Accessing Your Colorado Tax Record with Revenue Online

Accessing Your Colorado Tax Record with Revenue Online

by | Aug 22, 2017 | Business News, Business Tax Law

Accessing Your Colorado Tax Record with Revenue Online

Colorado small businesses benefit from a variety of initiatives aimed at making it easy to fuel the entrepreneurial fire, such as the easy to use website for the Colorado Secretary of State, where you can accomplish a huge variety of business startup tasks with just a few clicks of your mouse! Another excellent resource for individuals operating small businesses in the state of Colorado is called Revenue Online – a website managed by the taxation division of the Colorado Department of Revenue. Since this year’s first quarter tax filings are in the rear view mirror, this is a good time to think about looking ahead and making access to our Colorado tax records easier. How? Once you have filed your first tax return in the State of Colorado, you should consider signing up for an account to gain easy access to your tax records and a broad variety of services.

Things You Can Do with a Colorado Revenue Online Account

This is just a partial list; visit the Revenue Online site to see all of the tasks and information you can access with an account: For Individuals Taxpayers who create a Login ID will have access to their Colorado tax accounts. Taxpayers will have the ability to view their return history, view previous correspondence sent by the Department, and make electronic payments. You can also:
  • Amend a Return
  • Change Your Address
  • File a Protest
  • View Account Balances
  • View Your Payments
  • View Your Letters
  • View and Print Your Returns
For Businesses Businesses that create a Login ID will be able to file and pay a variety of taxes including Sales Tax, Withholding Tax and Corporate Income Tax. Plus
  • File or Amend a Return
  • Change Your Address
  • File a Protest
  • View Account Balances
  • View Your Payments
  • View Your Letters

Signing Up for a Colorado Revenue Online Account

For the most part, gaining access to your tax account via Revenue Online is a simple process, however, you need to be aware of an exception with regard to individual income tax accounts. For security reasons, you cannot obtain access to individual income tax accounts until you first acquire what is called a Letter ID number. The Letter ID number is exactly what it sounds like – an ID number associated with a letter from the Colorado Department of Revenue. If you have a recent letter from the Department, you can simply use the Letter ID number located in the upper right corner the letter – it doesn’t matter what the topic of the letter is. If you do not have a recent letter, you may request a Letter ID number on the Revenue Online website under “Additional Services” and “Request a Letter ID” (see image below). Revenue Online Services screenshot A letter containing the “Letter ID” number will be sent by postal mail to the address on record with the Department (so make sure yours is current before you submit the request!). It might take up to 10 business days to receive the “Letter ID” letter, but once you have it, you will be able to create a Revenue Online account for your individual income tax account, which is important if you are a single member Limited Liability Company because as such you will have filed your business taxes as part of your personal return. When you are ready to go, visit Revenue Online in your computer Web browser at www.Colorado.gov/RevenueOnline. To sign up for you account, you will need:
  • Taxpayer or Business Name
  • Tax ID Number, such as Social Security Number or ITIN from the IRS; Federal Employer ID Number (FEIN) or a Colorado Account Number (CAN) assigned by the Department
  • Address associated with your tax account
Once you have completed the registration process, you will receive an email that tells you whether you were able to get access to the account. Make sure to check your Junk email folder if you do not see the email in your Inbox – the email Subject line will say: Colorado Department of Revenue – Revenue Online Account Access Complete and will contain an Authorization Code that you will use the first time you log in, after which you will create your own password for the account. If you need help with your business taxes or business tax planning, contact me, Elizabeth Lewis, at the Law Office of E.C. Lewis, P.C., home of your Denver Small Business Lawyer. Phone: 720-258-6647. Email: elizabeth.lewis@eclewis.com

Contact Us Today

Law Office of E.C. Lewis, P.C.
Your Denver Business Attorney

LICENSED IN COLORADO AND NORTH CAROLINA

Mailing Address:

501 S. Cherry Street, Suite 1100
Denver, CO 80246
720-258-6647
Elizabeth.Lewis@eclewis.com

Online at:

Real Estate Services for Business Owners

Elizabeth Lewis provides the following real estate law services to small and medium sized business owners in Denver and throughout Colorado:

  • Commercial real estate purchases
  • Legal review of commercial real estate leases
  • Protecting your assets
Setting Up Your Home Business in Denver

