What The RAL is Going On?!?!?

Greetings everyone out there in cyber land. I am writing (and posting) this week’s blog on the road from Maryland as I am out of the office working with clients. On the flight up from Atlanta, I was able to get in some reading and found an interesting article in the January 2007 issue of Practical Accountant (a Source Media Publication). It deals with our good friends at H&R Block and their better disclosure to their clients of all the fees associated with Refund Anticipation Loans (RAL’s). What caught my attention is that they are reducing the costs associated with these loans.

For those who do not know how RAL’s work, let me walk you thru them. The loan is based on your anticipated refund amount and the time frame to receive your money can be a fast as a day to 11 days. The catch with these loans is that the interest rates can be as much 35 to 40 percent, not including the additional costs for forms and processing. This is a great way for tax prep firms as well as banks to make an additional bounty of money.

Smarter ways of filing your taxes and keeping more of your hard earned money is to simply E-file your return, and have the refund direct deposited into your account. This process typically takes about the same amount of time as a RAL and you save your money.

This is just a thought. Feel free to respond to this post and let me know your thoughts.

As always keeping your Business N Synergy (even on the road) :-0

Brian N. Stovall
www.thebricogroup.com

Hey IRS, What’s New?

So the tax season has started and it may appear that the IRS was caught a bit off guard this year. With all the recent tax law enactments that were passed, the IRS has not had time to update the form 1040 and additional schedules. Individuals claiming deductions on Schedule A will need to lookout for a special mailing of Publication 600 outlining how to claim the sales tax deduction.

For more information visit this IRS link

New Form 1040EZ-T

For those who don’t need to file a regular tax return, the IRS has developed this short form so that taxpayers can request a telephone refund. Taxpayers can use the standard amount on the form or attach Form 8913 for actual expenses.

And now the bad news….

Because of all the “changes” this year, the IRS expects return processing to be slower than usual, thus delaying your precious tax refund. The IRS recommends that you E-file your tax return for faster processing. For the best estimate of when you will receive your refund, the IRS has provided Publication 2043.

Happy Tax Season to ALL!!!

Brian N. Stovall
www.thebricogroup.com

Jumpstarting Your New Year

As the year 2006 comes to an end let’s take this time to review the year in regards to small businesses. In an earlier post, we looked at the outlook for small businesses and for the most part the outlook looks rather promising. In the recent weeks, I have reviewed a few “offerings” for small businesses that can save you money, and increase your reach and profits for 2007.

New Phone Tax Formula

The IRS has finally announced the formula allowing businesses to estimate their federal excise tax refund. To request a refund, businesses must fill out Form 8913. The actual amount of the refund is determined either by the actual amount (from March 2003 thru July 2006) of excise taxes paid or by the formula the IRS provided. For more information regarding the tax formula, check the IRS website and or speak to your tax advisor.

Increase Your Profits

Here is a FREE 18 page report for those interested in generating more leads, maximizing your marketing opportunities and build on last year’s profits. Simply go to the following link to get the report.

http://www.acorncreative.com/gonutsin2007/

Wish everyone a Happy New Year keeping your Business N Synergy

Brian N. Stovall
http://www.thebricogroup.com/

QuickBooks and Windows Vista

The new Microsoft Windows Vista software is available for small businesses to use, but before you do, you may want to know that QuickBooks 2006 and earlier versions will not be supported by the new Vista operating system. Due to the Windows Vista compatibility “shims”, QB 2006 versions will however run many functions normally but the users will be alerted that they are running an unsupported configuration with the following wording:

“When running QuickBooks 2006 or earlier versions on Windows Vista, you will likely experience instability and unreliable behavior, even though these problems may not appear right away.”

Other softwares that are used in conjunction with your QB 2006 software may also experience problems. If your small business falls within this category, be sure that you upgrade your QuickBooks software to version 2007 if you plan to use Windows Vista. Another “thought” is to switch to Microsoft Office Accounting Express or Professional. Office Accounting Express is FREE so there is no expense incurred to switch. I can’t help but wonder if these incompatibility issues are simply part of Microsoft’s strategy to bring their small business accounting package to the forefront of the small business industry. Can’t wait to see what happens in 2007 and beyond.

Keeping your Business N Synergy

Happy Holidays Everyone!!!

