Subcontractors vs Employees

There may be tax advantages in using subcontractors rather than employees for skilled or semi-skilled services. Using subcontractors rather than employees can shield a business from employer paid taxes, such as Social Security and Worker’s Compensation Insurance, according to Financial Web.


Read more at Suite101: Money Saving Business Tax Tips http://www.suite101.com/content/money-saving-business-tax-tips-a300736#ixzz13OaSqEux

Timely Tax Payments

A business can save money by paying certain taxes on time. Many states will award a 3% to 5% discount for timely payment, according to Financial Web. Some of these taxes may include value-added taxes or state sales taxes.


Read more at Suite101: Money Saving Business Tax Tips http://www.suite101.com/content/money-saving-business-tax-tips-a300736#ixzz13OaMNwrC

Small Business: Loans and Grant & Financing FAQ's

Financing FAQs 

Starting a business can be daunting, as you wonder how do you put yourself in the best position to succeed. The answer is simple: you begin with solid information. Check out some of the frequently asked questions below to get yourself off to a solid start. 

Can I use a grant to start my business?

Generally, no – despite what you may have heard, it is rare that a for-profit business would receive grant money to start or expand a business. 

While there are a few grants available to small businesses, they are largely directed towards accomplishing specific priorities identified by the federal government or a state government agency.  For example, some states provide grants for expanding child care centers; creating energy efficient technology; and developing marketing campaigns for tourism. These grants are not necessarily free money, and usually require the recipient to match funds or combine the grant with other forms of financing such as a loan.  

How can I find a legitimate loan or grant?

There’s a sea of misinformation about business loans and grants on the Internet. Use Business.gov’s Loans and Grants Search Tool as the starting point for finding legitimate financing programs your small business might be eligible for. Keep in mind, for-profit businesses are rarely given government grants and should look to low-interest loans or venture capital financing if you’re wanting to start or expand a business. 

Grants.gov is also helpful for finding thousands of federal government grant programs, or the Catalog of Federal Domestic Assistance, which offers a comprehensive database of grants, loans and other assistance programs available from federal agencies.

I have bad credit - can I still get a small business loan?

With the state of the economy and lines of credit being significantly scaled back or eliminated altogether, loans have become increasingly hard to obtain - especially if you have poor credit. Luckily, the government has designed federal and state loan guarantee programs for people unable to obtain financing through traditional lending channels.  In many of these programs, the loan proceeds can be used for most business purposes including working capital, machinery and equipment, land and buildings, leasehold improvements, and debt refinancing. Before you apply for a loan, you should pull together the basic documentation you will for your application.

What happens if I default on my loan? 

While it’s not the end of the world, defaulting on your loan will definitely have some immediate effects like a drop in your credit score, increased interest rates, and foreclosure of property - and it will definitely make it more difficult to find another loan (should you need to in the future). 

If you are about to default on a loan, you may want to consider some of the tips offered in the Loans and Grants Community, like negotiating new terms with your lender, considering government debt relief options, or liquidating some of your business assets. Also, if your business will make it or break it depending on a loan then you may want to try looking into other methods of funding your business. 

Source: http://community2.business.gov/t5/Small-Business-Cents/Loans-and-Grant-amp-Financing-FAQ-s/ba-p/38620?cm_mmc=GovDelivery-_-101310-_-weekly-_-community

4 Ways to Combat the Isolation and Loneliness of Being Your Own Boss

Making the move into business ownership can be one of the most exciting and liberating experiences, however, it can also be one of the most challenging.

Yes, you can expect to work long hours and deal with cash flow issues in the early years, but one aspect of business ownership often comes as a surprise, and, if not managed carefully, it can become all consuming.

I’m talking about the sense of isolation that comes from going it alone.

It’s a common experience for many small business owners particularly for sole proprietors or home-based business owners.  But it’s also especially true of business owners who have chosen to leave their nine-to-five jobs to pursue their dream.

