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Is Your Small Business on Shaky Financial Ground?

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calculator-428294_640 (1)As you sit back for a moment and assess where your small business is, are you happy with what you see?

For countless small business owners, there is much to be happy about. Hard work and smart financial decisions have left them with healthy businesses.

On the flip side of the coin, you have some small business owners who are far from running healthy brands.

For whatever the reason may be, they are struggling to make ends meet. As a result, times are tough to say the least.

That said how can you position your small business to be as healthy as possible when it comes to finances?

Lower Your Debts and Boost Your Income

So that you are in the best possible financial position you can be now, keep in mind these pointers:

  1. Income

You want to be making as much income as possible as you run your company.

With that in mind, how do you get by when times are tough?

You have to figure on there being some down times throughout your business run. As a result, having the all-important rainy day fund to get you by is crucial.

Your income is also of course affected by how much outreach you do. This is especially the case in trying to get new customers to come aboard. If you are doing very little in marketing and advertising, how can you expect consumers to know about you? Even if you have to trim your promotional budget from time to time, do not drop it altogether.

Also make it a point to encourage your current customer base to help you recruit new customers.

By providing the former with loyalty rewards, they are more likely to spread the word.

  1. Debts

Although you would love to be clear of all debts, you more than likely can’t say that is the case. As such, it is important that you manage your debts.

One of the ways to go about this is by making sure all your business and personal taxes are up to date. There’s nothing worse than owing a lot of money to the Internal Revenue Service (IRS).

One means in discovering such unpleasant news is to do a free federal tax lien search online.

Such a search allows you to discover if you do in fact owe the government money. If that is the case, paying it off as soon as possible is your best move. Otherwise, you could end up in a worst-case scenario of losing everything.

Once that online search does in fact show you owe money, do your best to set up a payment plan. By doing so, you show the IRS that you are not walking away from your financial responsibilities.

  1. Growth

Knowing when the right time may be to grow your small business can of course prove a challenge.

With that in mind, always have a focus on what your industry trends are. This includes if there is current growth, decline, and some mergers and acquisitions. By being adept to what is going on, you are better suited to make decisions about your own company.

If you do decide now in fact is the time to grow your brand, be sure to have the financial assets necessary.

In the event you are tight on money, you may consider asking a family member or friend to invest in your business. If so, be sure to do it in a professional manner as you would with a stranger. By keeping everything professional, there’s less chance of a breakdown in the relationship.

For you to do as much as possible to keep your business from being on shaky financial ground, be smart.

The better you are in making financial decisions, the better odds your business has in sticking around.

Photo credit: Pixabay

About the Author: Dave Thomas covers business topics on the web.

 

Your Business Can’t Afford a Tax Disaster

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Behind On Your BillsDo you ever stop to think about how many hours you truly put into running your business? In the event you do, the numbers could possibly be mind-blowing.

As most business owners, overseeing a business oftentimes means working more than the typical 9 to 5 routine. In fact, it can mean long hours and the feeling at times like you will never quite get ahead.

Now, imagine what your business life would be like if you throw a tax problem into the mix. Think it can’t happen to you?

For too many business owners, issues with the Internal Revenue Service can prove both financially and mentally taxing.

That said how will you make sure that your business avoids disaster when it comes to your taxes?

Tax Attorney Can Mean All the Difference

For those business owners running into taxing issues, it is crucial that they try and not go it alone.

When hiring the right tax attorney to stand up and fight for you, you improve your odds of having any potential financial losses go against you and your company.

So, how do you go about hiring the best tax attorney out there?

Remember, you need someone skilled enough to know the various tax codes, rules, and regulations on the book.

You also require someone willing to take your case because they want to assist you; simply not get a payment due to your misfortunes.