Setting Up Your Home Business in Denver

by | Jun 27, 2017 | Business News, Home Business

Setting Up Your Home Business in Denver

A home business is characterized by its location, size, and number of employees. Typically, it is a small business operated out of a residence with one or very few employees who are often family members. You may work from a home office with an outside product or service, or you may have a designated space to showcase your product and accommodate clients. Regardless of your model or vision, running a home business takes a lot of time, patience, and research. There are federal, state, city, and even neighborhood guidelines to consider as well as specific tax rules. And, when you think you have a handle on the intricacies of operating a home business, there can be surprises or issues you never knew existed. A small business attorney will assess your home business structure and help you stay compliant with zoning and tax regulations, minimize your liability, and maintain a clear and competitive identity. This post will cover four major areas for small home business owners.

  1. Managing Operations From Your Home
  2. Regulations for Establishing a Home Business
  3. Taxes Rules and Deductions as a Home-based Business Owner
  4. Validate Your Home Business from the Start

1. Managing Operations From Your Home

Despite the many challenges and pitfalls of owning a home business, you are in very good company. According to the U.S. Small Business Administration, more than half of all U.S. businesses are based out of an owner’s home. Well-known brands like Apple, Hershey’s, Mary Kay, and Ford Motor Company all started out as home-based businesses. But, before you daydream about your empire or try to decipher all of the zoning and tax laws, you must consider some basics of running a home-based business. Can you see yourself managing your operations from your home? Do you have the right space? What will it cost to reconfigure the space? Is your family on board? Will work-life balance be a problem? It is important to have a designated area for your business operations so that your entire home does not become a constant reminder of work to be done. A small business attorney will help with your home business formation from R&D to optimizing your success and work-life balance.

2. Regulations for Establishing a Home Business

Once you have determined that a home setting will support your business, there are numerous legal guidelines you must follow. Denver has specific ordinances, limiting the type of business that can be operated from a home as well as the impact it has on surrounding residences. The permitting process for establishing a home business includes a zoning permit. Even if you are a one-person day care, if you are doing business from your home and use your home address as a business address, you need to obtain a zoning permit. These set the standards for size and location of structures and appropriate uses for your property. Be sure your intended business is in compliance with the Denver Zoning Code. In the event construction is required to convert your home work space, Denver requires inspection and permitting for building code standards to protect and ensure public welfare. This is conducted after zoning permits have been issued. Some home businesses may require additional permits, licenses, or inspections. Child care and food preparation businesses, for example, require a business license. Your attorney will keep you in compliance with local regulations, including home-owners association regulations, as well as ensure you have the right insurance coverage.

3. Taxes Rules and Deductions as a Home-based Business Owner

In addition to zoning requirements, you are subject to intricate tax rules and deductions as a home-based business owner. You are allowed to deduct part of your real estate taxes, mortgage interest, rent, utilities, insurance, depreciation, and certain other expenses. These deductions only pertain to the portion of your home designated as a place of business. If you want to maximize your deductions, it is essential to maintain accurate records of how and where you conduct business in the home. A small business attorney will determine if you should change the way you do business in order to save money on your taxes and decrease your liability in the case of accidents.

4. Validate Your Home Business from the Start

There are many perks to having a home business. Working from home affords you more versatility and flexible schedules, which also helps to entice the right employee(s) if you are looking to expand your business. A home office can add thousands to the price point of your home – a great asset in Denver’s housing market. So, with all of the plans, permits, forms, insurance, and licenses in place, your home business will be up and running. How, then, do you instill confidence in your customers? There are a few easy ways to help validate your home business from the start. Use a physical street address instead of a P.O. Box; this will also increase your search engine rankings. Do not underestimate the impact of printed marketing materials. Something as simple as a business card can serve as a physical reminder of your business. Your online presence is, of course, extremely important. Engaging new and current customers via social media or blog post on your website will legitimize your business further. These are great tools for you and your customers to share success stories and great experiences. Finally, collaborate with the right people who may have expertise where you do not. A small business attorney will partner with you to create the best possible business formation and see you through the process and growth of your home business.

