Small Business Tips

December 2017 Archive
Estimating Self-Employed Tax

Yesterday I spent a good part of the afternoon attempting to estimate my tax liability for 2005 while looking ahead to 2006.

As all small business owners know, self-employment tax is a major part of your total tax liability each year. It represents 15.3 percent of your net earnings from self-employment as reported on Schedule SE.

The tax consists of two portions:

12.4% for Social Security – $11,160.00 maximum (2005).
2.9% for Medicare – no maximum.

According to the IRS, net earnings from self—employment generally represent 92.35% of your net income. eHow.com offers this equation for estimating self-employment tax:

Net Income * .9235 = Net Earnings
Net Earnings (up to $90,000 in 2005) * .124 = SStax
Net Earnings (no limit) * .029 = MCtax

SStax + MCtax = SE Tax

Assume your company earned $55,000 net income. Your estimated self-employment tax is figured as:

55,000 * .9235 = $50,792.50
50,792.50 * .124 = $6,298.27
50,792.50 * .029 = $1,472.98
$6,298.27 + $1,472.98

SE Tax = $7,771.25

Disclaimer: Tax results submitted to the IRS should be figured by a qualified accounting professional.

Recommended Reading:

IRS.gov – Self-Employment Tax Discussion
TurboTax.com – Self-Employment Tax


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Estimating Income Tax
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Which Business Entity is Right for You? (Part 3)
How to Find Good Employees

By Chris Brunner
Monday, December 18th, 2017 @ 12:01 AM CDT

Taxes |

IRS Publication 17 – Tax Guide

IRS experts have pulled together an overview of common tax issues in one convenient place – Publication 17, Your Federal Income Tax.

From stock sales to student loans, this 300-page publication holds the answers to many of your questions.

To get a copy, visit www.irs.gov/publications/p17/index.html or call 1-800-TAX-FORM (1-800-829-3676).


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By Chris Brunner
Sunday, December 17th, 2017 @ 12:00 AM CDT

Taxes |

How to Find Good Employees

Finding good employees can make or break a small business.

Better employees mean better production and more success for your company. On the other hand, bad employees end up costing you time and money.

AllBusiness.com offers this list of 8 ways to find good employees:

1) Temporary personnel agencies
2) Employment agencies
3) Headhunters
4) Internal candidates
5) Bounty rewards
6) Your Web site
7) Want ads
8) Job Web sites

Read more: Finding Good Employees

Recommended Reading:

Closing the Deal: How to Get Prospective Employees to Sign On
Hiring and Retaining Good Employees
How to Find the Right Employees for Your Business


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By Chris Brunner
Saturday, December 16th, 2017 @ 12:00 AM CDT

Human Resources |

Small Business Loans & Grants

We all know money is everything when starting a new business. Fortunately there are many groups that are pleased to give you money for starting up a legitimate business.

Ken Yancey, CEO of Score.org, offers 5 steps on the topic:

1.) Consider city, county, or state assistance programs for qualified small businesses. Some examples include tax abatements, urban-renewal set-asides, rural access, workforce training, and economic development.

2.) Contact your state senator’s or representative’s office. The staff there can be helpful in pointing you toward state funds or programs for businesses.

3.) Take advantage of “in-kind” credits. Like cash, these can be used as matching funds. In one case, a state program counted a company’s $200,000 local property-tax abatement as part of the matching requirement.

Recommended Reading:
How To Fund A New Business
Look to the States for Small Business Grants
SBA.gov – Federal Grant Resources


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By Chris Brunner
Friday, December 15th, 2017 @ 12:09 AM CDT

Money |

10 Interactive Marketing Tips

Interactive marketing takes the act marketing a step further by engaging the audience to gain and hold attention.

Interactive marketing is designed to keep the audience occupied while you subliminally advertise your product.

Mike Yapp of iMediaConnection.com offers us the top 10 best ways to create an interactive marketing scheme.