When it comes to finding the best and brightest tax attorneys out there, be it MCC4Tax or another such business, keep these tips in mind:

  • Selection process – The key is always to weed out those tax attorneys best not suited to meet your needs. How much experience do they have? Are they experts at predicting what the government will try and prove when going after business owners? In such efforts, can they shoot down any arguments by the other side, allowing their clients (possibly you) to come out a winner? Do they come highly recommended from other business owners (see more below), owners that relied on their legal expertise to win their cases? Those are but a few of the questions you should expect to have answers for before you choose your legal representation;
  • Client testimonials – As a business owner yourself, do you at times rely on client testimonials to enhance your business reputation? If the answer is yes, then apply that same line of thinking in searching for a tax attorney. He or she should be someone who comes highly recommended by others. If you view and/or listen to client testimonials, make sure you clearly hear what others are saying about your prospective tax attorney. What sets him or her apart from the others in this profession? While you likely will have to pay a little more for better legal representation, it may be the best spent money you will discover over time;
  • After the selection is made – Once you have your tax attorney working for you, make sure he or she is totally up to speed on your case. You may have made a simple error on your taxes, an error that can be easily corrected. On the other hand, a more notable mistake or mistakes can involve much more work by your attorney. Be sure to provide them with all pertinent details about your business, your tax filings etc. The ultimate goal is to have any and all charges during an audit reversed to go in your favor. If they are not changed, your business can take a hit on several fronts. First, the financial hit alone can prove quite damaging. Secondly, word oftentimes spreads quickly in the business community. Consumers hearing about your “questionable” business practices may be deterred from wanting to do business with you the next time around or even the first time around.

Knowing your business simply can’t afford a tax disaster, it is important that you carefully select your tax attorney.

Remember, he or she will try their best to save you a financial headache, a headache that can have implications beyond just finances.

When you are in need of a tax attorney, vet them properly, choosing the one best suited to get you a victory at the end of the day.

Photo credit: BigStockPhoto.com

About the Author: Dave Thomas covers business topics on the web.

Make It Your Business to Get All Available Deductions

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stacks of old dirty pennies. bronze and copper pennies isolatedRunning your own business comes when joys and heartaches. The key is to avoid too much of the latter.

With that being the case, recording and paying taxes as a business owner can be one of life’s biggest headaches.

If you’re self-employed and have no employees under you, life is much easier when it comes to your tax responsibilities.

On the other side, making sure you take the right amount of money out for employees and meeting your other tax responsibilities as a business owner, well, it can sometimes seem downright taxing.

Don’t Make Running a Business Taxing

In running your own business, be sure that you not only are meeting all your tax requirements, but that you are receiving the deductions entitled to you.

For those individuals working out of their homes full-time, there are myriad of deductions one qualifies for, though many oftentimes forget or quite frankly do not know what is and isn’t acceptable to the IRS.

If you’re one of those self-employed folks working out of a private residence, note the following:

  • Your home is deductible…. up to a point – Working out of your home does allow for some deductions, but don’t expect to cover the entire residence from top to bottom. If you set aside a room etc. as your work area, you can use that as a deduction (estimate the square footage involved). What you can’t do is try and deduct the entire residence;
  • Your home office supplies – Assuming that your business needs office supplies, those can be used as deductions. Make sure you save the receipts for items you purchase. If you end up getting a new computer, fax machine, printer or other such office item, you can also deduct those. The key is always to save the paperwork from such purchases, especially if you need to show at a later date that you did in fact buy such items;
  • Your client meetings – When you mix and mingle with clients, you can deduct such meetings (that is up to a point). Meals and mileage to and from such meetings is fine, but don’t try and deduct a gift you may have bought them etc. Stretching things too far could run you the risk of an IRS audit, so it is definitely in your best interests to record and be honest about your deductions. If you do have legal questions or in fact do get audited, a New York tax attorney or one closer to you can assist you with how to proceed;
  • Your health insurance – Unless you have been under a rock for the last three or so years, you know about the governmental requirement that the majority of Americans be covered by health insurance. As a result, make sure you not only have coverage, but look to see if you are eligible for a tax credit. The whole idea behind Obamacare was to make health insurance affordable for the majority of the country. When it comes to medical items, you also can deduct a portion of your doctor visits (including mileage to and from) and prescriptions or other such purchases;
  • Your retirement planning – If you are wise, you have been putting away money over the years for retirement. In doing so, you are planning for that day and time when you will not be working, most likely getting by on Social Security income. Whether you have an IRA or other such retirement vehicle, try and contribute as much as possible to it yearly. This then allows you to record deductions from the money you put into the plan. While there are caps on how much individuals may invest in their retirement portfolios, doing it now and getting the deductions makes it well worth it.

