Tax Updates for YOUR Small Business

As the year moves closer to the end, now is a good time to start taking a look at your tax situation (if you haven’t started already). There have been quite a few advantages of the Small Business and Work Opportunity Tax Act of 2007 (2007 Small Business Act) that all small business owners may want to take a look at. Here is one that will help closely owned family businesses simplify their taxes.

Prior to the 2007 Small Business Act, if an unincorporated business that was jointly owned by a married couple filed as a sole proprietorship (as opposed to a partnership), only the filing spouse would receive credit for paying Social Security and Medicare taxes. Furthermore, unless the married couple was located in a community property state, both the married couple and the business would have been subject to penalties for failing to file as a partnership. As a result, some married couples who were in business together filed a partnership return.

Under the new law, an unincorporated business that is jointly owned by a married couple in a common-law state may file as a sole proprietorship without penalty provided the business elects not to be treated as a partnership. The new law also ensures that both spouses receive credit for paying Social Security and Medicare taxes. The provision is effective for tax years beginning after December 31, 2006.

Be sure to speak to your tax advisor regarding this and the many other changes affecting your small business.

Keeping Your Business N Synergy

www.thebricogroup.com

Hey Slacker What’s The DEAL?!?!

Here we all are as small business owners taking it to the max everyday, and now there is a book by Timothy Ferriss called “The 4-Hour Work Week” that claims that a small business owner can increase their profits and have more “me” time by working less. The book has also been on the nonfiction best-seller list since its May publication.

The book boasts a method to his madness by using the acronym DEAL which stands for, Definition, Elimination, Automation and Liberation. This may be one to put on your late summer reading list if you are a small business owner looking for a change of pace.

For the real “DEAL” and more details of the plan check out this link:

http://www.opinionjournal.com/la/?id=110010378

Keeping Your Business N Synergy

http://www.thebricogroup.com/

Ways and Means Votes to End IRS Private Debt Collection

Here is some mixed news regarding debt collection and the IRS from the National Society of Accountants:

The House Ways and Means Committee voted July 18 to repeal the private debt collection program used by the IRS to collect federal income taxes. The vote was 23-18, with all 17 Republicans on the committee (and one Democrat) voting against the bill, H.R. 3056, The Tax Collection Responsibility Act of 2007. The Administration had supported the private debt collection program as a means of reducing the $345 billion tax gap. Ways and Means Oversight Subcommittee ranking member Jim Ramstad (R-MN) took the position that without the program, the IRS would assign workers elsewhere and the tax debt would go uncollected. Ways and Means Oversight Subcommittee Chairman John Lewis (D-GA) countered that the collection of taxes “is a core government function. It is the Internal Revenue Service’s mission.” Lewis said the program wastes tax dollars by paying a bounty up to 24 percent to the private contractors hired to collect tax debt from delinquent individuals. “The private debt collection program is an insult to the American taxpayer and our federal tax system,” Lewis said. A copy of the bill is available at the following link:

http://waysandmeans.house.gov/media/pdf/110/07%2018%2007/3056Description.pdf

Keeping Your Business N Synergy

http://www.thebricogroup.com/

Technology Trends for the Small Business Owner

I had an opportunity to take part in a webinar yesterday for accountants that discuss the trends in electronic transactions and how they can impact the bottom line for a small business owner. Electronic transactions include ACH (Automatic Clearing House), EFT (Electronic Funds Transfers) and electronic checks. If you have not already implemented these functions into your small business, this may be a good time to take a look. According to data gathered from various banks, there has be a downward trend in the amount of checks that are pass at the counter, just one sign that there are additional ways to make and receive payments.

I know many of you are probably thinking “that’s okay, I’ll still make and receive payments the old fashion way and feel more secure”. Well using electronic transactions can provide you with the piece of mind that you need. Specifically, electronic transactions can provide the small business owner with speed, control, security, flexibility, and efficiency that they need to streamline cash flow, speed collections, and improve reporting capabilities.

Keeping Your Business N Synergy

http://www.thebricogroup.com/

2007 Small Business Tax Act and Your S-Corp

Congress has passed the Small Business and Work Opportunity Tax Act of 2007 (2007 Small Business Act), which eliminates gains from sales or exchanges of stock or securities as an item of passive investment income. For tax years beginning after May 25, 2007 this legislation also generally defines passive investment income as gross receipts derived from royalties, rents, dividends, interest, and annuities, subject to several exceptions.

What does this mean for your S-Corp?

This change may be in your favor when planning for future investments. The change can possibly lower the portion of your income subject to the corporate-level tax at the highest corporate tax rate applicable for excessive net passive income. Be sure to speak with your tax advisor for more information regarding the tax law changes and how the will affect your small business.