1) Multimedia
2) Opt-In
3) Personalization
4) Tell a Story
5) Include a Compelling Offer
6) Make it Immersive
7) Usability
8) Effective ROI
9) Reshaping the Brand
10) Send to a Friend (Viral Marketing)

10 Best Interactive Marketing Practices

Recommended Reading:

Upcoming Interactive Marketing Events 01/06
InteractiveMarketing.com – Marketing Tips
Create an Interactive Online Experience for Clients


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By Chris Brunner
Thursday, December 14th, 2017 @ 12:01 AM CDT

Marketing |

Will You Retire?

Retirement is not in the plans of most small-business owners, according to the newly-released Wells Fargo/Gallup Small Business Index.

Eight of 10 small-business owners surveyed said they are happy running their businesses and have no intention of retiring. Almost 4 out of every 10 said the only thing that would force them to retire is poor health.

Forty-two percent of small-business owners indicated they may cut back on work, but would never completely abandon their business. Only 19 percent plan on traditional retirement.

Even though retirement is many moons away for me, I feel that I will fall into the 42% of business owners who will cut back, but not completely abandon their business.


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By Chris Brunner
Wednesday, December 13th, 2017 @ 12:06 AM CDT

Ownership |

10 Opportunities for 2006

This small business forecast is brought to you courtesy of Anita Campbell of SmallBizTreands.com.

This list was subjectively chosen by Anita under 2 requirements:

1) The list is limited to businesses that the mainstream can identify with.
2) The list focuses on opportunities for the average entrepreneur.

That said, here is the Small Business Trends list of Top Ten Promising Business Opportunities for 2006:

1. Outsourced information technology services
2. eBay and Amazon related opportunities
3. Pet-related
4. Food and beverage related niche industries
5. Hobby and avocation-based businesses
6. Anything security related
7. Services for seniors and retired people
8. Information filtering services
9. Hospitality businesses that create an experience
10. Hispanic products and services

[Read More...]


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By Chris Brunner
Tuesday, December 12th, 2017 @ 12:00 AM CDT

Ventures |

Broadband Over Powerlines

High-speed Internet connections over powerlines and electrical currents is not entirely new, however, it is little known to the public.

I believe this technology will soon be a viable alternative to Cable and DSL connections. With two-way speeds of up to 25 times that of Cable and DSL, this technology could have a significant impact on all things electronic.

There are, however, some kinks that need to be worked out first… such as interference with certain radio frequencies.

Customers who subscribe to the service simply plug a tiny modem, based on the HomePlug power line standard, into an electrical outlet and connect a cable from their computer for Internet access.

Recommended Reading:

HowStuffWorks: BPL (Broadband o’ Power Lines)
WiredNews: Broadband Over Power Lines?
Why broadband over power lines is a bad idea


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Protect Your Wireless Networks

By Chris Brunner
Monday, December 11th, 2017 @ 12:00 AM CDT

Technology |

C|net Launches Small Business Site

C|net has launched a new web site:
Best Practices: Tips for Your Small Business

“If you’re in business, you’re looking for solutions. What you do with your systems, software, and services is as important as what you buy. Knowing how to get started, where to turn, and what questions to ask helps you streamline your efforts and make more money.”

There are a few useful articles, but for the most part the site looks pretty bare. Since it is new, I assume that more content will be added over time. Bookmark this and check back in a few months as I have a feeling there will be some good articles posted there.


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By Chris Brunner
Sunday, December 10th, 2017 @ 12:01 AM CDT

Technology |

Year-End Tax Planning Steps

In the month of December what do you think about… family, food, shopping? At this important time of the year, many business owners don’t give their tax situation a second thought.

What can you do to maximize your tax savings before clock strikes midnight on December 31st?

Barbara Weltman of Inc.com offers these 10 steps:

Step 1: Add to your revenue.
Step 2: Pay off accounts receivable.
Step 3: Make capital investments.
Step 4: Stock up on supplies.
Step 5: Distribute profits.
Step 6: Save for retirement.
Step 7: Make charitable donations.
Step 8: Get slow movers off your books.
Step 9: Adjust your estimated taxes.
Step 10: Get ready for new 2006 tax laws.