Brian N. Stovall
www.thebricogroup.com

Tax and Technology Updates

Now that Congress has closed out the year and gone home for the holidays, it is good that they were able to pass and extend many of the much needed tax breaks for taxpayers. Just to recap, check out my previous blog post “Tax Breaks Still Looming” for details of the bills that were on the table. Now that these measures have been passed, this is still a good time to add the tax breaks into your tax planning for this year. Be sure to speak with your tax advisor regarding these changes and how they may affect your tax return.

In technology news, I have been able to take a look at the new Microsoft Office Accounting Express and must say that it is quite impressive. Files from “other” small business accounting software import seamlessly into the software and the ability to merge with other Microsoft products makes it all the more easier to run your business. I can’t wait to get the Professional version of the product. To top it off, the Express version is available FREE right now. Check out my previous blog “Microsoft Office Accounting 2007 is Here” for details on how to download the Express version for free.

Those are the updates this week people. Just some ideas to get you on the right track for tax season and keep your business N synergy.

Brian N. Stovall
http://www.thebricogroup.com/

Tax Breaks Still Looming?!?!

Well Congress is suppose to wrap up business for the 2006 year next week and there still are some tax measures that expire at year end. There are a few bills in the session that would benefit the small business owner and individuals, but this is only if they are extended. The major bills for “the little guy” are:

Research and Development Credit
reward for employers who hire former welfare recipients,
a personal deduction for state and local sales taxes paid by people who live in states without income taxes,
and a personal deduction for elementary and high school teachers who spend at least $250 of their own money on classroom supplies

Look out for the results for these changes may have an effect on your tax liability in April. Keeping you and your Business N Synergy.

Brian N. Stovall
http://www.thebricogroup.com/

Health Reimbursement Agreements (HRA) Revisited

The other week I posted some information on how S-Corp owners could provide health insurance for their owner/employees (see S-Corp Owners and Health Insurance post). Well here is more detail on how this can be done.

If you are looking for a way to reduce your employee benefit costs, you may wish to consider using a health reimbursement arrangement (HRA). An HRA is an employer-funded health benefit account for individual employees, which may be used to pay their medical expenses and health insurance premiums. This type of plan is generally more economical, more flexible, and has additional features that a traditional health benefit plan does not have and at the same time provides favorable treatment for federal income tax purposes.

Under an HRA, the contributions you make and the amounts received by your employees are generally excluded from the employee's income. In addition, any excess amounts to the end of the year can be carried over to future years without being lost.

In order to receive favorable tax treatment, an HRA must meet the following requirements:
1. The plan is paid for only by you and is not provided by an employee salary reduction election or under an employee benefit cafeteria plan;
2. The plan reimburses the covered person for medical care expenses of the person, the person's spouse and the person's dependents; and
The plan reimburses a covered person up to a maximum dollar amount for any period of coverage and any unused portion of the maximum dollar amount at the end of that period is carried forward to increase the maximum reimbursement amount in subsequent coverage periods.

Ask your financial advisor if an HRA will work for your small business.

As always…tips to keep your Business N Synergy.

Brian N. Stovall
www.thebricogroup.com

Claiming the Child for 2007? Which taxpayer WILL?

With my “Get Sharp as a Tack on Taxes” seminar coming up this week, I thought that I would post a comment regarding tax basics for the 2007 season. This tip is in regards to who can claim a qualifying child when two taxpayers are trying to claim the dependency exemption.

The IRS has issued guidance for taxpayers that may have a "qualifying child" in common with another taxpayer for purposes of claiming certain tax benefits. A conflict arises when two or more taxpayers wish to claim a dependency exemption, the child care credit, earned income credit, or child tax credit based on the same child. Similarly, a single, divorced, or separated parent may wish to claim the head of household filing status based on providing a home for a qualifying child, or taxpayers may seek to exclude dependent care assistance payments for a qualifying child from their income.

The IRS considers that the determination of who is allowed to claim the qualifying child in each of the above situations applies to all of these situations as a group. Two or more taxpayers may not claim the same child for different purposes on their respective tax returns, with one exception. This exception allows the non-custodial parent to claim the child for purposes of the dependency exemption and the child tax credit only, and permits the custodial parent to claim the child for all other purposes listed above.

For more tips like these and if you are also in the Atlanta area this up coming Wednesday November 29th, stop by the College Park Library for the seminar. Start time is 6PM.

Be there to get more information on keeping your Business N Synergy!