When it comes to doing your taxes as a self-employed business owner, they don’t have to seem as frightening as they might first appear.

Getting organized now, keeping all your necessary receipts, and knowing who to turn to in the event of a dispute and/or audit, can make all the difference in the world.

If doing your taxes seems a bit taxing to you, put organization and the help of others to work for you.

Photo credit: BigStockPhoto.com

About the Author: Dave Thomas writes about business topics on the web.

Tax tips for freelancers: is it a business or a hobby?

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By Sharita Hutton

For Chicago based Aubre Andrus, writing is her life. The author of seven children’s books, a blogger, and website copywriter, Andrus calls herself a triple threat when it comes to her work. “I mix marketing savviness with journalistic integrity and creative writing thanks to various positions I’ve held in the past,” Andrus said.

But instead of waking up every morning, and heading into the office, Andrus is finding her roles in media through freelance work and it turns out she is not alone.

It is estimated that there are 42 million people in work operations based on “freelance” principles and the number continues to grow. That is, these workers have a great deal of freedom in how much and when they work, who they work for and what they get paid. The freedom comes to a halt when it comes to taxes because even if just a little extra income is being earned, that money is reportable income. Plus, special reporting rules apply to some freelancers.

“My least favorite part about being a freelancer is dealing with tax-related issues. I dread tax season and I had no idea what to do at first,” Andrus said.

Freelancers need to track what they earn because even if they don’t get a 1099 or W-2, reporting this income is required by law – even when the payment is made in cash. When freelance work becomes the main source of income or a full-time job, income and expenses need to be reported on Schedule C. Also, when freelancing becomes a business, self-employment tax may be owed, along with quarterly, estimated tax payments. An advantage of operating a business is that expenses can directly offset income, which means a freelancer can show a loss.

“I pay quarterly taxes,” Andrus said. “There a lot of decisions freelancers need to make when it comes to finances, and these are decisions that shouldn’t be made on your own.”

H&R Block Tax Professional Riley Holmes has advice for freelancers. “As a small business owner, you are most likely to report your business income in the year you receive it and deduct your expenses in the year in which you pay them. Sometimes it may be advantageous for you to defer some of your billing until the next year, but once you have access to the income you must report it.”

When freelance activities are at the “hobby” level, all related expenses can be deducted as miscellaneous itemized deductions. But, the deduction is limited to the total revenue from that hobby and it is only for the expenses in excess of 2 percent of adjusted income.

The more you operate your business in a professional manner, the more likely the IRS will treat it as a profession rather than a hobby, making it important to

  • Track all income (it is reportable and taxable)
  • Save receipts (you could be able to deduct some expenses)
  • Secure digital and paper records (be sure to back them up, too)
  • Separate bank accounts (makes it easier to keep good records and file accurate tax returns)
  • Know tax rules for business model (it makes a difference if you have a business or a hobby)
Author’s Bio: Sharita Hutton helps bloggers and other entrepreneurs navigate tax issues. For more information about the difference between having a freelance business and a hobby and other tax topics, contact an H&R Block tax professional. To find the nearest H&R Block office, visit www.hrblock.com or call 800-HRBLOCK.

3 Small Business Concerns Going Into 2014

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What will 2014 have in store for small businesses?

A few small business concerns certainly present themselves, as owners prepare for some hurdles that come in the way of a successful year.

Looking ahead to 2014, here are a few small business concerns that you will do well to counter if you hope for your small business to succeed.

 1.    Health Care

Without question, health care will remain a concern for small businesses heading into 2014.

Largely due to health care concerns, a recent report found that optimism among small business owners fell to 59 percent in October, where it was as high as 72 percent in the prior month.

While these numbers were affected by the government shutdown, health care remains a big concern of small business owners.

