When Operating Your Business as a C Corporation Saves Tax

When Operating Your Business as a C Corporation Saves Tax
Small business owners usually minimize their taxes by
operating as a sole proprietorship, partnership or S
corporation. Or by operating as a limited liability company
taxed as a sole proprietorship, partnership or S
corporation.

However, even though C corporations may cause a business to
pay a second level of tax on business profit, a C
corporation may save the small business owner taxes in at
least three situations.

C Corporations Allow for Richer Fringe Benefits to Owners

With sole proprietorships, partnerships and S corporations,
the tax-free fringe benefits available to owners are very
limited. Sole proprietors, S corporation
shareholder-employees, and partners may typically deduct
health insurance and pension contributions. But not much
else.

In comparison, a C corporation can typically provide the
same tax-free fringe benefits to owners as it provides to
rank-and-file employees. These additional tax-free benefits
might include tax-free housing, educational assistance,
life insurance--and several other items as well.

A C corporation may also allow a business to provide better
healthcare benefits for shareholder-employees. In other
words, though this isn't true for sole proprietorships,
partnerships and S corporations, a C corporation may be
able to discriminate in favor of corporate officers or
shareholder-employees and provide them with better or more
healthcare benefits.

C Corporations May Minimize Income Taxes on Reinvested
Profits

All of the profit of a sole proprietorship, partnership or
S corporation gets allocated to the business owner or
owners and then taxed on their personal income tax returns.
This means, in effect, that the last dollars of profit the
business makes--money it's probably reinvesting in its
business--get taxed at the owners' highest marginal tax
rate.

And that rate can be crushing. The top marginal tax rate on
a small business owner can easily be forty or fifty percent
when you combine federal and state income taxes and any
self-employment taxes. A sole proprietorship, S corporation
or partnership may pay as much as $20,000 in income taxes
if it reinvests $50,000 of profit in the business.

Modest amounts of C corporation profit, however, get taxed
at modest rates. For example, the first $50,000 of a C
corporation's profit is typically taxed at rates of 15% to
20%. A C corporation reinvesting $50,000 in its operation
may pay more like $10,000 in tax on the reinvested profit.

C Corporations May Reduce Out-of-State Taxes A business
that operates in multiple states typically pays taxes not
just to its own home but also to the other states where it
employs people, holds property or provides services or
sells products.

Without going into tedious detail, businesses pay taxes to
all of the states in which they operate because tax laws
require businesses to apportion their business profits
among the states of operation.

As a practical matter, though, many small C corporations
extract most of all of their business profit in the form of
salaries and tax-free fringe benefits. That means a small C
corporation typically has less, "left-over" business
profit. And less business profit means less state income
tax.

----------------------------------------------------
Stephen L. Nelson is a tax accountant in Seattle,
Washington, the author of QuickBooks for Dummies, and the
editor of the http://www.fasteasyincorporationkits.com and
http://www.scorporationsexplained.com web sites.

ISO9001 - Eliminating the Quality Department

ISO9001 - Eliminating the Quality Department
Wherever the ISO9001 Standard is discussed, the one certain
item will be that of Improvement. Most often considered is
the Continual Improvement requirement of the ISO Standard
(section 8) or possible improvements to the Standard
itself. This latter particularly at the present time as we
await the publication of ISO9001:2008.

Seldom heard is any discussion on the fundamentals of
Quality Management as it is determined by individual
organisations, both within and without the ISO 9001
registration scheme. It is this that is discussed within
this short article.

Since the earliest days of structured Quality Management
Systems it has been an established practice to appoint a
Head of Quality function, normally but not always as a
'Quality Manager'. The proposition to be made here is that
this post is both unnecessary and frequently an encumbrance
to effective management.

