Small Business

Small Business Resources

Westchester NY accountant Paul Herman of Herman & Company CPA’s is here for all your financial needs. Please contact us if you have questions, and to receive your free personal finance consultation!  

If you are a small business owner, here is a list of organizations that may have tools, information, and other resources to help your business grow.7650804342_9715bb425f_b

Business USA The mission of Business USA is to be a centralized, one-stop platform for businesses to access government services to help them grow and hire. Business USA uses technology to connect businesses to the services and information relevant to them, regardless of where the information is located or which government agency’s website, call center, or office they go to for help.

Department of Agriculture, Office of Small and Disadvantaged Business Utilization (OSDBU) The mission of the OSDBU is to provide maximum opportunities for small businesses to participate in USDA contracting activities by establishing and attaining small disadvantaged business program goals.

Department of Commerce The Commerce Department’s mission is to create the conditions for economic growth and opportunity by promoting innovation, entrepreneurship, competitiveness, and stewardship.

Department of Labor, Occupational Safety and Health Administration (OSHA) OSHA’s mission is to assure the safety and health of America’s workers by setting and enforcing standards; providing training, outreach, and education; establishing partnerships; and encouraging continual improvement in workplace safety and health. The U.S. government’s official Spanish language web portal.

Service Corps of Retired Executives (SCORE) SCORE is a nonprofit organization that is federally supported to provide free business mentoring and low-cost training to aspiring and existing business owners.

Small Business Administration (SBA) The mission of the SBA is to maintain and strengthen the nation’s economy by enabling the establishment and viability of small businesses and by assisting in the economic recovery of communities after disasters.

Small Business Development Centers (SBDCs) SBDCs, which are located across the U.S., are hosted by leading universities and state economic development agencies. SBDC advisors provide free business consulting and low-cost training services including business plan development, financial packaging and lending assistance, exporting and importing support, procurement and contracting aid, and health care guidance.

Social Security Administration The Social Security Administration is the nation’s primary income security agency. It pays retirement, disability, and survivors benefits to workers and their families; administers the Supplemental Security Income program; and issues Social Security numbers.

State and Local Contacts The State and Local Government on the Net directory provides convenient one-stop access to the websites of thousands of state agencies and city and county governments.

U.S. Department of Labor (DOL) The DOL administers a variety of federal labor laws, including those that guarantee workers’ rights to safe and healthful working conditions, a minimum hourly wage and overtime pay, freedom from employment discrimination, unemployment insurance, and other income support.

U.S. Equal Employment Opportunity Commission (EEOC) The mission of the EEOC is to eradicate employment discrimination at the workplace. The U.S. government’s official Web portal.

Herman and Company CPA’s proudly serves Bedford Hills NY, Chappaqua NY, Harrison NY, Scarsdale NY, White Plains NY, Mt. Kisco NY, Pound Ridge NY, Greenwich CT and beyond.

Small Business Health Care Tax Credits

  • Westchester NY accountant Paul Herman has all the answers to your personal finance questions!

    Small Business Health Care Tax Credit

    Changes to the SBHCTC beginning in 2014:

    • The credit increases to 50 percent for small businesses and 35 percent for tax-exempt employers.
    • You must purchase insurance for your employees through SHOP.*
    • The credit is only available to you for 2 consecutive years.
    *SHOP, or Small Business Health Options Program, is the Health Insurance Marketplace for small business and tax-exempt employers.
    Small Business Health Care Tax Credit for Small Employers
    Federal budget sequestration required cuts will reduce the refundable portion of the Small Business Health Care Tax Credit for certain small tax-exempt employers under the Internal Revenue Code section 45R. The refundable portion of the claim will be reduced by 8.7 percent.
    Review additional information about the effect of sequestration on the Small Business Health Care Tax Credit to see if this has potential impact for you.

    tax-credit-2Small businesses and tax-exempt organizations may be eligible for a valuable tax credit – the Small Business Health Care Tax Credit. The credit applies to small employers who offer health insurance coverage for the first time or maintain coverage they already have, and is specifically targeted for those with low- and moderate-income workers. In general, the credit is available to small employers and tax-exempt organizations that pay at least half the cost of single coverage for their employees.

    If you’re an employer who may be eligible for the Small Business Health Care Tax Credit, you can use the Small Business Health Care Tax Credit Estimator. The credit is designed to encourage small businesses to offer health insurance coverage for the first time or maintain coverage they already have. For some employers and tax-exempt organizations, this could save thousands of dollars by providing a credit against income tax (a refundable credit for certain tax-exempt organizations).

    For tax years 2010 through 2013, small businesses can claim up to 35 percent, and tax-exempt organizations can claim up to 25 percent. For tax years 2014 and later, there are changes to the credit.

    • Small businesses can claim up to 50 percent and tax-exempt organizations up to 35 percent.
    • You must purchase insurance for your employees through the Small Business Health Options (SHOP) Marketplace.
    • The credit is only available to you for two consecutive years.

    This tax credit is included in the Patient Protection and Affordable Care Act approved by Congress in early 2010, and signed into law by President Barack Obama. This credit is one of the first provisions of the bill to go into effect. Eligible small businesses and tax-exempt organizations can claim the credit as part of the general business credit starting with the 2010 income tax return they file in 2011.


    Westchester NY accountant Paul Herman of Herman & Company CPA’s is here for all your financial needs. Please contact us if you have questions, and to receive your free personal finance consultation!

