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Juneau4

small business

20 posts in this topic

What is considered a small business? I have never heard either presidental candidate say in their opinion what a small business is. Is it 5 employees? More, less? What is it?

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It's not a simple answer. But then, what answer given by a governmental agency ever is? It varies by industry, and you can go to the U.S. Small Business Administration's Web site and download a 44-page pdf to answer your question.

Look here.

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I've always wondered about the same thing, but from the other direction. We often hear of 'big business' or 'big corporations' as being somehow evil...I've wondered how this is measured. Employees? That can't be it...Gross revenue? Net revenue?

Just how big does a business have to be before it is considered to be worthy (or deserving) of our scorn?

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I strive to qualify for others scorn. It just may mean I have managed to make something of myself.

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It's a great question... similar to what is middle class or what is "rich"... I think we all would be surprised at what the answers to these are. I have a feeling many would find themselves being called "rich" even though we know we are not...

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I guess when you are talking about individual wealth you can look at the tax bracket they are in. But for the most part in terms of our conversations here and some of the general comments that candidates are making I think the line between middle class and rich is pretty arbitrary. We all probably use slightly different definitions.

I think small business and big business really aren't defined terms either. You could probably look into the different tax plans and see where different tax breaks start for different size businesses and go with that as a decent guide. But as tax breaks shift around the definition of a small business might change as well.

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I think small business and big business really aren't defined terms either. You could probably look into the different tax plans and see where different tax breaks start for different size businesses and go with that as a decent guide. But as tax breaks shift around the definition of a small business might change as well.

I don't think there are really different "tax Breaks" as such for different size business. Yes there are different tax rules for partnetships, S corp, and S corp. but I would not call them "tax Breaks". Don't we have on corp. tax accountant on here that can answer these type of questions from some position of knowledge?

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In the eyes of the gov. If you have an employee, (keep in mind that you are an employee of your own buisness) and people pay you to provide a service or goods, than you are a buisness, a "big buisness" has more than 1 employee.

13% of all money that comes into my painting co. goes out as tax. That is before all the other taxes such as income tax etc. Then on top of that,if I remember correctly, I have to pay right around 17% to the feds and another 13% to the state on the profit's from my buisness on my PERSONAL income taxes.

Even on a one man shop they double dip. Watch out folks, the people leading this race to election day have already said they are going to raise taxes on ANYONE who pays wage's. That means all buisnesses, "big", or "small"

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If you go to the HSOforum of the US Small Business Administration and dig around you should eventually locate a .pdf file titled the SBA's current "Table of Small Business Size Standards."

What you will find is that the description for small business varies somewhat with industry, gross receipts, and number of employees.

Bob

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Also don't forget that this $250k or $200k (which is it, I keep hearing different numbers) a year and above tax increase is a manipulation of people who don't understand the tax system. Just because you show a $250k profit this year does not by any means that you as a business owner put $250k in your personal bank account this year. For example:

If you buy equipment that needs to be depreciated over multiple years you can only deduct a percentage of the cost per year regardless of the fact you paid for it up front. Example: You purchase machinery for $100k that has an expected life of 5 years. You either take on a $100k debt or pay cash for the equipment however this year you can only deduct 1/5 or $20k against this year's income meaning that you have to pay taxes on $80k of profit that you either owe the bank or paid out in cash.

If you have outstanding debt that you pay with income from this year you do not get to deduct any of that payment with the exception of interest expense.

I know of very few businesses that can operate with little or no money in the bank - just because you have generated taxable profit does not mean you can automatically withdraw that money for personal use - businesses need to have cash on hand to deal with payroll, bad debts, emergencies, inventory, etc.

This is just what came to mind while typing this, I'm sure there are tax professionals on here that could expand further however if you look beyond the idea that "people with $250k a year incomes make more than me so they should pay more" it's very easy to see that increasing this tax increase really will hurt a lot of small businesses.

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If you go to the HSOforum of the US Small Business Administration and dig around you should eventually locate a .pdf file titled the SBA's current "Table of Small Business Size Standards."

What you will find is that the description for small business varies somewhat with industry, gross receipts, and number of employees.

Bob

Is there an echo in here? gringrin

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Sorry. I didn't read every post. Didn't realize you had already posted this.

Bob

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Also don't forget that this $250k or $200k (which is it, I keep hearing different numbers) a year and above tax increase is a manipulation of people who don't understand the tax system. Just because you show a $250k profit this year does not by any means that you as a business owner put $250k in your personal bank account this year. For example:

If you buy equipment that needs to be depreciated over multiple years you can only deduct a percentage of the cost per year regardless of the fact you paid for it up front. Example: You purchase machinery for $100k that has an expected life of 5 years. You either take on a $100k debt or pay cash for the equipment however this year you can only deduct 1/5 or $20k against this year's income meaning that you have to pay taxes on $80k of profit that you either owe the bank or paid out in cash.

If you have outstanding debt that you pay with income from this year you do not get to deduct any of that payment with the exception of interest expense.

I know of very few businesses that can operate with little or no money in the bank - just because you have generated taxable profit does not mean you can automatically withdraw that money for personal use - businesses need to have cash on hand to deal with payroll, bad debts, emergencies, inventory, etc.

