Entrepreneurial

Now is the time to think about selling your small business

– Domenic Rinaldi is president and managing partner of Chicagoland Sunbelt, a business brokerage firm that focuses on helping people buy, grow and sell businesses in Chicago and the surrounding Midwest area. The views expressed are his own. –

There were many brokers, accountants and wealth mangers advising clients to sell their business last year in anticipation of the Bush-era tax laws expiring on Dec. 31, 2010. It appeared until very recently that both the capital gains and ordinary income tax cuts would expire on that date, leaving owners subject to at least a 20-percent tax increase on their assets.

Those who are planning to sell in 2011 may be breathing a sigh of relief now that the tax cuts have been extended for another two years. But while two years may seem like a long time, it’s important for owners to begin considering when the right time for them to sell might be. Eventually, these taxes will expire and after this two year extension, we may never see rates this low again.

Unfortunately, the recent recession has had a significant impact on the health and bottom lines of many small businesses and some business owners have no choice but to wait for the economy to turn around before considering a sale.

The good news is that many small businesses appear to be getting healthy again so these next two years may be the prime time to sell. In addition, we are experiencing a period of very high buyer demand – there is a large contingent of buyers, with money, chasing very few deals. This is especially true for baby boomers who may be looking to retire in the near future.

from Reuters Money:

3 ways to cope with year-end tax uncertainty

USA-TAXES/The end of the year is in sight. But with taxes still in flux, it’s easy to succumb to your own worst instincts and just block out all the noise: After all, how can you even think about your own year-end tax planning when you don’t know what the rules are, and may not know till after the end of the year?

“People can get paralyzed, and not take any action,” says Rich Kohan, principal of personal financial services at PricewaterhouseCoopers.

With December rapidly approaching, there’s very little time for Congress to act on the Bush tax cuts, which are slated to expire at year-end, increasing the risk that nothing will happen before that date. Democrats would like to see the tax cuts extended for couples who make less than $250,000 (or $200,000 for singles), while Republicans want them kept in place for everyone, including the richest Americans.

from Reuters Money:

1099 tax rule may bring big pain to small business

The new rules on 1099 forms, which were attached to the health care bill and are set to go into effect in 2012, call for all businesses, no matter how small, to file 1099 forms for goods as well as for services. That sounds like a technicality, but it’s got small business up in arms.

Here’s why it matters, and what you need to know.

rWhat exactly is the rule, anyway?

The new rule requires all business to file 1099 forms for goods as well as services, if those goods cost over $600 annually (the current threshold). It also gets rid of the distinction between corporations, which previously did not need to receive 1099s, and unincorporated entities, which did. The rule is slated to go into effect in 2012.

Who will it affect?

It will affect all businesses, including sole proprietors, consultants, self-employed people and freelancers, who are considered businesses for tax purposes, but may not think of themselves that way. It also will apply to charities and other tax-exempt organizations. The National Taxpayer Advocate, based on Internal Revenue Service data, figures that it will affect 26 million sole proprietorships, 4 million S corporations, 2 million C corporations, 3 million partnerships, 2 million farms, 1 million charities and other tax-exempt organizations, and likely more than 100,000 federal, state and local government entities. All told, that’s more than 38 million taxpayers and taxpaying entities.

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