Institute for Entrepreneurship Entrepreneurial Education Partner
"The worst time to come to me is January and February and say, 'Chris, this is what I did'..." - Chris Brown, accountant
Yesterday, Chris Brown of Brown & Associates Accounting and Jackson-Hewitt spoke to Illini Prairie CEO about taxes and small businesses.
Brown says, "There's a lot of stuff you hear online, and it's wrong." He was referring to some recent tax advice making the rounds on social media. As he said, the best person to get tax advice from is a tax professional, who stays up to date on tax code changes.
Brown walked us through:
- Form I9: Employment Eligibility Verification / Department of Homeland Security (for when our businesses grow and we need to hire employees)
- IL-W-4: The new Illinois Withholding Allowance Worksheet (The amount of taxes employers pre-pay has decreased since Covid, so the number of employees receiving tax refunds has decreased.)
- W-4: Employee's Withholding Certificate (a form most of us have already encountered)
And the tax form we are most likely to encounter for our small business:
- Schedule C (Form 1040): Profit or Loss From Business (Sole Proprietorship)
Brown also explained:
- dependents (claiming)
- cash vs. accrual accounting methods
- employees vs. independent contractors
- cost of goods sold
- inventory
- depreciation vs. "expense it"
- self-employment tax
- gross vs. net income
Accounting may not be edge-of-your-seat-excitement, but we found Brown's presentation very worthwhile, and we had several questions answered.
Thank you, Chris Brown, for taking time out of your busy tax prep season to speak with us.