This is just what came to mind while typing this, I'm sure there are tax professionals on here that could expand further however if you look beyond the idea that "people with $250k a year incomes make more than me so they should pay more" it's very easy to see that increasing this tax increase really will hurt a lot of small businesses.

What I have been hearing is...if you make...$250,000 or more...

That would be Net, before Personal Income Taxes, and Possibly After Personal Deductions, which can be Quite High with Large Mortgage Interest and Property Tax Deductions...unless that was a new Threshhold for the Alternative Minimum Tax...which is currently at around $40K, though Temporarily Suspended...

I know some figure what their Biz Grosses is what they make...but that is foolish if the Biz Grosses $100,000 but has Expenses of $70,000...you only made $30,000...

I know it's Un-American in some's view to spread the Wealth around...they feel it should be Concentrated as it is now...in the hands of a few...as long as they are one of those small Percentage...

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It's easy to say spread the wealth when the one saying it isn't one of the wealthy.

I highly doubt Barack would be saying this himself except that it is politically working to his advantage.

Okay, maybe I'm out of line and judgmental by saying this because there are some who are more than willing to spread their wealth without expecting personal gain. I humbly back down.

Bob

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It's easy to say spread the wealth when the one saying it isn't one of the wealthy.

I highly doubt Barack would be saying this himself except that it is politically working to his advantage.

Okay, maybe I'm out of line and judgmental by saying this because there are some who are more than willing to spread their wealth without expecting personal gain. I humbly back down.

Bob

Yep....how much of his wealth is he spreading around to the poor? Oath of poverty maybe?

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Originally Posted By: BobT
It's easy to say spread the wealth when the one saying it isn't one of the wealthy.

I highly doubt Barack would be saying this himself except that it is politically working to his advantage.

Okay, maybe I'm out of line and judgmental by saying this because there are some who are more than willing to spread their wealth without expecting personal gain. I humbly back down.

Bob

Yep....how much of his wealth is he spreading around to the poor? Oath of poverty maybe?

Well, since they're Both Multi-Millionaires, and McCain's Plan allows Himself to keep more... and Obama's allows Himself less...Who's stands to gain more from their Own Plan...

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Originally Posted By: Ebiz
Also don't forget that this $250k or $200k (which is it, I keep hearing different numbers) a year and above tax increase is a manipulation of people who don't understand the tax system. Just because you show a $250k profit this year does not by any means that you as a business owner put $250k in your personal bank account this year. For example:

If you buy equipment that needs to be depreciated over multiple years you can only deduct a percentage of the cost per year regardless of the fact you paid for it up front. Example: You purchase machinery for $100k that has an expected life of 5 years. You either take on a $100k debt or pay cash for the equipment however this year you can only deduct 1/5 or $20k against this year's income meaning that you have to pay taxes on $80k of profit that you either owe the bank or paid out in cash.

If you have outstanding debt that you pay with income from this year you do not get to deduct any of that payment with the exception of interest expense.

I know of very few businesses that can operate with little or no money in the bank - just because you have generated taxable profit does not mean you can automatically withdraw that money for personal use - businesses need to have cash on hand to deal with payroll, bad debts, emergencies, inventory, etc.

This is just what came to mind while typing this, I'm sure there are tax professionals on here that could expand further however if you look beyond the idea that "people with $250k a year incomes make more than me so they should pay more" it's very easy to see that increasing this tax increase really will hurt a lot of small businesses.

What I have been hearing is...if you make...$250,000 or more...

That would be Net, before Personal Income Taxes, and Possibly After Personal Deductions, which can be Quite High with Large Mortgage Interest and Property Tax Deductions...unless that was a new Threshhold for the Alternative Minimum Tax...which is currently at around $40K, though Temporarily Suspended...

I know some figure what their Biz Grosses is what they make...but that is foolish if the Biz Grosses $100,000 but has Expenses of $70,000...you only made $30,000...

I know it's Un-American in some's view to spread the Wealth around...they feel it should be Concentrated as it is now...in the hands of a few...as long as they are one of those small Percentage...

Do people actually believe that people that make more money than they do just shove it under there mattress? Even these people buy cars, houses, washing machines etc. which in turn creates jobs. They also pay large amounts of taxes that pay for government spending. I will admit a person who makes more money gets to spend more, so maybe that is the whole problem some people have with people that make more money than they do?

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That's precisely the problem in most cases. Most anyone that you talk to will easily jump on the wagon that the wealthy need to be forced to share more. Naturally, when asked who the wealthy are the response usually works out to be anyone more wealthy than me.

Ask anyone making over $50K per year and they'll tell you they are not wealthy. Ask anyone making over $100K and they'll say the same. Ask anyone making over $250K and their response will be similar. And so on.

Bob

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All I know is, I fall well below the 250,000 a year or 150 or 200 or whatever Obiden is saying today.... but I want to be above that line someday.

I'll work my butt off to get there, so if I'm able to get there I don't want my hard work to pay off for those who are content with their lower middle class income.

I'm willing to pay taxes, but what Barack says is fairness, really isn't fair. Just my opinion.

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