Keeping Your Business N Synergy

www.thebricogroup.com

Make Technology a Reality Today!!!

Small business owners, there is no time like the present to integrate technology into your small business processes and strategies. One of our previous posts dealt with the urgency small business owners need to have to keep up the ever changing business environment. A recent study (second installment) from Intuit’s Future of Small Business Report™ states that technology will change considerably the way small businesses are started, operated and grown. The study recognizes three trends that will emerge in the next ten years that will become the norm for small businesses:

1. On My Time, On My Terms – small business management will be this way for owners
2. Global, Local, Virtual – web and technology will fuel innovation
3. From Push to Pull – Marketing approach will shift

After looking at these trends and analyzing my own personal small business experience, I can attest that these trends are already a reality for myself and many other small business owners. With the use of WiFi networks and various other technology (video/web conferencing, online training, etc.) a small business owner can operate a business on their own time and virtually everywhere. This will allow small business owners to tap into markets that are typically outside their reach. If you have not already, take a look your own small business tech strategy and see if any changes can be made to ensure your place in the future.

Get all the details regarding the future at:

http://www.accountingweb.com/cgi-bin/item.cgi?id=103727&d=883


Keeping your Business N Synergy for the future

http://www.thebricogroup.com/

Windows Vista and YOU

By now many of you have heard about the new operating system being offered by Microsoft called Windows Vista. If you haven’t already upgraded, be sure to test your existing software titles to ensure that they will work in the new Windows Vista operating environment. But what if you have checked all of your software and systems and still have problems in the Vista environment? There may be a possibility that you are not running a genuine Windows Vista product. The tell tell signs that you are running a non-genuine Vista product are:

1. Constant desktop warnings
2. New features are disabled
3. Non-security updates and downloads are denied
4. Information stored on the PC may be exposed to risks
5. PC will have reduced functionality

If you are experiencing any of these problems, there is a chance that you are not using a genuine Vista product. Microsoft has setup a site(s) to ensure that users have the right software to run their businesses. You can also consult with a Microsoft Partner in your area that can assist you in the process of checking your systems. Getting your systems up to date and “genuine” will ensure that your Business is N Synergy.

www.microsoft.com/genuine

www.howtotell.com

www.thebricogroup.com

E-bay Versus Craigslist

As small business owners, we are always looking for ways to save money. Typically we find those savings by shopping and searching for goods and services on the sites like E-Bay and Craigslist. Now these two giants of the cyber world are going at each other. E-Bay has announced a new service called “Kijiji” an online classified ad service. This was quietly done last week and E-Bay feels they will bring viable competition to their rival Craigslist.

Oddly enough, E-Bay owns a 25% stake in Craigslist. The site will be part of E-Bay’s classified ad strategy for the US and has ad pages for some 220 cities. It will allow users to buy and sell items in a variety of categories. I am eager to see what happens with this battle, but I think Craig may have a jump start in this one.

Keeping Your Business N Synergy

www.thebricogroup.com

Sales Taxes are coming to the Internet

Earlier this week I was speaking to a client about sales taxes and how they are very complicated since each state and smaller municipalities make up their own rules when it comes to sales tax collection. Well it appears that the federal government is getting in on the issue. Right now two bills are circulating in Congress that are looking at ways to collect sales taxes on internet purchases. Backed by the state and local governments, Congress is pushing for the ability to impose sales taxes on internet purchases and charge monthly taxes on internet connections. All parties are looking at the billions of dollars that can be gained from the taxes, but at the expense of the consumer.

In May, Senator Michael Enzi (R-Wyo.) introduced a bill that would make it mandatory to collect sales taxes on internet purchases; all the while the House is considering allowing a temporary ban on internet access taxes to lapse when it expires in November of this year.

Typically sales taxes pay for state and local resources (schools, police, etc.) and most lobbyists feel that reduced sales tax revenue threatens those resources. A major hurdle to the change however is that it will be very difficult to overhaul the sales tax systems of the 7500 different tax agencies involved in sales tax collection and compliance. Will these changes affect your small business? Enzi’s bill would exempt small businesses with less than 5 million in out-of-state sales from paying the taxes, but as of now that is the only silver lining behind this dark cloud. We will keep a close watch on this situation in Congress.

Keeping your Business N Synergy

http://www.thebricogroup.com/

More Small Business Tax Woes

A recent study states that taxes top the list of the small business concerns as the second quarter of the year came to an end. The Small Business Research Board study says that taxes replaced healthcare costs as the leading concern. The study was co-sponsored by the International Profit Associates and polled some 770 small businesses. The second concerns for small business owners were the overall economic conditions following by fuel/energy costs.