Unnecessary because the requirements for ISO registration
do not demand it, and because at both the individual and
functional level this appointee does not in any real way
manage Quality. Manufacturing managers, accountants, sales
and marketing managers etc, are individually and
collectively responsible for the quality of their
management and delivery of the outputs of their function.
At the time of individual or corporate performance
assessment there is no escape from this responsibility.
Certainly the quality management is not renowned for
accepting responsibility for any deficiency in the quality
of performance at that time!

An encumbrance because despite this lack of accountability
for functional department performance, quality managers
through the activities of their staff occupy a position of
control, invariably negative, that takes from accountable
staff the authority to exercise the necessary authority in
furtherance of departmental business objectives. A classic
example of this can be seen across every industry in the
management of supplier selection. Typically purchases in
support of product development or production require the
selection of one or more suppliers. Purchasing agents are
mandated to select suppliers and agree terms for supply of
the required product or service, and are judged - and
sometimes remunerated - against their performance
achievement. However, their selection of a supply source
is commonly governed by a requirement to have a selected
supplier 'assessed' by the Quality function(a.k.a. the
Quality Manager) to determine suitability. This
determination is frequently an unproductive exercise, with
no measurable benefit, that results in significant
additional costs and delays that could be avoided. The
outcome of this appraisal process is often the rejection of
the proposed supplier by people with no responsibility or
accountability for their decision. Similar situations
exist internal to the organisation in the area of deviation
control (concessions) and internal audit. The overriding
issue is that responsibility for decision making has been
largely taken from those who will be held accountable for
the decision, and given to those ill equipped to make the
decision and with no responsibility for the outcome.

The proposed solution to this management structure weakness
is to re-allocate existing QA staff to those managers and
departments utilising the services provided. For example,
in this scenario vendor assessments would be performed at
the behest of the procurement function, which would manage
the staff and alone be responsible for determining actions
consequential to the assessment. This arrangement is then
to be repeated across the organisation wherever QA staff
are utilised and could be re-located.

The previous Quality Department would at that point cease
to exist. To satisfy the real need for some central
documentation management, and to act as a central resource
for internal audit of the management system, the post of
System Integrity manager/controller could be established,
with a clear responsibility for reporting on the integrity
and continued applicability of any documented management
system, with perhaps an ongoing responsibility for
representing the system status to visiting auditors and
customers.

There remains the question of providing an effective
internal quality system audit. This is a difficult issue
even in a well resourced enterprise, due to conflicting
calls on the available staff. The only satisfactory
solution to this is the outsourcing of the internal audit
task, and maybe the entire system integrity responsibility.
By so doing the audit requirement is satisfied, delivered
on time, by professional auditors, and at a cost that in
real terms is less than that of using occasional internal
auditors.

There are no obvious disadvantages here to this proposed
change. Managers with responsibility for any aspect of
quality (and don't they all have this) will have the
resources and authority to deliver on that responsibility.
Displaced QA staff will be located closer to the need for
their services, and can be seen to deliver value or move
on. The new position of System Integrity manager could be
a development post with high visibility for any suitable
candidate with a potential for higher office, while an
outsourced internal audit should bring an improved focus on
business needs rather than the more usual nit-picking
comments on minor breaches of procedure, as that is the
norm for so many audit reports.

----------------------------------------------------
Meon Consulting, founded by Ed Bones, was formed to assist
clients with managing their businesses in a manner
compliant with ISO9001/14001. Ed had earlier held a number
of senior posts with Hi-Tech companies in the UK, Europe
and USA. He has written and lectured on full range of
topics on quality improvement and TQM.
http://www.rent-an-auditor.co.uk .To obtain your FREE
Presentation please visit
http://www.rent-an-auditor.co.uk/contactus.html

The 12 Hour Workday! Enough is Enough! How-to Create More Work-Life Balance Now.

The 12 Hour Workday! Enough is Enough! How-to Create More Work-Life Balance Now.
Are you tired of working 10 and 12 and 14-hour days? Do you
want more time for yourself or your family? It's okay to
admit it! And, admitting that you need or want more time
for things other than work does not mean you are any less
professional or any less committed to your work. It simply
means that you are setting healthy boundaries to protect
your priorities and avoid becoming expended, depleted, and
overwhelmed.

