J.K. Lasser's Small Business Taxes 2013: Your Complete Guide to a Better Bottom Line

Introduction

Alert

At the time this book was printed, Congress had not extended numerous breaks for 2012 that had expired at the end of 2011. Check the online supplement in February 2013 at www.jklasser.com or www.barbaraweltman.com to see whether these breaks apply for 2012 returns.

Small businesses are vital to the U.S. economy. They employ half of the country's private sector workforce, and contribute more than half of the nation's gross national product. Historically, small businesses create 65% of all new jobs over the past 17 years.

For the 2010 tax year (the most recent year for statistics), there were 22.4 million sole proprietorships in the United States. About 1 in 9 Form 1040 filers has a sole proprietorship that year. Another 7.1 million filers reported income from partnerships and S corporations. And the numbers of small businesses are growing. The IRS predicts that by 2015, 43 million individual returns will include business income.

Small businesses fall under the purview of the Internal Revenue Service's (IRS) Small Business and Self-Employed Division (SB/SE). This division services approximately 57 million tax filers, including 9 million small businesses (partnerships and corporations with assets of $10 million or less) and more than 41 million of whom are full-time or partially self-employed. The SB/SE division accounts for about 40 percent of the total federal tax revenues collected. The goal of this IRS division is customer assistance to help small businesses ...