New York SBDC Research Network

From the Small Business Administration . New taxpayers, such as recent graduates who’ve just entered the job market, probably have a clean tax slate. But seasoned taxpayers have a history that can impact their taxes going forward. Due to limitations and restrictions, some tax breaks cannot be fully used in the year in which they are generated but can be carried over and used in other years. Failing to know what these are and keep track of them wastes valuable tax breaks that can cost you money. Tax breaks subject to carryovers Dollar limits and other restrictions curtail write-offs for your current and past outlays. Here are some to note:

In general, in the US, funds raised on Kickstarter are considered income. In general, a creator can offset the income from their Kickstarter project with deductible expenses that are related to the project and accounted for in the same tax year. For example, if a creator receives $1,000 in funding and spends $1,000 on their project in the same tax year, then their expenses could fully offset their Kickstarter funding for federal income tax purposes. If a creator receives funding in one year and spends money on their project in a later year, consider whether their expenses can still offset their Kickstarter funding using the accrual method of accounting. More from Kickstarter . From one Kickstarter alum: "Approximately 33% of the funding goal goes to pay the state and federal taxes that will be levied against the money raised. American tax law doesn't count up-front production costs as an immediately deductible business expense, so at first I'll have to pay taxes on n

Most small businesses make charitable donations. In fact, surveys have shown that about 75 percent of small business owners donate some portion of their profits — about 6 percent on average — to charitable organizations each year. As we’re in the midst of the holiday season (and tax season looms), many small business owners are likely considering charitable contributions and wondering how such donations might impact the bottom line in terms of tax deductions. First, it’s important to choose the right charity and avoid certain pitfalls that could leave you in a bind. Read more from SBA.gov .

A report published by the Office of Advocacy measures the small business benefit of federal tax expenditures. Tax expenditures are provisions in the tax law designed to benefit specific groups of taxpayers. They are similar to spending programs but generally do not involve direct federal outlays. Rather, they work through the income tax system, taking the form of special credits, exemptions, deductions, exclusions, and preferential rates. This study estimates the utilization of federal tax expenditure provisions by small and large businesses in 2013. The report, Measuring the Benefit of Federal Tax Expenditures Used by Small Business , was written by John O’Hare, Mary Schmitt, Judy Xanthopoulos of Quantria Strategies, LLC. For press inquiries or to speak with Advocacy’s Chief Economist Janemarie Mulvey, Ph.D., contact Elle Patout, Public Affairs and Media Manager, at (202) 205-6533 or elle.patout@sba.gov.

The IRS has clarified how the 50-percent limitation on deducting meal and entertainment expenses applies to reimbursement arrangements involving three-party situations (e.g., employee leasing companies) and to independent contractors. The new rules provide options for claiming these deductions and offer planning opportunities that should be explored with your tax advisors. More from the Business Owner's Toolkit .

This memorandum contains a summary of the corporation tax changes that are part of the 2013-2014 New York State budget. The changes contained in the memorandum are effective for tax years 2013 and after. This includes New York State Business Incubator and Innovation Hot Spot Support Act (Articles 9-A and 22), Chapter 59 of the Laws of 2013 (Part C) created the New York State Business Incubator and Innovation Hot Spot Support Act (the Act) to support companies in New York State that are in the early stages of development. The Act provides for operating grants and other assistance to New York State incubators and New York State innovation hot spots for the purpose of developing successful businesses in the state by providing technical assistance, direct mentorship, entrepreneurial education, and business development service s. In addition, new section 38 has been added to the Tax Law to provide for New York State innovation hot spot program tax benefits. View the entire document .

In certain instances, section 5-a of the Tax Law requires businesses that are awarded contracts with New York State to certify that they are registered to collect New York State and local sales and use taxes (sales tax) on sales delivered to locations within New York. The purpose of section 5-a is to ensure that contractors do not get state work unless they, their affiliates, and their subcontractors making sales of tangible personal property or taxable services are registered to collect New York State’s sales tax. This means that certain businesses, including in some cases out-of-state businesses not currently registered to collect New York State sales taxes, will need to register for New York State sales tax purposes. This bulletin explains the general rules related to the certification requirements for contractors and their affiliates and subcontractors. For more detailed information on the contractor certification requirements imposed under section 5-a of the Tax Law, see Publ

Empire State Development and the New York State Department of Taxation and Finance announced the appointment of Mwisa Chisunka as New York State Business Ombudswoman and Director of Business Tax Services and Education. As New York's first Ombudswoman, Ms. Chisunka will work closely with the business community to provide education about tax law developments, answer questions, and help businesses navigate the issue resolution process. She will also launch pro-business programs as part of Governor Andrew M. Cuomo's Open for Business initiative. More HERE .

For many small business owners, the home office deduction can be a mixed blessing--the savings are valuable to a tight margin business, but its complexity can lead to errors and unwanted IRS attention. But for 2013 and beyond, you have more flexibility when claiming this tax break. Keep Reading for More on This Money-Saving Option

While the fiscal cliff deal extended the income tax rates for 99% of Americans, one expiring provision that was not given new life by the 11th hour negotiations was the 2% reduction to an employee’s share of Social Security payroll taxes. For 2011 and 2012, employees paid only 4.2% of their wages towards Social Security. Beginning January 1, 2013, that burden has reverted back to 6.2%. As a result, if you earn a salary, you may have noticed that your first paycheck in 2013 was 2% lighter than your last check in 2012, assuming equal pay. And that has some people awfully mad. *More from FORBES HERE .

