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How to choose a fiscal year for business? A fiscal year, typically also known as the financial year or tax year or accounting year, consists of a twelve-month time frame that your accountant and the tax authorities (IRS) refer to for your financial reporting when you don’t adopt the conventional calendar year reporting.   A calendar year commences and ends from 1 st January to 31 st December.   However, a fiscal year is determined by you, so long as it is a twelve-month period.   In this article, we shall evaluate how to determine selection of a fiscal year for your business, also how your choice can affect your business and whether you would be better applying a calendar year only. Traditionally, any small business would use a fiscal year for financial reporting for a couple of reasons primarily, firstly because they are in the process of fund raising via investments or loans and secondly, they are to file their first tax reporting and have the option to register a...

Due dates of US Federal Income Tax Deadlines in 2021 Today we shall enlist the crucial due dates for filing your 2020 tax returns and tax payments. Individually, 15 th April is the official deadline to file your federal income tax return every year, however the same is moved to the subsequent business day if 15 th April is a Saturday, Sunday or any declared Public holiday. Recently, with the ongoing issues related to Covid19, the IRS has delayed the due date for filing a personal income tax return to 17 th May 2021.   Thereby also extending the deadline for any tax owed without applicability of late fees or interest penalties.   However, this extension does not affect the quarterly estimated tax payments that are due on 15 th April for business owners and independent workers for 2021. Let’s look at the deadlines in Calendar Year 2021 for 2020 Returns: Individual income tax returns: This is usually on April 15, but because of the extension, the filing deadline fo...

  US Paycheck Protection Program 2021 – Round 2 Here’s all what you need to know! On December 21, 2020, the US Congress passed a new and additional Paycheck Protection Program (PPP) relief package – PPP-2 – for US$ 900 Billion for aiding Small businesses and individuals impacted by Covid-19 and who couldn’t apply during round 1 of the PPP or still continue to have a business that’s impacted by the pandemic.   Thus, PPP-2 loans will be made available to both first-time qualified borrowers as well as to those borrowers who previously received a PPP loan earlier in 2020.   So let’s understand briefly all what you need to know: -        You are eligible to apply for your first PPP loan in 2021 even if you didn’t apply for it in 2020 earlier. -        Even if you received a PPP loan in 2020, you are eligible to apply a second time provided certain criteria check out. -        ...

What is Tax Audit? – Untangling the Mystery   A lot of new age businessmen or entrepreneurs have this curiosity often as to what is tax audit.   It’s a term that often worries young start-ups and they are concerned about its applicability when growing a business.   The fact is that the income tax rules in India circling tax audit are complex indeed and that is the reason even some seasoned business owners fail to till date to understand its applicability.   In this article however we shall try to untangle and simplify the answer to today’s question.   We shall also discuss about its objectives, its applicability and consequence to failure in completing the same, if applicable. Before we go into – What is tax audit? Let’s understand what an audit is in general with respect to business finances and financials.   Dictionary wise an audit is an official inspection of an organization’s accounts which is summarized, commented and opined upon through a report,...

How to form a Private Limited Company in India? As new ideas to do business keep emerging, the importance of having the right form of business entity becomes a crucial element prior to initiating any commercial activity.  Indian laws offer a wide and complex variety of vehicles to do business like Sole-proprietorships, Hindu undivided families (HUF), Partnerships, Limited liability partnerships, Private limited companies and Public limited companies.  The choice of your business entity form depends on the volume, scale, complexities and parties involved and one must do a thorough analysis beforehand to determine the choice to be opted for as changing business entity form of an ongoing business at later stages, although doable, can be cumbersome.  It is best to consult a Chartered Accountant firm and discuss your business plans to help arrive at the right decision. In today’s article, we shall deal briefly with the formational aspects of a Private limited company in India...