Small business forecast for 2008
Our featured guest in this episode of Small Business Trends Radio is Matthew Mogul, Associate Editor of Kiplinger Business Forecast. Matthew provides business insights for the coming year and discusses a variety of issues that may have an effect on small businesses.
Here is a sampling from the show:
Recent Pay-Go — rules dictate that when one tax is trimmed, money from additional sources is required to compensate before the legislation is passed. An example would be the AMT legislation. It is estimated that 23 million Americans could be hit with the AMT tax. A trillion dollars over 10 years is estimated to be required to pass the AMT legislation which would make fewer Americans subject to AMT. As a result, the IRS is going to be hunting for money from other sources.
A tax gap — exists when it comes to sole proprietors and entrepreneurs and recent estimates show it is approximately 300 billion dollars. A GAO investigation claimed that one third of the tax gap comes from small firms not paying taxes they are supposed to be paying. This means that there may be more audits for smaller organizations. IRS red flags are dinners, mileage, charity, home office, auto use, travel, entertainment, etc. and small companies will be targeted to reduce this tax gap.
Keep receipts — and really good records. The frequency of audits will, most likely, increase. Maintaining good records, documentation and receipts can assist you when/if it happens to you.
Sole Proprietors — will be looked at closely by the IRS as well as many more 1099 forms being sent. If $600 or more has been paid for services, there will be paperwork and documentation now to trace it. Companies are now paying a lot of attention to this and are more focused in their IRS responsibilities as a result.
Sarbanes-Oxley — Small publicly traded firms make up 44 percent of the companies publicly traded in the U.S. - about 6,000 companies altogether. Certain small companies have been exempt from certain provisions, but must brace themselves for compliance with Section 404.
Mogul shares many insights into the coming changes for the face of small business and what to expect from some of these as well as how to prepare yourself and your business for them.
Click the link below to listen to the full interview of Matthew Mogul, Associate Editor of Kiplinger Business Forecast.
This broadcast has been made possible by Small Business Trends Radio and Anita Campbell.