    Herman and Company CPA’s proudly serves Bedford Hills NY, Chappaqua NY, Harrison NY, Scarsdale NY, White Plains NY, Mt. Kisco NY, Pound Ridge NY, Greenwich CT and beyond.

Business Forms of Organization: FAQs

Scarsdale tax preparers at Herman & Company CPAs have all the answers to your personal finance questions!

Business Entity and Tax FAQs from Scarsdale NY accountant

Don’t let your business be a gamble when it comes to your taxes.

The following are FAQs our Westchester accounting experts regularly receive regarding business forms of organization and how to approach them. 

▼ Will some types of business organization or entity limit my liability to business creditors?

Yes. Limited liability companies (LLCs), limited partnerships, limited liability partnerships (LLPs) and corporations are the most common forms. General partnerships and sole proprietorships don’t restrict owners’ liability, whereas limited partnerships limit liability of some partners (such as limited partners) and not others (like general partners).

▼ How can I avoid the “corporate double tax” and what exactly is it?

A “corporate double tax” happens when a business corporation (or an entity that is treated as a business corporation for tax purposes) pays a federal tax on its income, and then its owners pay another tax as they collect corporate profits. The “entity level tax” is the tax on the corporation and so an entity taxed in this way is called a “C corporation” or C corp.

Here are ways to avoid the double tax:

  • Become an S corporation, which doesn’t change the nature of the business under state business law but rather eliminates federal tax at the corporate level.
  • The second tax, which is on the owners, can be deferred by suspending profit distributions to corporate owners.
▼ For tax purposes, what type of business entity is best?

Each business is different, although to save on overall taxes a “passthrough” entity is generally best, as it eliminates tax at the entity level. Owners of passthrough entities are taxed on the profits of the entity that they own. Owners are able to make tax deductions for startup and operating losses, against the income from other businesses or investments.

▼ What entities are considered to be “passthrough”?

The leading “passthrough” forms are limited partnerships, LLCs, LLPs, S corps, sole proprietorships and general partnerships. You have a lot of power over whether or not your entity is treated as a passthrough for federal tax purposes.

If you have a partnership of any type or a limited liability company, it is possible to choose if your business functions as a corporation or partnership for tax purposes. This is called the “check-the-box” system by tax and business advisors. You can qualify to have it treated as a passthrough by choosing S corp. status if your entity is incorporated or if you elect to be treated as a corporation.

This decision is binding. This means if you select one entity one year and a different one the next, you will have to pay the taxes as though last year’s entity was sold and use those profits towards this year.

▼ To avoid double tax and limit my liability, which entity should I choose?

Assuming you don’t select to have them function as corporations, the following types will avoid double tax and limit liability: LLPs, LLCs, and limited partnerships (only for the limited partners). An S Corporation is usually another option. If you are a sole owner, the only option is an S Corp (or in certain states, LLCs).

▼ Why are limited liability companies (LLCs) so great?

Limited liability and passthrough tax treatment are both combined in LLCs. This provides benefits that are unavailable from S Corps. The main benefits are:

  • The possibility of greater loss deductions.
  • Tax benefits can be disproportionately distributed among owners.
  • When a new owner becomes a member of the business, or when allocations are given to owners in business liquidation, taxes are avoided or reduced.

LLCs are sometimes permitted to have a single owner – laws vary by state. If permitted, the owner has the opportunity to elect to be under the check-the-box rules.

A good alternative where sole ownership LLCs aren’t permitted is an S Corp. This structure will also defer tax, in comparison to LLCs, when a corporate giant is buying out the business.

▼ If my business is a professional practice, what are the special conditions?

A major concern is the limitation of liability, especially malpractice liability. Against the liability of your own malpractice, there is no entity that will protect you. For protection against liability for malpractice of co-owner professionals in the firm and possibly for other debts, Professional Limited Liability Companies (PLLCs), LLCs, and LLPs, when accessible for professional practices, should be used. Depending on the state law, Professionals Corporations (PCs) might not offer protection from liability for a co-owner’s malpractice.

LLPs, PLLCs, and LLCs all have about the same tax rules that govern them while those for PCs are a little more liberal.

 If I change my form of business organization, what are the federal tax consequences?

A change of entity is an event that may need to be carefully planned and implemented to avoid a taxable event. It also may have significant future tax implications. You should consult with a professional before making any changes or decisions to your business organization.

 Is it necessary for state business entity rules to follow federal tax rules?

Bear in mind the differences between state tax law and state business law. Whatever tax status you select for your entity beneath the federal check-the-box system, keep in mind that you may be considered a different type of entity for state business law purposes. This means that if you choose corporate tax treatment for a partnership, it will not necessarily bring corporate limited liability.

A state normally treats the entity selected under federal check-the-box as the entity acknowledged for state tax purposes, but this is not always the case.

The law of a state may agree to passthrough status for an entity like an S Corp or an LLC, but still enforce some sort of tax on the entity.

Our Scarsdale tax preparers here at Herman & Company CPA’s are here for all your financial needs. Please contact us if you have questions about these provisions or any other tax compliance/planning issues, and to receive your free personal finance consultation!

Herman and Company CPA’s proudly serves Mamaroneck NY, Armonk NY, Rye NY, Scarsdale NY, Tarrytown NY, Chappaqua NY, Greenwich CT and beyond.

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Any U.S. tax advice contained in the body of this website is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.