Gone is the nurturing team environment and the motivation that comes from working with others. And while many people work better alone, for others the pressures of business ownership can leave them feeling overwhelmed, isolated and alone – impacting both their work life and their personal lives.

Whatever your business type or wherever you work, here are some tips for managing the trials and tribulations of working alone and being your own boss.

1. Make Networking Work for You


Love it or hate it, networking in business is essential. Whether you are an independent contractor; a home-based business owner; or have a fully-fledged presence on Main Street – networking can get you out of the day-to-day silo of business ownership and help you overcome your sense of isolation.

The trouble is, networking gets a bad rap – it’s perceived as schmoozing, if not downright self-serving. But the truth is networking can be invigorating and rewarding. Humans are social beings.  They thrive on contact, shared experiences, and helping others. Even if you just hook up for a coffee with a former college buddy who has also taken a similar path into business ownership – the opportunity to share and learn from each other can help alleviate the sense of being alone in business.

2. Find a Mentor, or Become a Mentor!

A mentor is someone who has been in your shoes, and successfully walked the walk of business ownership. He or she  can provide informal advice, guidance, and motivation. But how do you find a mentor?
Sometimes it’s a matter of getting to know fellow, non-competing business owners or seeking the free mentoring services of a professional association such as SCORE or your local SBDC.

Alternatively, could you become a mentor?  Mentoring a protégé can be a mutually beneficial relationship that places value on your experience and provides a reason for you to focus on the positives, share your wisdom, and place some perspective between you and your day-to-day business operations.

3. Take the Weight off Your Shoulders - Build a Team Focused on Collective Success


"Very few people are ever successful or a failure by themselves, and probably, one of the most powerful elements in creating success - is a powerful team." Laurie Benson, CEO of Inacom Information Systems and 2009 "SBA National Women in Business" Champion.

In business, powerful teams not only drive results, they empower, challenge and motivate employees to learn, grow and participate in the collective success of the business itself.  If you are an employer, changing your management style to focus on building an empowered and motivated team can help alleviate the stresses and strains of solo business ownership, and even help your bottom line.

4. If you Work from Home - Take Control of Your Demons and Distractions

One of the symptoms of feeling isolated as a business owner is a lack of motivation which can lead to easy distractions and a lack of productivity. This is especially true for home-based business owners who wrestle with: 1) Working in a physically isolated manner, and, 2) Managing the conflicting demands of business and home-life.

Taking steps towards managing your home-based business routine, your workload, and your day-to-day schedule can have a big impact on how you cope with these demands, and provide much-needed time on your calendar to step away from “going it alone”.

Source: http://community2.business.gov/t5/Small-Business-Matters/4-Ways-to-Combat-the-Isolation-and-Loneliness-of-Being-Your-Own/ba-p/38322?cm_mmc=GovDelivery-_-101310-_-weekly-_-community

Got a home office? Here are some tips for you...

If you are a Sole Proprietor with a home office, you must file Form 8829, Expenses for Business Use of Your Home. The purpose of this article is to help you prepare this form without getting a headache.
This article makes three assumptions about your business:

1. Your Sole Proprietorship is not a in-home daycare facility;

2. Your business has a profit that is greater than your home office deduction;

3. You do not have any home casualty losses to deduct.
Here’s a list of the information you need to properly complete Form 8829. After each item is the line on the form where that number is reported.
1. Square footage of your home office (Line 1)

2. Square footage of your entire home (Line 2)

3. Mortgage interest from Form 1098. Your lending institution is required to send you this by January 31. (Line 10)

4. Real estate taxes on your home (Line 11)

5. Homeowner’s insurance premium. For both real estate taxes and homeowner’s insurance, if you pay these as part of your monthly mortgage payment, these amounts should be reported on Form 1098. If you pay either the taxes or insurance yourself, then you’ll need to track down those amounts in your checkbook register. (Line 17)