Healthcare (which was number 1 on the list before) was moved down to fifth. The study also listed taxes as the leading concern in the Southeast and western regions and ranked second in the Midwest regions. Economic conditions were the leading cause of concern for the Northeast and Midwest regions.

It appears that it depends on which region of the country one resides in, but taxes are still a high priority on all the lists. This is for quite a few reasons. The most important are the recent tax changes and efforts by the IRS to close the tax gap at the expense of the small business owner. There have been quite a few updates regarding the small business owner and their tax situation thanks to Congress’ passing of the Small Business and Work Opportunity Tax Act of 2007. This Act increased the minimum wage which will possibly adversely affect small business owner’s bottom line, but there are also some incentives for small business owners buried within the Act. Over the years the provision and retroactive changes within the bill should benefit the small business owner. Be sure to speak to your tax advisor to see how you can make taxes become less of a concern for your business.

Keeping your Business N Synergy

www.thebricogroup.com

Summertime Small Business Snags

With the summer season starting this past week, most people are looking for some much needed time off to take vacations and be with their friends and families. This is usually a hectic time for the small business owner that wears all the hats in their firm. Summertime can be a particularly challenging time for certain kinds of small businesses. Employees and contractors have their own plans for the summer and it makes it difficult for small business owners to support their clients when staffing is short or even non-existent. These actions can typically cause a cash flow crunch for small businesses and we all know that effective cash flow is the lifeblood for any small business.

To alleviate this problem, small businesses need to live by what I like to call the “5 P’s” of business. The five P’s are:

“Proper Planning Prohibits Poor Performance”

By planning for the shortage of workers in the summer months, small business owners can continue to serve their existing client base and even possibly gain more business. Some ideas for keeping your small business up and running are:

1. Bring on your kids to do some of the grunt work
2. Cross train your existing workers
3. Use the downtime to your advantage by planning for the future
4. Reward staffers with incentives to keep them motivated
5. Be sure to build a cash “cushion” before the summer months hit

Use these tips to keep your business up and running smoothly through the summer months and maybe you can take a vacation when everyone is back from their summer fun.

Let me also take this time to thank everyone that came to our Small Business Solutions Seminar yesterday at the College Park Library. It was a pleasure meeting everyone who attended and learning more about your businesses. Next seminar is scheduled for July 10th 2007. See our website for more details

Keeping your Business N Synergy

http://www.thebricogroup.com/

Protecting Your Small Business

According to research conducted by the Association of Certified Fraud Examiners (ACFE), small businesses (fewer than 100 employees) suffer more fraud losses than their large counterparts with the median loss per incident at $190,000. Most large businesses however, have an internal audit department to combat fraud whereas this department is non-existent in small businesses. What is a small business to do to combat fraud? The ACFE has provided 5 steps to prevent fraud:

1. Establish internal controls
2. Setup formal employment guidelines
3. Fraud prevention training
4. Conduct random and routine checks
5. Hire a CFE Certified Fraud Examiner

Fraud is definitely more prevalent in small businesses due to their small size and budgets that do not allow them to attack the problem like larger businesses. It is important for small businesses owners to take some precautions to ensure that employees, contractors or anyone else that has access to the businesses information and/or assets has been properly screened and controls are in place so that fraud can be detected. By incorporating these small steps into your existing operation, the potential for a fraud loss can be minimized.

For more information on fraud and how to prevent it, feel free to check out the ACFE’s site and the following links:

http://www.acfe.com/documents/Fraud_Prev_Checkup_IA.pdf

http://www.acfe.com/documents/2006-rttn.pdf

Keeping your Business N Synergy

http://www.thebricogroup.com/

QuickBooks is NOW OPEN/SMB’s relieve their gas

Here are the weekly updates affecting small and medium sized businesses (SMB’S).

QuickBooks takes a shot at rival Microsoft in an effort to gain market share. Recently Intuit, (makers of QuickBooks) announced that they will allow users of their QuickBooks Enterprise Solutions software access to servers running Linux open-source. In the past users of Linux had to have a separate Windows based server to house the QBE database. By allowing the QBE dbase to run on Linux, IT professionals can cut costs in their SMB’s. It will be interesting to see how Microsoft counters this punch from Intuit.