Source: 10 Steps to Year-End Tax Planning

Recommended Reading:

MotleyFool – Year-End Tax Planning Tips, Part I
MotleyFool – Year-End Tax Planning Tips, Part II
Google.com Search – “Year End Tax Savings”


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By Chris Brunner
Saturday, December 9th, 2017 @ 12:00 AM CDT

Taxes |

Fair Tax Legislation

Like most small business owners, I cringe when paying taxes. It’s my duty as an American citizen, however, I question if taking such a large chunk of what I earn is the right way.

Enter the Fair Tax legislation also known as H.R.25.

The Fair Tax repeals the income tax, employment tax, and estate and gift tax. A national sales tax of 23% on the use or consumption in the United States of taxable property or services would be implemented. In other words, only the money you spend would be taxed.

1) Liberation of skilled workers.

Burns argues that income taxes fall hardest on skilled men and women who work hard in, and sometimes own, America’s small businesses. The burden of time and fees is the single largest thing that keeps these workers from accumulating wealth.

These workers are not represented by anyone in Congress, whether Democrat or Republican. Our laws are written by special interests that range from the AARP to the nameless lobbyists who tack on special tax breaks that benefit a single company or industry. That’s the way it is. It is an entirely corrupt system.

2) If you don’t spend your income, everyone benefits from it.

By not spending the money you earn, you are saving it. This extra cash flow will open up new capital for our economy. It would provide new cash for bank deposits, inventory for stores and manufacturers, and capital for equipment. Without the drain of taxation, a larger supply of capital would force down interest rates.

3) Greater equity in taxation.

The only true winners in our current tax system are the lobbyist who represent self-interest groups at the ultimate expense American small business owners like you and I. Both political parties fail to recognize that the worlds of work and entitlements are on a collision course.

Recommended Reading:

FairTax.org – Americans for Fair Tax
The FairTax Book by Neal Boortz
Thumbnail Sketch of the FairTax


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By Chris Brunner
Friday, December 8th, 2017 @ 12:00 AM CDT

Taxes |

Building Your Office

“The most productive office is one that is not only comfortable and attractive, but is also functional.”

Last year when I moved my home-based business into a leased office space, I needed to select a new desk setup. I chose a corner desk with a desk extension off the left side. Behind me I have a bookcase/shelf system that holds various decor and books. The ad photo above shows the desk setup that I purchased.

I love this setup not only because it looks great, but also because it’s extremely functional. The setup fulfills every need I had including a comfortable computer position, a desk for writing and stacking and even an attachment to place sticky notes.

Need a comfortable office chair? They are expensive, but I highly suggest a Herman-Miller Aeron chair. It is by far the most comfortable office chair I have ever sat in (and I’ve tried alot of chairs!). Don’t settle for a cheap alternative!

Recommended Reading:

Consider needs first in office furniture
10 Common Home Office Mistakes
How to Use Artwork to Enhance Any Room


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By Chris Brunner
Thursday, December 7th, 2017 @ 12:00 AM CDT

Ownership |

Protecting Your Clientele

Headhunting is a common practice these days.

An employee informs you that he will be leaving his positions in order to take up a new job offer. Soon you learn that this new job offer came from a direct competitor. Chances are, your employee will try to take customers with them.

How can you protect the employee/company/customer relationships that you’ve worked so hard to gain?

Restrictive Covenants – require employees who interact with customers or work with confidential information to be bound by a non-compete or non-solicitation agreement or both.

Keeping Former Employees Away From Your Customers

Recommended Reading:

Nolo.com – Non-compete Agreements
FindLaw.com – Non-compete Agreements
Business Owner’s Toolkit – Non-compete Agreements


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By Chris Brunner
Wednesday, December 6th, 2017 @ 12:00 AM CDT

Ownership |

Absolut Advertising

If you’ve looked at a magazine within the last 25 years, you’ve probably seen at least one Absolut Vodka advertisement.