If you need help with your home business, contact me, Elizabeth Lewis, at the Law Office of E.C. Lewis, P.C., home of your Denver Business Lawyer. Phone: 720-258-6647. Email: elizabeth.lewis@eclewis.com

Contact Us Today

Law Office of E.C. Lewis, P.C.
Your Denver Business Attorney

LICENSED IN COLORADO AND NORTH CAROLINA

Mailing Address:

501 S. Cherry Street, Suite 1100
Denver, CO 80246
720-258-6647
Elizabeth.Lewis@eclewis.com

Online at:

Real Estate Services for Business Owners

Elizabeth Lewis provides the following real estate law services to small and medium sized business owners in Denver and throughout Colorado:

  • Commercial real estate purchases
  • Legal review of commercial real estate leases
  • Protecting your assets

3 Important Tax Rules for Relocating Your Small Business

by | May 24, 2017 | Business Formation

3 Important Tax Rules for Relocating Your Small Business

There are a lot of questions you want to ask (and probably have an attorney answer) before you relocate your small business from one State to another. This blog will alert you to three important tax rules for relocating your small business:

  1. the six potential F Reorganization requirements
  2. the relocation rules for your specific form of business
  3. the need (or not) to obtain a new Employer Identification Number (EIN)

Understand the Six Requirements for F Reorganization

Warning – the six requirements are not written in plain English and can be a little daunting. Of all the rules you need to understand, making sure you understand the six requirements for an F reorganization and have met the criteria may be the most important. Why? Because in the case of F Reorganization, the “F” stands for free, as in tax free. Your move may subject you to unnecessary tax burdens if it doesn’t meet the six requirements. I am supplying portions of the IRS code describing each of the requirements below – if you don’t enjoy reading legalese, skip these bullets and go on to the next section.

  • Immediately after the Potential F Reorganization, all the stock of the Resulting Corporation must have been distributed (or deemed distributed) in exchange for stock of the Transferor Corporation in the Potential F Reorganization.
  • Subject to certain exceptions, the same person or persons own all the stock of the Transferor Corporation at the beginning of the Potential F Reorganization and all of the stock of the Resulting Corporation at the end of the Potential F Reorganization, in identical proportions.
  • The assets and attributes of the Resulting Corporation [must be limited] immediately before the transaction)
  • The Transferor Corporation [must be liquidated]

The final two requirements are in place to make sure the resulting reorganization qualifies as a “Mere Change” – simply put, your move really is about moving the business and not about a clever means of evading actual tax obligations.

  • Immediately after the Potential F Reorganization, no corporation other than the Resulting Corporation may hold property that was held by the Transferor Corporation immediately before the Potential F Reorganization, if such other corporation would, as a result, succeed to and take into account the items of the transferor corporation described in section 381(c).
  • Immediately after the Potential F Reorganization, the Resulting Corporation may not hold property acquired from a corporation other than the Transferor Corporation if the Resulting Corporation would, as a result, succeed to and take into account the items of such other corporation described in section 381(c).

Know the Rules for Moving Your Particular Business Form

When you are ready to move your business, you need to know the rules for moving your particular business form to a new state – these rules will vary depending on the form your business operates under, and some are more straight forward than others. The SBA gives a good overview of the rules, but advises, as do I, to talk over your move with an attorney, and to understand clearly the steps you will be expected to take as an LLC, Corporation, sole proprietor, or partnership.

It is likely that you chose your form of business for the tax advantages it offers. If you haven’t had an attorney review your current form of business to make sure you are getting the best tax advantage and legal protections, consider doing so before you make your move. Tax law changes over time. Understand what changes you may want to make before moving your business to a new State with a less than optimal business form.

Obtain a New Employer Identification Number (EIN) – Perhaps

This is another one of those cases where the answer on whether or not you need to obtain a new employer identification number (EIN) is, perhaps. Once again, the need to obtain a new EIN is controlled by your form of business. Gratefully, these rules are a little easier to understand, but they are far from crystal clear. For example, the SBA explains that corporations will not be required to obtain a new EIN if “conversion at the state level with business structure remain[s] unchanged.” If you’re not sure what is meant by conversion, you might not realize that you can keep your EIN.