As worded in the report by SurePayroll CEO and President Michael Alter, “the only thing that’s certain about health care reform right now is that it’s causing more uncertainty.”

As the dust settles heading into a new year, small business owners will need to grapple with the implications of health care reform.  Business owners will need to understand and react to how it will affect their business.

Many owners would do well to take this matter seriously.

If these changes are not understood, it would be a smart move to consult with a professional on the business’ options moving forward.

2. The Economy

Indeed: the economy could easily land on any year’s list of small business concerns.  It is clear that 2014 is not bucking the trend.

Based on the previous report, year-over-year nationwide hiring is down 1.7 percent, while paychecks are down 0.1 percent.  While the West (down 2.5 percent), Midwest (down 3.0 percent), and Northeast (down 4.1 percent) were not positive, the South is the only region where hiring is up – at 1.3 percent.

As you might expect, there is not simple solution for dealing with economic difficulties at the small business level.

Savvy budgeting and planning will need to take place, with a careful eye towards difficult areas like health care and insurance.

3.    Taxes

In a recent article from the Washington Post, tax reform is said to target small business concerns.  Yet, as the headline asks, “will it matter?”

With criticisms of the current rate structure and the overall code, there are plenty of hurdles that must be overcome.  Small business owners are awaiting the changes that will occur with tax reform, in order to react and – hopefully – enjoy any benefits that come from its developments.

Similar to the subject of health care, small business owners are advised to stay abreast of relevant changes.

Finding a professional that can be trusted can be an invaluable step towards staying on top of any and all relevant changes.

As a small business owner, what has you most concerned as we head into 2014?

Photo credit: didays.com

About the Author: Brian Neese is an author that specializes in content marketing, social media, and SEO.  He writes about technology, how to be first on Google, marketing, much more.

Am I Missing Any Tax Breaks?

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If you run a small business, you know that every dollar really does count.

Whether you’re just getting off the ground or your business has an established track record, it’s still helpful to save money whenever possible.

Tax deductions are one area where a little knowledge can go a long way. The more breaks you’re aware of, the more opportunities you’ll see for your business to save money.

To give you an idea of what types of savings are available, let’s go over some of the most commonly overlooked small business tax deductions:

Bad Debts

One of the biggest surprises many new business owners have is just how hard it can be to collect money from certain clients or customers. This issue is especially prevalent among service businesses.

Even though it’s very frustrating to have clients who simply won’t pay what they owe you, the silver lining is bad debts can generally be deducted when you file for your business.

Mileage

Whether it’s driving to a meeting, attending a networking event or going to see a client, you’re allowed to deduct mileage that’s used for work purposes.

Just be sure that whenever you want to deduct mileage, you log the date and where you’re going, as well as the mileage at the beginning and end of your trip.

Charitable Donations

You may already be aware that eligible donations you make to charity can be deducted.

But what plenty of business owners don’t realize is it’s often more advantageous to make deductible donations through their business than from their personal money.

Cloud-Based Software

More and more software is moving to the Cloud.

The main advantage for customers is it allows them to access their software from any computer with an Internet connection. And one of the primary advantages for software developers is whenever there’s a bug, they can instantly push out a fix.

Because they provide ongoing service, many cloud software developers charge on a monthly basis. If you have one or more cloud software subscriptions, be sure to deduct all your monthly charges.

Business Trip Incidentals

Landline calls, lodging taxes, cleaning and laundry are all examples of acceptable incidentals from business trips that you can deduct.

And as long as you keep a log, you can also deduct train, subway, bus and taxi fares.

Loan Interest

If you borrow money against a personal loan like your mortgage in order to buy equipment for your business, you can deduct the interest on your loan.

The two most important things to remember about this break are that you need to use the money for your business, and you also need to document exactly how you used it.

As you can see, there are plenty of tax deductions available for small businesses. The key is keeping track of all of them.

By making it a priority to keep current and detailed records throughout the entire year, you’ll be able to maximize your deductions when the time comes to actually file your taxes.

Photo credit: American.com

About the Author: Jesse Galt is a freelancer who writes about a wide range of topics, including mobile credit card processing and small business marketing strategies.