Brian N. Stovall
http://www.thebricogroup.com/

Microsoft Office Accounting 2007 is Here

New for 2007 Microsoft has updated their small business accounting software to make a run at the industry leader QuickBooks. The name has changed from “Small Business Accounting” to just “Office Accounting 2007”. There will be two versions offered to the public to meet all the needs of small business owners. The two versions are:

Microsoft® Office Accounting Express 2007 – immediately available as a FREE download. Visit http://www.ideawins.com/ to download a free license.
Microsoft® Office Accounting Professional 2007 – available for purchase through retail or online early next year.

Microsoft Office Accounting Express is similar to QuickBooks Simple Start software in that it is designed for small businesses with one owner and home based businesses. It allows these users to immediately get up and running with a computerized accounting system to replace their shoebox system.

Microsoft Office Accounting Professional 2007 offers additional features to small business owners that will allow them to work more efficiently. Some advancements are the ability to work with different currencies, integration with PayPal/Ebay, and payroll services for those with employees. It also has additional features that allow accountants faster more accurate accounting.

Microsoft Office Accounting Express will be offered as part of the Microsoft Office Professional 2007 suite, and Microsoft Office Accounting Professional 2007 will be offered with Microsoft Office Small Business and Office Ultimate 2007 suites.

For more information on how these two new accounting offerings can make your business work smarter visit these websites:

http://www.oaisbetter.com/
http://www.ideawins.com/

Keeping Your Business N Synergy

Brian N. Stovall
http://www.thebricogroup.com/

S-Corp Owners and Health Insurance

For the majority of business formations, the IRS has provisions that allow the business owner to acquire health insurance in their own name and treat that health insurance as a business expense (Internal Revenue Code 162[1]). But what if the business is operating as an S-Corporation? There is a different tax consequence if the individual is the sole shareholder and sole employee and purchases health insurance in their own name.

According to Internal Revenue Code 1372(a) an S-Corp that pays for health insurance and other fringe benefits for an owner who owns more than 2% of the corporation’s stock (2% shareholder) will be treated as a partnership. Now that the S-Corp is considered a partnership, the rules can get a little tricky. In a partnership health insurance is consider a guaranteed payment (IRC 707(c)) and those payments are deductible and included in the partner’s gross income.

With an S-Corp however, insurance paid by the S-Corp would NOT be deductible by the S-Corporation as a fringe benefit but would be deductible by the S-Corp as compensation to the 2% shareholder. The insurance amounts would be included on the shareholder’s W-2. Certain conditions must be met by the S-Corp for this deduction to be allowed. If the shareholder is eligible to participate in any other health plan whether from another employer and/or spouse’s employer, the deduction is not allowed.

With that said, the S-Corp would have to purchase the health insurance for any deductions to be allowed. But what if the shareholder purchases a health plan in their own name? Since some states do not allow corporations to purchase group health plans with only one participant, many S-Corp owners must purchase health plans on their own. If this occurs, everything stated above does not apply to the situation. The shareholder however, is still able to deduct the health insurance as an itemized deduction which will be subject to the 7.5% AGI (adjusted gross income) limitation.

Next time we will look at additional strategies for S-Corp owners to use to provide themselves with health insurance in particular Health Reimbursement Arrangements (HRA). Until next time keep your Business N Synergy.

Brian N. Stovall
www.thebricogroup.com

2007 Small Business Outlook Results Are In!!!

Adminstaff, the nations leading professional employer organization has conducted another survey in late October regarding small business owner’s confidence for the future. Again the year 2007 looks pretty optimistic for small business owners with 70% saying they expect their companies to exceed this year’s growth levels in 2007. The breakdown of small business growth will be reflected in the following ways:

70% plan to add employees
5% expected a drop-off in their workforce
59% expect to see an increase in employee compensation
33% plan to maintain their current compensation levels
64% expect to pay employees overtime
44% plan to increase capital spending

There were also a few challenges noted in the survey that small business owners will have to overcome. The majority of these challenges are the same ones that our larger counterparts must overcome in 2007, including:

Controlling costs
Retaining their best employees
The economic outlook
Increased business competition

As a whole, the small business outlook looks pretty good for the small business owner. It will take a collaborative effort by small business owners, employees, and their advisors to ensure that 2007 is a prosperous year for all. With effective planning now, the small business owner will be able to keep their Business N Synergy in 2007.

Brian N. Stovall
www.thebricogroup.com

Let New Technology Help Your Small Business in 2007

Recently I was able to sit in on a webinar regarding technology and how it affects the accounting profession. Although it was directed to the accounting profession, the core values and principals of the webinar could be applied to any business. The topic was OCR or Optical Character Recognition a way of producing readable files from hard copies and /or scanned documents. I have had an opportunity to use this technology and must say that it can really streamline the process of data tracking, data warehousing, audit and compliance.

