WWW.MEDOWSCPA.COM Business & Tax Blog | A Blog for the Self-Employed & Small Business Owners

25.09.2009

Update on the New NYS Tax- Metropolitan Commuter Transportation Mobility Tax

Courtesy of New York State:

FOR RELEASE:
IMMEDIATE, Friday
September 25, 2009

The New York State Department of Taxation and Finance is mailing letters to more than 700,000 employers and self-employed individuals doing business in the 12-county Metropolitan Commuter Transportation District who may be required to pay a new tax, the first payment of which is due November 2.

The MTA region consists of the five boroughs of New York City and the Counties of Dutchess, Nassau, Putman, Orange, Rockland, Suffolk and Westchester.

This new tax applies to employers and is retroactive to March 1, 2009; employers that are school districts beginning September 1, 2009; and self-employed individuals for the entire tax year beginning January 1, 2009.

First payment of the tax – the Metropolitan Commuter Transportation Mobility Tax – is due November 2. The tax was approved as part of the 2009-2010 state budget, which directed the Tax Department to administer its collection. Revenues will be distributed to the Metropolitan Transportation Authority (MTA).

The tax applies to employers who are required to withhold New York State income tax from wages and who have payroll expenses exceeding $2,500 in any calendar quarter.

For the self-employed, the tax applies if you have net earnings in the MTA region that exceed $10,000 for the tax year. This includes partners in partnerships and members of an LLC treated as a partnership.

All employers and self-employed individuals required to pay the tax can file the appropriate tax forms and make payments by going online to the Tax Department’s website at www.nystax.gov. Paper forms and instructions are available by calling 518-485-2392.

About MEDOWS CPA, PLLC: We are a boutique CPA firm located in New York City (Manhattan), dedicated to helping small business owners and individuals. In addition, we also provide CPA services to people outside of the state and country.

Jonathan Medows, CPA

MEDOWS CPA, PLLC

http://www.medowscpa.com

http://taxblog.medowscpa.com

info@medowscpa.com

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23.09.2009

Understanding Sole Proprietorship

A sole proprietorship is an unincorporated business entity that is owned and operated by one individual. Legally, there is no distinction made between the owner and the business. All losses and profits that occur to the sole proprietor are subject to taxation. Also, because all assets of the business are owned by the sole proprietor, all debts of the business are his and he must pay them from his own personal capital. Thus, unlike other business entities, a sole proprietorship has unlimited liability.

Sole proprietorships are by far the easiest kind of business entity to start up, as they are subject to much less paperwork and regulations than other businesses. Also, the sole proprietor has complete control of the business and they take in all profits made from the business. Because they are not incorporated, sole proprietorships don’t have to pay corporate taxes and are not subject to double taxation. The sole proprietor simply pays self-emplyment taxes on the profits they make.

However, there are certain disadvantages to being a sole proprietor. As previously mentioned, sole proprietorships have unlimited liability, and thus are more at risk when it comes to paying debts and confronting other legal matters. As a business becomes successful, the risks around it tend to grow.

If you are unsure whether or not a sole proprietorship would be best for you, contact us. We can help you decide what business entity would best suit your individual needs.