Understanding Financial Statements 2

In my previous post, I talked about understanding the financial statements and the 3 main financial statements you need to understand your business namely the: Profit and loss statement The balance sheet statement Statement of cash flow These 3 financial statements answer the following questions: How much profits was generated by the business over a…

Understanding financial statements

There are three statements you need to understand to make sense of your business namely: the balance sheet statement, the income statement and the cash flow statement. As a business owner, you need to keep track of cash, assets, liabilities, operating income and expenses, other income and other expenses. Thereby, the need for these three…

Deducting volunteer expenses

If you volunteer at your local charity, any out of pocket expenses you have might be deductible – including your mileage. Most people don’t think of mileage used to go back and forth from volunteering activities as a deductible expense. Deductible expenses Some expenses that are eligible for deduction while volunteering are: Mileage expense (computed…

Social Security and Medicare taxes

American pay different types of taxes such as income tax, state tax, state tax real estate tax, social security tax, medicare tax, etc. The major objective of the tax law is to raise revenue. But mostly, taxes are raised to secure the welfare of citizen. This article focuses on the social security and medicare tax…

Tax treatment of funding in a corporation

The C Corporation is a legal entity most small business owners overlook. Depending on your personal circumstance it might be the most tax beneficial entity for you. In this article I look at how to treat shareholders contribution in a corporation. Capital contributions A corporation could receive money from shareholders either in exchange of stock…