will be sent automatically to this group of people the same way they receive their Social Security retirement, disability (SSDI), or survivor benefits or their Railroad Retirment benefits.

Stimulus Checks Deposit Instructions for Non Filers

Go to look in the upper left corner and click on Non-Filers: enter your deposit information here and follow the instructions.