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/