Growing Your Small Business – Doing Business With the Department of Health and Human Services

In 1953 the Department of Health, Education and Welfare became a cabinet level department in the United States. In 1979 the Department of Education Organization Act split HEW into the Department of Education and the Department of Health and Human Services. HHS is responsible for the health, safety and well-being of residents of the United States. This mandate also extends internationally for cross-border health and safety issues.

HHS administers over 300 programs with a budget of over $737 billion. HHS mission includes a wide range of human issues, including substance abuse, Medicare and Medicaid, childrens health, health disparities, disease prevention and health promotion. It is the largest grant-making department within the Federal Government.

In 1979 the Department of Health and Human Services established the Office of Small and Disadvantaged Business Utilization to develop and implement outreach to the small business community. The Office performs its mission through small business fairs, procurement conferences, trade group seminars, conventions and forums.

The Office of Small Business Development, also called OSDBU, is host to Vendor Outreach Sessions that happen twice monthly. The purpose of these sessions is to introduce and educate vendors on the small business program and to provide them information so that they can effectively market their products and services to HHS.

The Department of Health and Human Services is the only executive agency where Small Business Specialists report to the OSDBU Director. These Small Business Specialists are located within the eleven agencies of HHS.

Every day, these Specialists work with Contracting and Program Office staff, so as to determine the best acquisition strategy; they also work to make their approach unified so that when vendors deal with Health And Human Services, this unity will benefit them.

Currently, HHS does not provide grants or loans to help small businesses get going, but it is in fact the largest organization to make grants within the federal government. It has over 300 grant programs today, and it handles mission-specific topics, which are in turn delegated among the various HHS operating agencies. The Catalog of Federal Domestic Assistance profiles all Federal grant programs; these provide financial assistance and include HHS programs. In addition, specific points of contact for obtaining applications or additional information are also provided.

Vendors who are interested in doing business with Health And Human Services do not have to have any special certification, but instead, the Small Business Administration provides certification to firms under the Business Development Program, the Historically Underutilized Business Zone Program, and the Small Disadvantaged Business Program. Businesses that are Women-Owned, Veteran Owned, Service Disabled Veteran Owned, or Small Businesses are generally managed with self-certification. Self-certification is not challenged unless or until an interested party or competitor provides protest to it. In addition, an HHS Contracting Officer may request that the SBA provide a size determination.

Small Business Taxes – Know Your Enemy

This article will guide you through the small business tax maze and describe in details the various tax types your small business may be expose to. Use the article to learn which federal and state taxes you, as the owner of a sole proprietorship, general member in an LLC or officer of an S. Corporation is responsible for.

Federal Income Tax

The Internal Revenue Code (the IRC) is the source for imposing income tax on small businesses. The tax code treats each entity type a little different but in the end the income tax on the business taxable profits is payable by the small business owner. Sole Proprietor has to file schedule C to report business income and expenses and then report the taxable income on form 1040 where he discloses all of his income sources. Member of a partnership or an LLC reports his/her share from the business taxable income on form 1040 and Owner of an S. Corporation does the same. The rates of the federal income tax that a small business owner will pay depend on his/her filing status and residency status. For current tax rates please refer to IRS Publication 17 To register with the IRS you must fill out IRS form SS4 to obtain Employer ID Number (EIN).

State Income Tax

If your business is operating in a state that imposes income tax on business income, you will be liable for that tax in addition and regardless of the federal tax due on the same income. Very few States (Seven to be exact) do not impose income tax and among them are Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. Two others, New Hampshire and Tennessee, tax only dividend and interest income. In general state income tax rates range from the lowest rate of 3% in Illinois to the highest rate of 11% in Hawaii. To register with each State’s Department of Revenue, you must complete the applicable registration forms to obtain State Tax ID Number.