As 2012 comes to a close, individuals and businesses need to remember some key tax provisions for making contributions to charity. The IRS offers these reminders for year-end giving: To deduct monetary donations you must have a bank record or written document from the charity stating the name of the charity, the contribution amount and the date. Contributions are deductible in the year made, even if the credit card bill isn't paid or the check isn't cashed until 2013. Only donations made to qualified organizations are tax deductible. Make sure the organization you want to donate to is qualified before making any contribution. Individuals must itemize their deductions on Form 1040 Schedule A or use a short form (Form 1040A and 1040EZ) to claim the standard deduction. Find more year-end giving tips from the IRS.

ADP Small Business Services division offered tips and reminders to small business owners , their accountants and other advisors to get a head start on year-end tax preparation to help avoid delays, streamline the tax filing process and improve outcomes. The New York State Tax Department offers online demos about enhanced Sales Tax Web File . The four demos cover a variety of filing scenarios and you may view them at your convenience.

The New York State Department of Taxation and Finance said today it will extend its call center hours in order to assist businesses and tax professionals as they file sales tax returns using a new, online sales tax system. The enhanced, more user-friendly system was launched in September, but for nearly 250,000 users, December will be their first time using the new system to file returns. The filing deadline is December 20. From December 13 through December 20, 2012, the call center hours are: Weekdays - 8:30 a.m. to 7:00 p.m. Saturday, December 15 - 9:00 a.m. to 1:00 p.m. The call center's phone number is 518-485-2889. View the entire document .

From SBA : The end of the year is fast approaching, but there’s still time to take advantage of a variety of business tax credits and deductions – some of which are new for 2012. Here are just a few to consider, plus some best practices for maximizing your claims. Take Advantage of 2012 “Section 179” Deduction Limits . Under the American Recovery and Reinvestment Act, Section 179 of the tax code provides tax benefits for equipment purchases made before the end of the year.

The New York State Department of Taxation and Finance today announced the additional extension of certain tax filing and payment deadlines for taxpayers directly affected by Hurricane Sandy .

The IRS office of Federal, State and Local Governments (FSLG) will address the requirements for submitting Form 1099-G electronically in a FREE one-hour phone forum on Tuesday, September 11, 2012 at 2:00 p.m. ET. No Continuing Education [CE] credits are available for this session. This Phone Forum offers an overview of the requirements to assist you in maintaining compliance with reporting standards. You will learn how to: Comply with requirements for reporting unemployment compensation , tax refunds, taxable grants, agricultural and certain other payments Comply with electronic payee affirmative consent requirements Assist recipients in receiving their information documents electronically Following these procedures will satisfy the affirmative consent reporting requirements, save valuable time and resources, and improve customer service. You can pre-register electronically at the FSLG Phone Forum Registration site . Please register as soon as possible because sp

This memorandum explains the Tax Department’s existing policy concerning employer withholding on the wages paid to certain nonresident employees whose primary work location is outside of New York State and who are expected to work 14 days or fewer in New York State during the calendar year. Law and background Section 601(e) of the Tax Law imposes a personal income tax on the New York source income of a nonresident individual. The New York source income of a nonresident individual includes wages and other compensation for services performed in New York State. Section 671 of the Tax Law provides that every employer maintaining an office or transacting business in New York State and paying any wages subject to New York State personal income tax must deduct and withhold tax from those wages during each calendar year. The amount withheld must be substantially equivalent to the tax reasonably estimated to be due from the inclusion of the wages in the employees’ New York adjusted gross

From here : When it comes to crowdfunding, most people forget that there are tax implications. Did you really think Uncle Sam would give you a pass? Everyone who raises money through crowdfunding will be taxed as it is considered revenue. There is one exception to the rule, however, and that is either you are a registered non-profit 501(c)(3), or you have secured an authorized fiscal sponsor to chaperon your fundraising campaign. So when you do plan your crowdfunding campaign, check to see if you would be eligible for a tax-exemption. Basically, there are three taxable ways money raised in crowdfunding can be categorized: Sales Tax, Income Tax, or Gifts.

From SBA : If you are new to freelancing or thinking of becoming a freelancer, you’ll no doubt have lots of questions, especially about the legal and regulatory paperwork you need to obtain and manage throughout the business year. Freelancing, particularly if you are unincorporated, is one of the least paperwork-intensive forms of business ownership. Nevertheless, you are still a business and you need to be sure you have the right licenses or permits, make estimated tax payments on time, report your earnings each year, and deal with client paperwork such as contracts, non-disclosure agreements, and more. To help you stay on top of your obligations, here’s a breakdown of key legal and regulatory processes, plus important “business-ready” documentation you’ll need when dealing with new clients.

Publication130-F (7/12) The Department of Taxation and Finance’s purpose in conducting an audit is to verify that you paid the correct tax. During the audit, you may be required to provide the auditor with whatever records are necessary to verify the information you provided on your return. Depending on the type of return being audited, this may entail a review of your income, receipts, expenses, credits, and other business records.