Tax Analysis Homework Content Requirements Most entrepreneurs have great ideas and understand the technology and design that
Question:
Tax Analysis Homework Content Requirements
Most entrepreneurs have great ideas and understand the technology and design that goes into making a new product but often do not have a background in business, let alone taxation. Uzie Nancis, one of your friends from University, has emailed you the following information based on a brief meeting you had with her last week, asking for your input on her questions and concerns about the new venture she started. The product she wants to manufacture is a WaW camera.
Uzies Email January
Hi
Thanks for meeting with me last week. I have so many questions about this growing business and I dont know where to start so I decided to just make a list of things on my mind and hope you are able to point me in the right direction. Here goes:
I started developing the WaW camera for real in June
The WaW camera prototype was produced in January and up to this point Ive invested my own money and borrowed
$ from my parents in January to produce the prototype and apply for two patents; both of which are completed. I havent figured out yet how much to repay my parents but I anticipate going public within the next months so I figure Ill pay them back then. Do you think thats a good idea? Should I be worried about anything? Do I need to document the money they loaned me
I remember something about entities when I took a course in entrepreneurship but was confused. Since my business didnt have
any income in my parents told me they just filed my tax return online using Form Does that sound right to you? I spent all the money I had in my savings account about $ on starting the business! They said I didnt have any revenue so I couldnt deduct any expenses. That doesnt make sense to me
I earned $ in taxable wages in and you know Im single. I got clobbered in taxes and it just doesnt seem fair that I
pay more than everyone else I know. I looked at my last paystub and Form W and the total taxes they deducted from my paycheck were $ Thats ridiculous in tax. I cant afford that much in federal taxes. What can I do to avoid paying in tax? Im getting married in months and I wont be able to afford that.
Ok sorry about that rant. So anyway, in I expect to have about $ in revenues but after the manufacturing and
startup expenses Ive estimated a net loss of $ Next year in I have projected another net loss of $ on projected revenue of $ In I have projected a breakeven in profitability.
My parents keep telling me to hire a CPA but why would I need a CPA now when the company is losing so much money?
Technical Requirements
Your write up response to Uzie should be:
pages in length
Provide advice in response to each of the issues she raised.