Wednesday, July 23, 2014

Ways to Use Business Taxes to Build a Stronger Company

We're more than half way through 2014: Exactly where does your business stand in relations to taxes?

Last week, a client of mine had an awful revelation when I finalized his tax form and brought to light he owed a lot of money to the IRS. His initial response was to be mad at the ambassador. Even so, upon careful reflection, he declared, "Well, I should have come to see you last year when my new product took off the way it did. I knew I was making a lot more money.".

He's correct. Every time there is a sizable shift to your business's bottom line (in either red or black), it's time for a visit to your tax pro. In fact, everyone who operates a small business should take advantage of the mid-year off period to sit down with a tax expert to examine their financial statements as well as potential tax liabilities.

It's much easier to plan and put a strategy in place today than to run around at year end upending pails of water on all the small fires that have been brewing all year.

Here are some suggestions to explore with your tax pro to strengthen your tax situation and preferably keep working capital in your bank account rather than in Uncle Sam's pocket:.

Open a retirement plan.

If you're at long last a few dollars ahead and don't have a retirement fund, now's the time to open one. Here's the bonus: it's deductible!

Speak with a bona fide financial advisor or a representative from your bank to discover what kind of plan best suits your demands.

There are a wide range of vehicles from Individual 401(k) plans to SEP IRAs to PRACTICAL plans that may or may not need you to include employees in the plan.

If a plan necessitates employee participation, do not automatically dismiss it.

Establisheding a retirement plan for your employees could be a meaningful way to give raises that don't require the extra cost of employer paid payroll taxes. Read IRS Publication 560 for more information.

Examine your legal structure.

Take the time to examine whether your business is functioning optimally in its existing entity structure. You may have started out as a sole proprietorship and have grown out of it. It is especially important to examine entity structure if your business is currently netting more than $100,000 per year.

Keep in mind that if you incorporate, you will now be required to take finances out of the business via payroll rather than simple draws.

There is a lot more paperwork involved under this status, but the tax perks and protection that a corporation offers may prove more beneficial. Always review these alternatives with your legal representative and tax expert before making a decision.

Offer employee benefits.

Staff members are our most significant business asset and should be treated keeping that in mind. There are many employee benefits that are not taxable to either the employee or the company. Look into IRS Publication 15-B, Guide to Fringe Benefits to learn more on this topic. You will save your money in payroll taxes while you develop a better working environment for your workers.

Purchase furniture and equipment.

The IRS has always rewarded outlays for capital assets by offering the Section 179 Deduction. This unique deduction allows the immediate expensing of capital assets rather than depreciating them over their useful lives. Be advised however. This year, the limit for purchases decreased from $500,000 to $25,000. However, Congress will be looking into extending that threshold probably sometime during fourth quarter. You can start putting money aside for the purchases now.

Perform projections.

Take a good look at your financial reports. Run a profit and loss and contrast it to the previous year profit and loss through June 30. Are there substantial changes? Are you expecting an increase or decrease in sales and/or expenses through the end of the year? It's a simple matter to export your data from QuickBooks into Excel where you can tinker the numbers to figure out what your yearend bottom line will be. Impart that information with your tax pro to find out if you must change your planned tax payments accordingly.

Tuesday, July 15, 2014

Winklevoss Twins Announce Trading Code for Bitcoin ETF

Earlier this month, Silicon Valley moguls The Winklevoss twins revealed the trading symbol for their cutting-edge bitcoin ETF (exchange traded fund). The bitcoin mutual fund will go public under the mark 'COIN'.

The digital currency caught the twins' eyes more than a year ago as the cost of bitcoin took off. The twins publicized strategies to buy the prominent web-based currency July 1, 2013. Since then, extra details have come to light concerning what the investment tactic was becoming. In May, the twins, publicized they were taking the Winklevoss Bitcoin trust (their Bitcoin ETF) to the stock market. They feel the value of Bitcoin can increase by a factor of ten with a valid exposure on the exchange. On July 15, 1 Bitcoin cost $621.45, a substantial investment opportunity if what the twins say is correct. This figure has been gradually growing since the statement of the fund.

