BOSTON (CBS) – What are small businesses?
- Small businesses are defined as having less than 500 employees
- There are almost 28 million small businesses in the U.S.
- 22.5 million are self-employed businesses with no additional payroll or employees (these are called nonemployers)
- Over 50% of the working population (120 million individuals) works in a small business
- 52 percent of all small businesses are home-based
- To classify as a “nonemployer” business you must have annual business receipts of $1,000 or more and be subject to federal income taxes
- Approximately 75% of all U.S. businesses are nonemployer businesses
- Nonemployers had average revenues of $44,000
- 19.4 million nonemployer businesses are sole proprietorships
These are the individuals we will talk about this week. The really small businesses, the one person firm.
We have a huge underground economy in this country. It’s a cash only economy. Individuals think that they will have more money in their pocket if they don’t share it with Uncle Sam.
That may be true, but if you don’t pay taxes whether they are income taxes, social security or Medicare taxes you will not be eligible for future benefits.
I am not recommending anyone pay more taxes than they should, but you do need to report all of your income and then look for the deductions you are eligible for as a self-employed individual.
The IRS has a section for small businesses on their website and they do offer some good advice.
They even have links to a tutorial on writing a business plan. Request publication 583, Starting a Business and Keeping records and publication 334, Tax Guide for Small Business to get you off on a good start. Both can be downloaded from the IRS’ website.
Another helpful government resource for the small business owner is the Small Business Administration; they have key information on running your business and where to get financing. And they offer webinars and consulting as well as seed money.