Terms
Depreciation
taking a reduction of the value of an asset over a period of time to cover wear and tear
Excise taxes
a tax on certain goods such as fuel
Average investment of 5.94 mm,. 0.05% of startups are funded this way.
Venture Capital
This type of business pays through personal income tax returns.
Federal income taxes
covers medical expenses, lost wages, death, etc...
workers comp
Costs vs. revenues
costs are what is spent and revenues are what is made through sales
Franchise taxes
a tax based on the value of the company
invest the most in startups, average is 23000, which is 38% of startups are funded by family and friends.
friends and family
this is a type of tax that most states and many localities.
sales tax
covers the business from being sued
liability
Pro forma
a document spelling out the expected costs of a transaction
Liabilities
obligations of money that a business owes
average amount invested is 48000, 57% of startups are funded by personal savings of the entrepreneur.
personal savings/credit
this type of tax is what businesses have to pay if they own property. they pay it based on the value of the property.
property tax
covers the unexpected death of the owner of a key person for the business.
life/key person
Short-term or current liabilities
debts that are owed in less than 1 year
Self-employment tax
a tax on the profits of the business that is similar to income tax; to take the place of federal income tax since owners are not employees
small business administration backs just under 100,000 bank loans per year to small businesses.1.43 of startups are funded this way.
banks
most employers have to pay a percentage of there employees wages to cover if they are let go.
unemployment tax
covers medical expenses
health
Payroll taxes
income tax, social security tax, Medicare tax that is reported usually quarterly to the government and are withheld from employees’ paychecks
Worker’s compensation
covers medical expenses, lost wages, rehabilitation and death benefits of employees that get injured, ill or die on the job
fastest growing funding source, average campaign size of 7000.
Crowdfunding
some states charge this based on the value of the company.
franchise tax
these two cover commercial vehicles, and loss of a building.
automobile
property