There are quite a few low cost vendors out there for a small business owner to use for OCR and other document management services. One I came across was alldocuments.com where their web based document management system for $35 a month. Microsoft’s Office software also has a document image writer (Microsoft Document Imaging) that allows users to review documents and edit text from documents. Other low cost ideas are to use a company intranet/extranets to store documents instead of paper files. Either way “thinking outside the box” may be the way to make your business run more efficiently.

As the year 2007 approaches, try to think of ways to streamline your small business processes and make your business more efficient. A small monthly investment can make your internal processes much more efficient and bring more dollars to your bottom line.

Use these tips to keep your Business N Synergy

Brian N. Stovall
http://www.thebricogroup.com/

Final Baby Boomer Tax Tips

Here are some additional baby boomer tax tips for portfolio income in your retirement years. These tips are regarding IRA’s and how to withdraw money from them in the most tax advantage manner.

IRA’s

Boomers that have a substantial amount of appreciated securities should withdraw money from their IRA’s before taking the gains from those securities in taxable accounts. As long as the stocks produce small dividends, the tax burden will be minimal. The exception to this rule is when taxable accounts consist of mutual funds that generate capital gains distributions. When this occurs, the mutual funds need to be sold before withdrawing money from the IRA.

Typically a boomer should take IRA distributions after the age of 70 (70 and one half to be exact). The benefits of waiting are:

The IRA will continue to compound on a tax-deferred basis
There will be no change in the clients AGI (adjusted gross income)
The boomer can leave greater amounts of the IRA to heirs

IRA’s a great way to save money for retirement and tapping into them at the right time will produce benefits that won’t strain your budget at tax time. As always check with your financial advisor to see if these tips can work for you.

Until next time, keep your Business N Synergy.

Brian N. Stovall
www.thebricogroup.com

Baby Boomer Tips Continued

As tax season approaches, here are more tips for baby boomers to enjoy their retirement years at the same time minimizing their tax bill. This week’s tips deal with how to take income in those retirement years from CD’s and savings bonds.

Using CD’s for income

Using income producing assets such as CD’s is a great way to produce income in retirement years. Boomers can reduce their tax bill from the interest income that the CD’s generate at the same time allowing other tax advantaged investments to remain.

Savings Bonds

Boomers redeeming their savings bonds set off all the deferred income tax due on the bonds at redemption. Boomers should wait to redeem savings bonds as long as possible to benefit from the continuous tax-deferred interest accumulation.

More tips to come next week until then as always keep your Business N Synergy.

Brian N. Stovallwww.thebricogroup.com

Interesting Statistics Regarding Small Businesses

Here is some interesting news regarding the state of small businesses in the U.S. SurePayroll, the nation’s largest online payroll processing provider for small businesses recently conducted a survey asking small business owners what are some of the top challenges of owing a small business. Here are some of the results:

Around 19% said finding and keeping qualified employees
Around 18% said balancing business development and current workload
Over 14% said managing work time and priorities
Almost 12% said managing employees
Another 12% said generating expected revenues
Almost 12 % said cresting a work/life balance
7% said meeting income goals
Almost 6% said acquiring capital for growth

Another survey by SurePayroll revealed that the accountant is the most trusted advisor for small business owners contributing more to the success of the business than an attorney or banker.

With the threat of rising interest rates, health care costs, and inflation, it is rather difficult for a small business to operate in the current economy. By partnering with a small business accountant, small business owners can alleviate some of the challenges mention above; at the same time have someone by their side to ensure the success of their business.

Use a small business accountant to keep your Business N Synergy

Brian N. Stovall
www.thebricogroup.com

Tax Tips for Baby Boomers

As many of our baby boomers get ready for the “good life” of retirement, many will begin to start drawing income from their retirement plans that they have spent years building. There are a few tax implications that may affect many boomers when they begin to withdraw funds from retirement plans and/or cash out of stocks. In the next few weeks, I will post a tip for boomers to ensure that their retirement years are spent enjoying life instead of paying a bundle in taxes.

Early Retirees

Many retirees will elect to receive Social Security benefits at age 62 (the earliest possible age to receive benefits) at the same time they may have stocks and other securities in their portfolios. If this is this case these retiree should not sell any stocks that have appreciated in value in any of their taxable accounts. This will ensure that any capital gains are avoided thus lowering the AGI (adjusted gross income) and the taxes owed on Social Security benefits. Additionally if the boomer passes away, the heirs will not have to pay any income tax on the investments appreciation during the boomer’s lifetime.

