Tax & Business Law
- The Internal Revenue Service defines small businesses as those with less than $10 million in assets. Businesses with more than $10 million in assets are considered mid- or large-sized. In general, small businesses are usually taxed differently than their larger counterparts, with more incentives and tax breaks to help entrepreneurs stay in business during the difficult beginning period of a business, when so many fail.
- Businesses can deduct expenses from their taxable income to reduce their tax burden. However, by law only ordinary and necessary expenses can be deducted. These do not include the expenses used to figure the cost of goods sold, capital expenses and personal expenses.
- Nearly all businesses, no matter their size, are required to have an Employer ID Number or (EIN) for identification purposes. It is free to apply for an EIN with the IRS, and business owners can even apply online. Some states require businesses to have a state number or charter as well.
