Starting a business can be as costly and daunting as it is exhilarating and lucrative. While it's true that "the best laid plans of mice and men often go awry," it's equally true that prudence ranks supreme among the virtues.
Whether your idea sprouted from a lifelong trade or a nicely-timed niche, your success in 5, 10, or 20 years depends on how well you plan ahead. Step one in that planning should be start-up costs.
Simplify tax time and add peace of mind around any potential audit investigation by maintaining these documents on file. Whether you prefer paper records or electronic is up to you. Just make sure you have these records in place for 7-10 years. Erroring on the side of caution here is not a bad thing.
In 2016, Arizona voters passed Proposition 206, a law that mandates a steady increase in Arizona's minimum wage through 2020, after which time increases will be pegged to the rate of inflation. Starting on January 1, 2018, Arizonans must be paid $10.50 an hour, up from $10 in 2017. The additional income is designed to help low-income families make ends meet. So far, beneficiaries of the higher wage seem to be spending their additional income, as Arizona's economy remains strong while unemployment went down in 2017 from five to four-and-a-half percent. Still, it remains to be seen how the state will fare as the minimum hourly rate continues its upward climb to $11 in 2019 and $12 in 2020. The warnings by Governor Ducey and Arizona Chamber of Commerce that the higher wage may cost jobs may still prove true.
ASC 606 is an accounting regulation that concerns revenue recognition. It may be the biggest accounting change in decades for many companies. The regulation was drafted by the Financial Accounting Standards Board in 2014, but will only begin to take effect for most companies this year. It is designed to standardize the way that companies recognize revenue, but, as noted in this Forbes article by Tien Tzuo, that standardization may come with a hefty price tag for additional accounting practices and software which track and recognize said income.
If the term "tax season" makes you gloss over, you're not alone. Paperwork doesn't keep the lights on. It does, however, keep the IRS out. Here's what you need to know about 1099 tax forms for 2018 filing: