The information you need to qualify for the financial incentives you deserve.
As we celebrate Women’s History Month in this weekly finance column you may be wondering, are there any tax benefits to having my own business as a women? Unfortunately, while there are benefits for businesses owned by women those benefits are not executed or administered through the Internal Revenue Code. While the United States Tax Code does not discriminate on the basis of gender, there are plenty of opportunities through other government agencies in which a woman owned business can receive benefits, especially minority owned.
To qualify as a Women-Owned Small Business (WOSB), your business must:
- Meet small business size standard for your business’s primary NAICS code and contract
- Be at least 51% owned by women who are U.S. citizens
- Be managed day-to-day by a women
- Have long-term decisions made by a women
- Have a woman holding the highest officer position in the company
- This woman must work at the business full-time during normal working hours
(Although, there’s no minimum amount of time the business must be operational)
The Necessary Requirements
To qualify as an Economically Disadvantaged Women-Owned Small Business (EDWOSB) your business must meet all the requirements above, and all its owners must meet the following requirements below:
Your personal net worth must be less than $750,000, excluding:
- Funds reinvested in an IRA or other retirement account
- Your ownership in your business and your primary personal residence
- Transferred assets within two years if to or on behalf of immediate family member for select purposes
- Adjusted gross income average over the last three years is $350,000 or less, excluding: income reinvested or used to pay business taxes
- Fair market value of all your assets is $6 million or less
If you are a woman who owns a business and your company is either a partnership or an S-Corporation your tax filing deadline is March 15, 2021. If your return is not ready to be filed, file an extension and save yourself at least 25 percent in penalties.
Invest in Your Community By Investing in Yourself: Start Today!
Finally, there are so many of you reading this article who have been wanting to start your own business, passion or project but year after year you can never seem to get started. What are you waiting on? What’s really holding you back? Don’t you know that businesses owned and operated by women generated at least $1.9 trillion in sales as of 2019? If that numbers seems familiar it is because it is the same size as the stimulus package recently passed by Congress.
Furthermore, At least 27 percent of women owned businesses are in accommodation and food services, 24 percent are in the information business sector and 22 percent are in the professional and technical services industry. Surely, your gifts and skills fit somewhere in there! Remember – If you don’t value your time, neither will others. Stop giving away your time and talents. Value what you know and start charging for it!