In Congressional news, Senator John Kerry and Maria Cantwell are looking for solutions for small business owners suffering from the increase in gas prices. They will introduce legislation to establish a fuel emergency program for small firms struggling to cope with rising gas costs. Kerry and Cantwell's bill, the Small Business Emergency Fuel Assistance Act, will be offered as an amendment to H.R. 6, the CLEAN Energy Act. Their proposal would create a grant program within the Department of Commerce's Economic Development Agency that authorizes the Secretary of Commerce to issue grants to states to provide assistance for fuel-dependent small businesses in the wake of a Presidential fuel emergency declaration. Small firms and farms demonstrating need and a plan toward becoming more energy efficient would be eligible for these grants.

This will definitely be a step in the right direction for SMB’s to relieve their costs and hopefully not pass the fuel increases on to their customers. Hopefully this bill will pass.

For more information regarding these developments visit:

www.webcpa.com/article.cfm?articleid=24503

U.S. Senate Committee on Small Business and Entrepreneurship

Keeping your Business N Synergy

www.thebricogroup.com

Your Entrepreneur Skills

I would like to start this post off and thank everyone for attending our first seminar in the Small Business Series yesterday at the College Park Library. It was a pleasure meeting everyone and hopefully you got some information and help tools to assist you in starting your own small business. To recap from yesterday, anyone can be an entrepreneur, people are not born with the skills; they are learned. The typical skills that an individual needs to become a successful entrepreneur are:

Persistence
Independent
Reliable
Innovative
Creativity

Starting a business venture can be a tough undertaking, but once an individual takes the necessary steps to get the skills they need to be an effective entrepreneur the rewards can be endless. Be sure to do research to understand the business you want to start. You should also understand your funding requirements and what type of technology you will need to effectively run your operation.

All this and more will be addressed at our next seminar Saturday June 23, 2007. We will begin the process of putting your ideas into action and start preparing business plans. Be sure to come out and get your business off on the right foot.

Keeping your Business N Synergy

http://www.thebricogroup.com/

Updates from The IRS/Congress

There have been some new developments recently from our friends at the IRS and the congressional government. One has to do with a previous post regarding compliance and the tax gap, and another has to deal with new legislation that may benefit the small business owner. If you are a small business owner, both new developments will be of importance to you.

Audits Will Be Up for 2006 Returns

The IRS will launch “The National Research Program” project that will focus on individual tax returns for 2006. About 13,000 individual tax returns will be audited starting in October. The audits will focus on areas of the income tax return that can not be verified by third-party information reporting. For details see the IRS article or contact your tax advisor.

Bush Signs Bill….Small businesses get 4.8 billion

The President signed the Small Business and Work Opportunity Tax Act of 2007 thus triggering retroactive and immediate changes affecting small businesses. Since the minimum wage has been increased (and is adversely affecting some small businesses), the Act provides tax incentives to help businesses absorb the cost of the higher federal minimum wage. Highlights of the Act include:

an extended and enhanced small business Code Sec. 179 expensing;
a FICA tip credit calculation that ignores the new hike in the minimum wage; and
an extended and enhanced Work Opportunity Tax Credit.

For more information regarding the new legislation passed and how it will affect you be sure to speak to your tax advisor.

Updates to keep your Business N Synergy

www.thebricogroup.com

Software N Synergy!?!

Businesses large and small all need to have the right software to effectively run their business operations. Typically the larger businesses have deep pockets to purchase large “enterprise” software to keep track of all of their business information and processes. What is the small business owner to do to compete with their larger counterparts? Implement your own enterprise software, but on a smaller scale. Enterprise software allows business owners to get a snapshot of their whole operation from start to finish. This allows the business owner to track the sales of goods and services from lead generation to sale completion.

Right now, there is a great deal of software titles out there geared toward the small business owner, the majority of them are integrated through small business accounting software via add-ons or software that works with the accounting software. The only problem affecting small business owners right now is if the software will work with your Microsoft operating system (Vista). Microsoft owns the market for operating system software and now small business owners can setup their own enterprise software system with their new products.

Imagine being able to track accounting processes from your MS Outlook software, or integrating online payment processing that uploads transactions directly to your accounting software, also being able to bank online and have transactions uploaded to your accounting software. All this and more can be accomplished when you implement Microsoft’s new products into your business operations.

We will discuss these new software technologies and more at our Small Business Seminar series starting next week. For more details feel free to see our website. Before you know it you can and will have your small business software working together making you and your operation more efficient.

Keeping your Business N Synergy

www.thebricogroup.com

SBA a Little Help!!!

The SBA (Small Business Administration) is an organization that is suppose to help small business owners and entrepreneurs get the necessary tools and funding they need to successfully start and run their small business operations. Lately however, there has been a great deal of frustration felt by many small business owners that have looked toward the SBA for assistance. According to a report in the NY Times this past week, “recent policy changes and severe budget and staffing cuts in the last six years have left the agency unable to fulfill its mission to provide programs and services to the nation's 25 million small companies, which the agency defines as businesses with 500 or fewer workers. Since 2001, the agency's budget has been sliced nearly in half, to $464 million in the proposed 2008 budget. Staff cuts have been almost as deep, with the agency losing 31 percent of its work force.”