Payroll taxAs soon as your business start hiring part or full time employees, it will be subject to Federal & State tax withholding from the employees’ gross wages (For current Federal Withholding rates please refer to IRS Publication 17 and for the Stare withholding rate, please refer to the State’s Revenue or Finance department), Social Security, also known as FICA (currently at 6.2% of gross wages is the employer’s responsibility and the same amount is the employee’s contributions with cap of $106,800 on gross wages) and Medicare (currently at 1.45% of gross wages is the employer’s part and the same amount is the employee’s contributions), Federal & State income tax withholding (at the rates publishes by the IRS and each State’s department of Revenue), Federal Unemployment, also known as FUTA (currently at a rate of 0.008 of gross wages up to $7,000 per year) and State Unemployment, also known as SUTA, at rates assessed by each State Unemployment Insurance Department. To register with each State, you should complete an employer application with the Department of Revenue and open an account with the State’s Unemployment Insurance Department.

Sales Tax

Sales tax is tax imposed on gross sales made to end users (as appose to resellers who purchase the product for inventory) and has many names: transaction privilege tax, gross receipts tax, general excise tax and more. The tax is imposed by each State, and in many cases includes Base Rates for all States residents and then additional rates that vary by county and city. Rates of sales tax vary by States with few States that impose zero percent tax (such as Delaware, Montana & Oregon) and others that impose rates in excess of 10% (such as Chicago Illinois)


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Help My Small Business Be More Profitable and Grow!

First there are legal considerations… what legal issues will I face? Type of legal business entity… why… what is best? What kind of local, county, state and federal regulations will apply? So my first step… would be to have a discussion with a qualified attorney. Not the last time but just the first time.

Next, I would consider the financial funding of the business. Before you approach a financial institution you need to have a “Business Plan”, which is really a marketing task to go about planning your goals, objectives, strategies, time schedules, plans, implementation schedules, costs, sales, and all the functions and ramifications of the business during the first one, three and five years of operation if possible. The more that you can estimate and project, the better off you will be. So now let’s say that you have completed your “Business Plan”. Did you have the marketing background, expertise and tools to accomplish this? Or did you need some professional assistance or tools to help you? We know that the latter is much preferred.

Now, we have our business plan, let’s begin interviewing banks and lending sources to determine what funding is available, at what costs, and on what terms. Let’s say that you come up with several options that appear attractive. Would it be helpful for you to have a CPA or Accountant with Tax Qualifications to assist you in evaluating the best funding program? Yes, most likely.

Now you are ready to determine the location of your business, which will raise real estate questions, tax questions, contractural and legal questions, and financial cost considerations… as a beginning. Where you decide to locate your business will also determine your local and county licensing requirements.

Wonderful… now we have a great location to work… and we need competent employees who would help this business be successful. Now you need to put on your Human Resources hat, get out all the government regulations that apply, develop a mandatory HR Handbook for your business, and begin interviewing… for the anticipated business functions that we planned for our business.

For a beginning business which serves the public your initial functions will consist of an office and business that will provide for Management, Sales, Service,Storage, Reception Area and Conference Room. In reality in order to effectively operate and manage this business you will also need a Legal Department, Marketing Department, Tax and Accounting Department, Collections Department, Human Resources Department, Technology Department, Management Department and Advertising Department. Realistically you will need to perform all of the above functions of a major corporation that has been in business for many years and has considerable resources.

The reality is that for your start-up small business as the owner you may be performing all of the above functions by yourself..personally… for an extended length of time until business volume or funding of the business allows all of these functions to exist and operate. This is a classic example of “I did this myself”.

So how does a small business maximize access and utilization of professionals to give advice on how to accomplish all of these activities efficiently and profitably? Is it possible? Yes, it is… however not too many small businesses know the secrets of doing so. That is the purpose of this document… to acquaint those who are interested with tools, techniques and resources that are vital but difficult to learn about.

The very best ways to do this are through the acquisition of talented people and businesses that offer these services on a very economical basis. With my 58 years of business experience with large corporations and small businesses, I have been fortunate enough to identify many economical tools and services that can benefit small business owners. I provide consulting services and market some of these tools for those who contact me personally. If you have an interest contact me for personal discussion as described below. Thank you for your interest.