If you aren’t sure whether or not you need a new EIN after a move, or want want help understanding these 3 important tax rules for relocating your small business, contact me, Elizabeth Lewis, at the Law Office of E.C. Lewis, P.C., home of your Denver Small Business Lawyer. Phone: 720-258-6647. Email: elizabeth.lewis@eclewis.com

Contact Us Today

Law Office of E.C. Lewis, P.C.
Your Denver Business Attorney

LICENSED IN COLORADO AND NORTH CAROLINA

Mailing Address:

501 S. Cherry Street, Suite 1100
Denver, CO 80246
720-258-6647
Elizabeth.Lewis@eclewis.com

Online at:

Real Estate Services for Business Owners

Elizabeth Lewis provides the following real estate law services to small and medium sized business owners in Denver and throughout Colorado:

  • Commercial real estate purchases
  • Legal review of commercial real estate leases
  • Protecting your assets

Preparing Quarterly Tax Payments for Your New Colorado Small Business

Preparing Quarterly Tax Payments for Your New Colorado Small Business

by | Mar 29, 2017 | Business News

Preparing Quarterly Tax Payments for Your New Colorado Small Business

If you are a relatively new Colorado small business, and the January deadline to pay estimated taxes just snuck up on you, this post is for you.

You or your bookkeeper are probably using software to keep track of your sales and income – but knowing what you brought in is not the same as knowing what you owe in taxes. Plus, for small business owners, paying taxes is not an affair you sweat out every year in April – your estimated taxes are due four times every year, so you want the process of estimating what you owe, plus having the funds on hand to meet your obligations to be as simple as possible. Tax planning is always an important part of your overall business plan for the coming year, so take some time now, before the year gets away from you, to make sure you are ready for what lies ahead.

Making Your Small Business Estimated Tax Payments

If you already have a year of business ownership in your rear view mirror, then the process of making your small business estimated tax payments can be a bit more simple for you, but you can still get caught owing much more than you thought you did when the final calculations are made in April of next year. What’s the best way to stay on top of what you will owe? If you have ever had trouble meeting your tax obligations, or failed to run certain calculations correctly, you already know this: hire a qualified tax professional to help you stay on top of what you will owe. Estimated taxes are actually designed to keep you out of trouble, so having someone help you make those estimations correctly is a smart thing for any small business owner to do. Plus, you can write of the expense of having help!

If on the other hand, your small business has only been around for a couple of months, trying to figure out what taxes you might owe on this year’s income based on last year’s income is going to be difficult. It’s true that owing less than $1000 in taxes at the end of the year will mean that you don’t need to file quarterly taxes, but what if you do so well that your start up expenses and other allowed expenses during the course of the year don’t reduce your taxable income as much as you expect?

Try Calculating Estimated Payments Yourself

Here’s a litmus test for you: try calculating estimated payments yourself. If you can do it, put them on your calendar each quarter, and do them yourself (but consider having a tax professional review and submit them for you). If they are confusing, or just take more time than you have to give, use the list of questions provided at the end of this blog to find and hire someone to help you. Here are the relevant forms:

  • Individuals, including sole proprietors, partners, and S corporation shareholders, generally use Form 1040-ES (PDF), to figure estimated tax.
  • Corporations generally use Form 1120-W (PDF), to figure estimated tax.

Questions to Ask a Prospective Tax Preparer

    When you hire a tax professional for your small business, take the time to find someone who is qualified – the IRS offers the following list of questions to ask prospective tax preparer.

  1. Has the preparer worked with businesses similar to yours in size and type?
  2. Is the preparer familiar with your particular line of business?
  3. Does the tax preparer offer electronic filing?
  4. [Will he or she] deposit your tax payments electronically?
  5. [Ask] what services are included in the preparers’ fees.
  6. If the IRS examines your return, what is their policy on assisting you?
  7. You may want to ask for references, just as you would for any professional service.
  8. Consider checking with the Better Business Bureau, your State Board of Accountancy for CPAs, the State Bar Association for attorneys, or the IRS Office of Professional Responsibility for enrolled agents.
  9. Avoid any paid preparer who refuses to sign a return they prepared.