'COIN' is still held up in government control and there is zero crystal clear or formal publicized date for the IPO, although many professionals are speculating that (based on government approval) the fund may be trading right before the end of the year.

It is an exciting period for the digital marketplace, but maybe what is most fascinating about bitcoin specifically is the way in which it is expanding into the real world. Read more about this story at the New York Times and at coindesk.

Monday, July 14, 2014

U.S. Tax Policy Has Corporations Headed Overseas

Originally Posted on

In the past 10 years, 47 companies have transferred overseas for lower tax rates, compared to only 29 in the previous twenty years.

Now more than ever, American companies are deserting the U.S. for nations with more attractive tax law.

Fresh researched has identified 47 companies over the past decade who have actually transferred their headquarters overseas to take advantage of lower rates. Corporate behavior like this has recently come to be referred to as “inversion”

To qualify for the lower taxes, a company needs to do more than just move a business overseas and don a new address: companies have to initially assimilate with a company in the lower-tax country and then either do at least a quarter of their work overseas or offer the owners of the overseas company at least one-fifth ownership of the newly-merged business.

Just 29 firms used inversion to transition to a lower-tax nation the previous 2 decades, according to the Congressional Research Support service analysis.

Regulators and other legislation have tried to develop stricter requirements for inversion over the years – especially after prominent corporations like Fruit of the Loom, Seagate and Tyco shifted some or all their production/operations to locations like Bermuda and the Caymans.

Tuesday, July 8, 2014

Joe Garza of Dallas Talks About Preparing Taxes

It's never ever prematurely to start tax preparing.

For numerous, tax day is with any luck a distant memory. But also for businessmen, it's never prematurely to start preparing for next year. And while the majority of companies try to make use of every allowable deduction, many don't know that a great portion of their advertising and marketing expenses are tax deductible.

Actually, according to a current study of company owner at Inside99Designs. com, greater than a quarter (27 percent) aren't also aware that the IRS allows them to take off (" underrate ") specific marketing costs on their tax returns. And out of the 73 percent that do learn about the deductions, just 57 percent suggested that they'll be making use of them in the close to future.

And the questionnaire says ...

The survey, carried out among 211 U.S.-based small company proprietors, suggested that 64 percent of entreprenuers state they are creating off roughly the same amount this year as on their previous return, while simply 22 percent are taking off much more.

And when asked what solitary advertising and marketing channel they 'd apply money towards if they were to receive a tax refund, the questionnaire said:

33 percent would certainly spend it on their website.
17 percent on internet advertising and marketing.
17 percent on a mobile application.
10 percent on a print ad campaign.
8 percent on social networking sites marketing.

 Last but not least, when asked if they considered the cash they spent in 2013 on marketing activities were a great investment or not, 70 percent said yes, 23 percent stated they weren't sure, and 7 percent claimed no.

Simply to make clear, I'm by no suggests a tax specialist. Nonetheless, based on the findings from this survey, I could create a general conclusion that lots of small business owners should be consulting with their tax specialists and evaluating feasible tax deductible marketing expenses. But as a small company owner, I locate I'm in excellent business with those which are spending dollars back into their advertising methods in an effort to grow and maintain a healthy client base.

Monday, July 7, 2014

Passwords after You've Passed-On: Estate Planning and Your Digital Footprint

Digital Footprint Here's an interesting article recently picked up by MarketWired detailing the trouble that your social media footprint can have on your Estate Plan. Many older individuals aren't really aware of how essential passwords are to allowing your survived loved ones to take a comprehensive look at your estate. Numerous elderly Americans don't understand the full extent of the impact of their activity online - particularly on social media

Having already compiled all of your online passwords/credentials isn't only important to thorough estate management, but it is absolutely vital for your family and also your estate after you're gone or disabled.

Know that each social network's website has a different collection of guidelines regulating ways to shut your account as well as remove the profile of a deceased individual. Some are rather easy while others might call for evidence of an obituary notification or even a certificate of death. The full article goes into greater detail about how to thoroughly collect any information about your digital profiles that your estate preparer or loved ones might need.