The SBA is also has seen an increase in their fees on their most common loan packages the 7(a) program and a decline in the amount of banks participating in the SBA’s loan program. These changes have all accounted for the loss in potential contracts for small business owners, and have many small business owners looking toward other sources for funding.

What is a small business owner/entrepreneur to do? Many small business owners have turned to the credit card industry and are using debt to finance operations and provide more capital for their businesses. The only problem with this strategy is that the interest rates on the credit cards are considerably higher than those on the SBA loans.

The Brico Group, Inc. will address these and other issues in our Small Business Seminar Series at the College Park Library this month. The first seminar will begin June 12th. Small business owners and entrepreneurs will get information regarding what the SBA can really do for them right now, and also what banks are entrepreneur friendly. Be sure to join us for these informative seminars.

Keeping your Business N Synergy

http://www.thebricogroup.com/

So You Want To Be An Entrepreneur??

Starting a small business can be one of the most rewarding experiences that a person can have. If, the entrepreneur knows what it takes to get the business started and also making a profit. In addition to money and resources, there is a time and “sweat equity” factor that plays into the equation. What many entrepreneurs must realize is that it takes a great deal of energy to keep the wheels of your operation moving together. Entrepreneurs need to take time away from the business to regain lost energy, thus taking a vacation is an important part of your strategy.

A recent study done by Information Strategies, Inc. is stating that entrepreneurs take only 5.5 days of vacation a year, compared to 14 by the average American. Among their other findings:

·41% had not taken a vacation of more than seven days in the past two years.
·33% had not taken a vacation in two years.
·27% said they did not expect to take a vacation this year.
·31% had not been abroad in three years.
·41% said their business suffered when they were on vacation.
·44% said their families had taken vacations without them.

Rather high numbers, but just goes to show that the entrepreneur is putting in the work for their business. Let’s also think about the reasons for starting your business now. I’m sure one of them was to have more time to spend with friends and family. Might be a little confusing now…huh?

It is good to know that you are the entrepreneur type before starting a business. Once you know that you are, you then move to your business idea and starting planning your business. By properly planning to prohibit poor performance, you will have your business profitable, use less energy, and enjoy more vacations.

For more information on finding out if you are an entrepreneur, stop by for one of our seminars starting next month (June 12th) at the College Park Library Atlanta, GA. More information is on our website below.

Keeping your Business N Synergy and Using Less Energy

http://www.thebricogroup.com/

USA the best place for Entrepreneurs?

I was able to read an interesting article on CNNMoney.com this week regarding the climate for small businesses in the world. I was rather shocked to find out that the USA is NOT on the top of the list. Although we are near the top, the US did not make the first spot. The major factors that make a country entrepreneurial friendly include but are not limited to bankruptcy laws, tax policies, and employment regulations. Countries that have a solid foundation of laws and regulations typically faired better than their counterparts who did not have established laws, policies, and regulations.

For a look at the detailed list of countries by their rank, and to read the article on CNNMoney.com, check out the following link:

http://money.cnn.com/magazines/fsb/fsb_archive/2007/06/01/100049637/index.htm?postversion=2007052305

This article is a great read for those thinking about starting a business in the near future and/or thinking of starting an international operation. After gaining insight from the article, be sure to stop at the College Park library for the “Small Business Series” seminars, hosted by The Brico Group, Inc. These powerful seminars will provide the attendee with useful information on various topics including are you’re an entrepreneur type, business formation which entity is right for your business, taxes, and accounting, organization, filing and much more. For more information feel free to visit our website.

Keeping your Business N Synergy

http://www.thebricogroup.com/

FREE E-Newsletter for Small Businesses

The IRS has started a new service called “e-News for Small Businesses”. This e-Newsletter will be distributed every Wednesday (today) and will provide small business owners and the self employed with useful tax information including:


Important, upcoming tax dates
What’s new on the IRS website
Reminders and tips to assist business with tax compliance
IRS news releases and special IRS announcements

The new e-Newsletter will be an easy way for small business owners and self-employed to gain insight from the IRS regarding tax issues and how they will affect their businesses. It also give the IRS an new angle to provide information electronically to small business owners, keeping in line with their strategy of embracing technology and cutting down on sending paper information to taxpayers.

For more information regarding the e-Newsletter, simply go to the IRS website at http://www.irs.gov/

Keeping Your Business N Synergy

http://www.thebricogroup.com/