It’s been named one of the 10 best campaigns of the 20th century by America’s Advertising Age Magazine. To date, it comprises 1,450 original ads, with more added each month.

“Why are ABSOLUT ads so memorable? Why do collectors crave them? Why are famous artists and writers enthusiastic about creating them? The concept is easy and the execution brilliant. First, two simple words — and the first is always the same — second, a single stunning, image that complements the headline. Like a couple in love.

It proves that advertising doesn’t have to be complicated; rather, advertising can and should respect people for their wit and intelligence. The most impressive, impfactful ads are often the simplest. This knowledge is key to the ABSOLUT brand’s success”

–Richard W. Lewis, ABSOLUT Worldwide Account Director

AbsolutAd.com


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By Chris Brunner
Tuesday, December 5th, 2017 @ 12:03 AM CDT

Marketing |

What IRS Auditors Look For

As an entrepreneur, you may have or know someone who has been audited by the IRS. If an audit is in your future, stay calm and understand what the auditor will be looking for…

1) Did you report all of your business sales or receipts?
2) Did you write off personal living costs as business expenses?
3) Does your lifestyle square with your reported income?
4) Did you take cash or otherwise divert income without declaring it?
5) Did you write off personal auto expenses as business?
6) Did you claim personal costs as business expenses?
7) Are you filing payroll tax and making tax deposits for employees?
8) If you hire people you call “independent contractors,” are they really employees?

What Auditors Look for When Examining a Business

Recommended Reading:

Top 20 Tips for Surviving an Audit
How to Reduce the Chance of an Audit
Audit Technique Guides by Industry


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By Chris Brunner
Monday, December 4th, 2017 @ 12:01 AM CDT

Taxes |

Marketing with Postcards

Postcards may be one of the best kept secrets of modern marketing.

They can produce a surge of traffic to your web site or a flood of high-quality sales leads. Campaigns are easy to track and almost everyone reads post cards, even the good folks who throw out all your bulk direct mail!

How can you market effectively by using only postcards? Here are a few important tips to keep in mind:

1) Ditch the Sales Pitch.
2) Get Right to the Point.
3) Send your postcards via First Class mail.

7 Tips for Successful Postcard Marketing

Recommended Reading:

10 good reasons to market with postcards
Marketing With Post Cards
Postcard Printing – Design Postcards Online


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By Chris Brunner
Sunday, December 3rd, 2017 @ 12:06 AM CDT

Marketing |

Defeating Spam and Phishing

An estimated 45 percent of all e-mail is defined as spam, costing business worldwide $20 billion a year in lost productivity and technology expenses, according to the Radicati Group, a market research firm in Palo Alto, California.

Following are five critical tips which will help you create a more productive workplace that is better protected against spam and phishing attacks–even if you have minimal or no IT staff.

1) Make sure your employees are aware of “phishing” attacks.
2) Educate employees on the how-tos of secure e-mail usage.
3) Protect your business from being “phished.”
4) Let your employees have some control.
5) Choose an e-mail security solution that’s right for you.

Recommended Reading:

What is Phishing?
How to prevent spam


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By Chris Brunner
Saturday, December 2nd, 2017 @ 12:01 AM CDT

Technology |

IRS Redesigns Form 941

The Internal Revenue Service recently unveiled the redesign of Form 941, Employer’s Quarterly Federal Tax Return.

The redesigned form features an improved layout, plain language instructions, simplified deposit reporting and paid preparer identification. The form is also scannable, which the IRS expects will reduce transcription errors.

“… The IRS wants to simplify its forms,” said IRS Commissioner Mark W. Everson. “The new Form 941 will help achieve that.”

Form 941 is used to report wages, tips and other compensation paid, as well as Social Security, Medicare and income taxes collected.

IRS Unveils Redesigned Employment Tax Return


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By Chris Brunner
Friday, December 1st, 2017 @ 12:00 AM CDT

Taxes |