6. Rent payments, if you are renting rather than buying your home. (Line 18)

7. Repairs and maintenance expenses. This can include the typical expenses most homeowner’s incur to keep their home in good shape, such as fixing a plumbing problem or repairing the water heater or furnace when they break down. Just be careful not to include major improvement projects like a new roof or bathroom remodel. Those are not considered repairs or maintenance. (Line 19)

8. Utilities expenses. This includes electricity, gas, water, sewer service, and trash disposal. It does not include telephone service. (Line 20)

9. Other expenses, such as neighborhood association dues and other miscellaneous household-related expenses not mentioned already. (Line 21)
After you put the square footage amount on Lines 1 and 2, you will divide Line 1 by Line 2 to calculate the business use percentage on Line 3. Then carry the Line 3 amount down to Line 7. This percentage is what determines how much of the various expenses will actually become a deductible business expense.
For example, if you have a 150 square foot office and a 1,500 square foot home, your home office occupies 10% of your home and so you will get to deduct 10% of all the expenses listed above.
The next step is to list all those expenses on the various lines listed above, using column (b) Indirect expenses. Then you add up all those expenses on Line 22 and then multiply that total by the business use percentage from Line 7, putting the result on Line 23. The Line 23 amount is then carried down to Line 35, and then you transfer the Line 35 amount to Schedule C, Line 30.

Source: http://www.bestarticle.org/finance/how-to-prepare-form-8829/

Tax Tips for Domestic Partners

It is good practice to keep separate bank accounts. This seems odd, since most people who are partners end up with joint accounts. Here is the catch. To apply for a deduction you will need to prove that you actually paid for that expense yourself. In the event of an audit where joint accounts have been used, it cannot be proven who actually paid for the expense. So it makes better sense to hold separate accounts. Use these accounts to pay for your expenses that you will deduct at tax time. This way there is no confusion as to who actually paid them.
If your partner does not work you can claim him or her as a dependant for an extra exemption. To do so your partner must have been living with you for a year, have income less than the personal exemption amount and receive at least 50 per cent of their total financial support from you.

Source: http://business.ezinemark.com/state-income-tax-filing-online-is-the-best-way-for-us-tax-payers-16b9d1c8979.html

House for sale - Increase home value with little expenditures

For those who have chosen to sell their house, it can be extremely hard to increase the value of the home without spending a fortune. A lot of money is needed just for a simple one-room overhaul. Often, the renovation can cost more than it increases the home’s worth. But there are several cheap and easy ways to improve your home’s worth.
Since the view of the font yard is the initial thing seen, it should be first on your “to-do” list. The lawn should be cut, and the garbage picked up. There should be no stray plants or tall grass around lawn accents, along walls, or along walkways. Flower beds should look fresh and shrubbery should be cut back. Planting new shrubs and perhaps a statue or a trellis will also enhance the lawn’s appearance.
Once you are finished outside move inside the property, begin by organizing. Getting rid of any clutter you have acquired over the years will make the house look neater and more welcoming. Getting a storage unit for the items you wish to hold on to is a great idea. This will cause the house to look bigger and more elegant.
The walls and windows of the home should also be cleaned. This is a much cheaper method than purchasing new siding or paint. It is much more budget-friendly to power wash the outside and clean the inside than it is to replace or repaint. However, patchwork and a paint job is necessary for any walls which are dimpled or mottled.
Wood trim is another inexpensive way to make your home look more elegant. The taste of the home can be enhanced very easily with this method. Keeping walls a muted color against a brighter trim work can open up the room.
These tips will help make your home more desirable on a budget. While examining your work, remember one important tip. Imagine you are seeing your house for the first time, and take note of the small things. Does the house look like something you would want to buy? Remember that the buyer will be ready to live in the home, and will not be interested in a house if it has to be fixed

Source: http://taxliens.mikestaxlientips.com/?p=1704