Today, in a work world where competitive pressures are the
name of the game and huge work loads the norm...In a work
world where we face constant change and corporate cultures
that tell us that we must constantly do more, be more, and
bring in the sales or else...it is no wonder that a growing
number of workers are saying "enough" and seeking more
reasonable and balanced alternatives.

In my work as a career coach and career marketing
specialist, I am in daily contact with people in all
different phases of career transition. While many still
pursue careers on the traditional corporate ladder, and
most of these clients find this an extremely rewarding path
for a variety of their own reasons, there are a growing
percentage—and the number seems to be growing every
year—of individuals who have made a conscious
decision to buck the trend and take a step off that ladder.
These clients tell me that they want to regroup and carve
career paths for themselves that allow for more flexibility
and for what has been coined "work-life balance." The
changes aren't always as dramatic as you might imagine.
Often the solution is as simple as negotiating a more
flexible work arrangement within the corporate structure

If the above sounds like you, but you are hesitating to
make the move because you aren't quite sure you fully
understand your options and how to make them work for you,
the following explanation of some of the more popular
flexible work arrangements may be just the inspiration you
need.

Flex Hours - If you are happy working a 40-hour week, but
prefer not to work the typical five or six days per week,
negotiating for a schedule based on flex hours may be just
what you are looking at. For example, with a flex schedule,
rather than working five eight-hour days, you might work
four ten-hour days and take a full three days off for
yourself. Of all the options, this one has the potential to
be the least disruptive. You will still be working the same
number of hours; you'll just do it in a different
configuration.

Job Sharing - Although not common, job sharing is becoming
more popular and more accepted. This is a good option if
you love your job and want to remain on the same rung of
the "ladder." However, it does require, in most cases,
taking a cut in pay, so it may not be for everyone. Job
sharing entails taking a job that might normally require
40, 50, 60 hours per week and essentially cutting the
responsibilities down the middle to be shared by two
people. This arrangement requires constant communication
and cooperation, but it can be effective under the right
circumstances.

Portfolio Career - If you are ready to leave the corporate
world behind, or at least leave some of it behind, a
portfolio career may be your best option. While many of us
have been raised to believe that a full-time job is really
the only secure work arrangement, a portfolio career may
actually be more secure because it involves multiple
streams of income. If one source dries up, you always have
the other sources. What is a portfolio career? It is a
career that is built around your skills and interests
through a variety of part-time jobs, which may include some
combination of part-time employment, self-employment,
freelancing, consulting, and temporary jobs. If you truly
enjoy flexibility, freedom, and variety in your work, and
can tolerate the unpredictability, you may want to consider
a portfolio career.

The culture of the business world tells us to maximize
everything, push the limits, and pursue more. The three
flexible work arrangements described above might be the
perfect solution to help you avoid overwhelm and the many
negative effects of overload. You do, of course, have many
other options as well. Consider phased early retirement,
turning down a promotion, relocating to shorten your
commute, telecommuting, moving laterally or even into a
downward position. The choice is yours.

While you might experience resistance as you begin to set
clearer boundaries between your personal needs and work,
always remember that you and only you are in charge. If you
know your priorities and you truly want to create more
work-life balance, you can't just wait for someone else to
come and make the changes for you. You must make them
yourself!

----------------------------------------------------
Nationally certified resume writer and career coach,
Michelle Dumas is the director of Distinctive Career
Services LLC. Through Distinctive Documents
http://www.distinctiveweb.com and her Executive VIP
Services http://www.100kcareermarketing.com

Michelle has
empowered thousands of professionals all across the U.S.
and worldwide. Michelle is also the author of Secrets of a
Successful Job Search http://www.job-search-secrets.com