For more information on these tax savings strategies, review Internal Revenue Code Section 1022 (d) (2) or stop by our tax seminar coming later this fall. See our website for more information.

More tax tips to come…in the meantime keep your Business N Synergy!!!

Brian N. Stovallwww.thebricogroup.com

Branding Your Small Business Niche

Many small businesses are started to fill a particular need that larger organizations either feel are not profitable or have not devised a viable strategy to penetrate that market. It is very important for a small business to “brand” their service or goods to ensure that the market knows what particular niche they fill. This way a small business can create a lasting impression in the marketplace that can increase their reach and possibly profits.

Following are a few questions a small business owner needs to address to ensure that their goods or services are branded effectively in the marketplace:

What are your clients buying and who are your competitors? Know what your brand means to your clients and customers and who in the marketplace have similar products.

What is your short phrase sentence? This is your one sentence description that describes completely what your firm does.

What is your catch phrase? This is basically your tagline that supports your brand.

Has your brand been in the news lately? This is important for getting your brand out to the public. Make sure the publicity is not negative though.

Do you have a strategy for building your brand up? Brand building should be an integral part of a small businesses overall strategy. Always make this a part of your business and operational plans.

For more on branding your small business check out our free small business seminars at the College Park Library in the Atlanta area. New schedule can be found on our “Firm Notes” page of our website
www.thebricogroup.com.

As always keep your Business N Synergy

Brian N. Stovall
www.thebricogroup.com

Small Business Planning Assistance

With the upcoming fall Small Business Seminars that I will be doing, I thought this would be a good time to provide viewers with some resources. If you are out there in cyberland and are thinking about starting a business or if you have started a business in the past year the Bplans.com site may assist you in constructing a concise business plan for SBA funding or bank loan. Bplans.com is part of Palo Alto Software who also developed the Business Plan Pro software. Their website is a one-click stop for information on how to write a business plan, start and grow a business, and manage your advertising/marketing campaigns.

Specifically the business plan website has calculators for cash flow, currency conversion rates, starting costs estimators, and investments. The site also has industry reports and FREE business plans for the budding entrepreneur. This is a great way to gain valuable insight and prepare a business plan that will get results and keep you new business in synergy from the start.

Brian N. Stovallwww.thebricogroup.com

Excel = (SEAMLESS:INTEGRATION)

In the September 2006 issue of Accounting Technology (a Source Media publication), the article “Living with =SUM” presents an interesting take on how Microsoft Excel has become the norm for integration with accounting and financial software for businesses and accountants. Many software vendors are embracing MS Excel to provide their end users with more flexible modeling capabilities, but at the same time putting a hurdle in front of the end user that may hinder expanding. Although MS Excel is good for the smaller operations, as a company grows it is imperative to have a more controlled accounting system in place to track the companies operations.

This is food for thought for the MS Excel only users (accountants included) that want to stick only with MS Excel for their business. The majority of the software vendors have some kind of interface within their software that gives the end user the feel of MS Excel. Another point made in the article is that Google is experimenting with a free service on Google Labs for spreadsheet users, all the more reason to consider Excel and additional software for your operations.

Look for more information regarding integrating your business with MS Excel at the next small business seminar brought to you by The Brico Group, Inc. Free seminars at your local library in the Atlanta area. Check our website for more details.

Brian N. Stovall
www.thebricogroup.com

IRS/SSA Summer Updates for Small Businesses

The IRS/SSA has a few updates for small businesses in the summer edition of The Reporter. Three new resources for small businesses are now available in electronic format to assist small businesses with understanding how taxes work. The three resources are:

The 2006 Small Business Resource Guide – an interactive CD that provides small business owners with valuable skills they need to manage their business. Included in the CD is information on starting a new business to choosing a retirement plan options.

A Virtual Small Business Tax Workshop (Publication 1066C) – a DVD that helps small business owners meet their federal tax obligations. It is a ten lesson workshop that presents tax subjects and also has a text only help lesson with links to the latest information on the IRS website.

The Tax Calendar for Small Business and Self Employed (Publication 1518) – consists of information on general business, SSA customer service, important tax dates, retirement plans, and more.

Order copies of these resources at www.irs.gov/businesses/small/article/0,,id=101169,00.html

Keeping Your Business N Synergy

Brian N. Stovall

The Brico Group, Inc.

www.thebricogroup.com