If you need a highly qualified tax advisor, or just want a referral to a good tax accountant to help you calculate quarterly tax payments for your new Colorado small business, contact me, Elizabeth Lewis, at the Law Office of E.C. Lewis, P.C., home of your Denver Small Business Lawyer. Phone: 720-258-6647. Email: elizabeth.lewis@eclewis.com

Contact Us Today

Law Office of E.C. Lewis, P.C.
Your Denver Business Attorney

LICENSED IN COLORADO AND NORTH CAROLINA

Mailing Address:

501 S. Cherry Street, Suite 1100
Denver, CO 80246
720-258-6647
Elizabeth.Lewis@eclewis.com

Online at:

Real Estate Services for Business Owners

Elizabeth Lewis provides the following real estate law services to small and medium sized business owners in Denver and throughout Colorado:

  • Commercial real estate purchases
  • Legal review of commercial real estate leases
  • Protecting your assets

Your Small Business, For Sale

by | Mar 21, 2017 | Business News, Misc. Legal Tidbits

Your Small Business, For Sale

If you’re Joyti Bansal, you’re pretty happy these days. Your company, AppDynamics was just purchased by Cisco for 3.7 Billion dollars! As a Colorado small business owner, Cisco might not by eyeing your company for acquisition, but there could still be time when you might want to find a buyer for your business. This post will discuss some legal issues to consider, thoughts on establishing a value, and tips on finding a buyer in preparation for listing your small business for sale.

Legal Issues to Consider When Selling a Small Business

There are a plethora of legal issues to consider when selling a small business, but one of the first you will face is the form of your business. The sale of a C-corp transpires in a much different manner than an LLC. If your company has issued stock, there may be provisions that restrict how that stock can be sold. If you have partners, your contract with them may include clauses about when, how, and to whom you are permitted to sell your share. If you are considering the sale of your small business, one of the first things you should do is obtain a legal review of the business. Your Colorado small business attorney can help you determine how existing contracts or encumbrances will affect the sale, and make suggestions about the best way to proceed.

Other legal issues include the transfer of licenses associated with the business, any leases or equipment contracts you may have, the wording of the sales contract, non-competition concerns, non-disclosure agreements, tax implications, and current contracts with employees and customers. While there are several professionals you will want to enlist as you plan for the sale of your business, your business attorney is probably the first person you should talk to.

Establishing a Value for Small Business

Once your are clear about the legal details of selling your business, you will want to obtain input on the potential value. It is common to value a business as a multiple of annual cash flow. On average, the multiple is two times the annual cash flow, but this figure changes depending on the volume of cash. For example, if the annual cash flow is below $100k, you may get offers slightly below $200k. If it is above $500k, you may see offers closer to $1.5 million. Of course, cash flow valuations are dependent on market considerations – will the business continue to perform well moving forward, or are their indicators that sales may decline?

If cash flow isn’t a good measure of the value of your small business, there are several ways for establishing a value for your small business. The Small Business Administration (SBA) provides some definitions on the most common methods:

  • Capitalized Earning Approach: This method refers to the return on the investment that is expected by an investor.
  • Excess Earning Method: Similar to the capitalized earning method, except that it separates return on assets from other earnings.
  • Cash Flow Method: This method is typically used when attempting to determine how much of a loan the cash flow of the business will support. The adjusted cash flow is used as a benchmark to measure the firm’s ability to service debt.
  • Tangible Assets (Balance Sheet) Method: This method values the business by the tangible assets.
  • Value of Specific Intangible Assets Method: This method compares buying a wanted intangible asset versus creating it.

Your accountant can help you establish a valuation based on these models, and give you feedback on which model makes the most sense for your type of business. In addition to the straight forward number crunching your accountant may be able to discuss other business valuation standards that will help you arrive at a fair price.

Finding a Buyer for Your Small Business

There is an abundance of companies willing to take a percentage of the sale of your business in exchange for help finding a buyer. Not all of them are entirely scrupulous. If you are going to pay for help finding a buyer, you should consider asking your attorney for advice about a reputable firm. If you need help with resources for valuing you small business, or finding a buyer, or if you would like help with a legal review of your business in preparation for listing your small business for sale, contact me, Elizabeth Lewis, at the Law Office of E.C. Lewis, P.C., home of your Denver Business Attorney. Phone: 720-258-6647. Email: elizabeth.lewis@eclewis.com

Contact Us Today

Law Office of E.C. Lewis, P.C.
Your Denver Business Attorney

LICENSED IN COLORADO AND NORTH CAROLINA

Mailing Address:

501 S. Cherry Street, Suite 1100
Denver, CO 80246
720-258-6647
Elizabeth.Lewis@eclewis.com

Online at:

Real Estate Services for Business Owners

Elizabeth Lewis provides the following real estate law services to small and medium sized business owners in Denver and throughout Colorado:

  • Commercial real estate purchases
  • Legal review of commercial real estate leases
  • Protecting your assets