Month: April 2022

Are You Claiming These 20 Tax Deductions?

Tax season is difficult enough without adding the complication of trying to track every expense. But when you see the amount of deductions your small business may have accumulated, you’ll soon start accounting for almost everything you spend. Here are twenty ways to save that you may not have considered, for C-corps, S-corps, LLCs, partnerships, and sole proprietorships, (though some rules may vary).

1. Rent.

If your business pays rent or a lease, that’s deductible. If you work from home you can check IRS Publication 587 for what you are entitled to. This can include mortgage interest, utilities, repairs, and insurance.

2.          Utilities.

         Electricity, water, trash, phone, etc.; all of your utilities are deductible.

3.          Office Supplies.

Everything from pens, to tissues, to light bulbs are all office supplies and they are deductible. 

4.          Furniture. 

Office furniture is considered an office supply.

5.          Software.

         Software can be claimed on the Schedule C tax form.

6.          Auto.

If you plan to deduct business related transportation expenses then it’s important to keep track of them, although the IRS does have a standard mileage rate that can be applied. Rules are different if your vehicle is solely for business purposes or split for personal use as well.  See Publication 463 for details.

7.          Travel.

If you sometimes leave your company’s home city or your tax home to conduct business, for longer than a day, than those expenses is likely deductible.

8.          Entertainment.

Schmoozing a client or throwing an office party can all be deductible, but again, different rules apply so it’s important to save receipts along with the purpose of the event.

9.          Marketing.

Anything marketing related is deductible. Everything from online ads, to business cards, to the contracted graphic designer can all be credited.

10.       Contract Workers.

Hiring freelancers and independent contractors is deductible.

11.       Wages.

Salaries you pay regular employee, including commissions and bonuses, are deductible, unless your company structure does not include regular employees, as in sole proprietorship and partnerships.

12.       Benefits.

Certain employee benefits can qualify such as insurance, education assistance, dependent care, or retirement. On Form 1040, self-employed individuals may claim personal deductions for payments made into their own retirement fund.

13.       Gifts.

Gifts for your employees are deductible, to an extent.

14.       Insurance.

Many types of insurance are deductible like business insurance and the owner’s health insurance are fully deductible. Other write-offs can come from auto, liability, property insurance, as well as costs of worker’s comp. While small businesses may receive additional credits for employee health coverage.

15.       Taxes.

Ironically enough, the taxes you pay for the cost of doing business can be written off, in addition to employer taxes. This includes unemployment, FUTA, and, FICA, and can also include from federal to local income, or sales tax and property.

16.       Money Owed.

If your business loaned money that wasn’t returned, this can be claimed as “bad debt.”

17.       Interest.

If your business is paying down a loan taken from a traditional institution, the interest payments can be deducted.

18.       Professional Fees.

Legal and accounting fees for your business are deductible.

19.       Startup Costs.

Business expenses are discussed in Publication 535, but typically startup costs are viewed as capital expenses and considered investments. These deductions can happen over multiple years.

20.       Inventory.

If your business handles a physical product or keeps any kind of inventory, then the cost of the goods you sell is deductible. This can account for cost of raw materials, storage, factory overhead, and labor.

         Knowing these entitlements are available, next tax season may start with a plan to track and organize much more of where your business is spending. Which, in the end, will keep you and your accountant smiling.

How To Pick A Name For Your Startup

It’s less than ironic when entrepreneurs go through all the complexities of starting a business, and find themselves still stuck for a name. A basic requirement for a title might be to pick something that will reflect your intention or inspiration behind your business. One thing is certain; you need a name you love.

Your title should be catchy and memorable, yet symbolic of what you do. Something too ambiguous will leave people confused. A dose of mystery can be an excellent marketing strategy to create intrigue, but when trying to attract your first customers, you’ll have better success if your messaging is self-explanatory. No matter how cool, a vague title will be extra challenging to brand. If your name represents what your company does, you already have a foundation to build your voice around, without having to define a fundamental identity. The goal is to connect with potential clients, not make them guess, because chances are they won’t. You also want to consider SEO, and traffic brought in from searches of the type of product or service you provide.

A name tells who you are, but be careful that it’s not so specific it gives no room to grow. In case your business expands its menu of offerings, be mindful, so that you won’t need to change your name later.

You want an original title. Run thorough web searches for your choices. Check for available domain names, trying to secure a .com if you can. If the domain you prefer is taken, there’s a chance the owner is willing to sell. 

See who else using the name you want. If your business is entirely different from other companies, than there should be no interference or conflict. If you plan to register as a corporation or LLC, check with the Secretary of State that there’s no one else with a name so similar that you may not be able to register. To determine if you can trademark it, search USPTO.gov.

If you really are suffering a block and cannot seem to come up with a name that sings to you, try a site to help brainstorm. VisualThesaurus.com let’s you visually play with keywords. Naminum.com produces theme-based titles. Shopify Business Name Generator also lets you check for domain availability.

Once you have a handful of options, say them aloud to make sure they still sound good. Then ask friends and family on how the names translate to them. They may have insights and perspectives unseen to you. There may be negative cultural or linguistic implications you may not know, or you may find that your message doesn’t hit as clearly as you expected. They may also see potential in something you’re overlooking or downplaying.

Sometimes just stepping away and coming back to an idea with a clean slate and fresh eyes is all that is needed. Inspired moments tend to occur just at the right time, and it’s better to skip contenders that don’t quite fit. Your business is your baby; it’s what you produce in the world. The name you choose should be iconic of the mark you leave and worn with confidence.

How Can Startups Set Up Bookkeeping

Even if you have superior accounting skills, the idea of setting up a bookkeeping system for your startup can still feel like a monstrous undertaking. But with a proper approach, the thought doesn’t have to loom like a mountain’s path. 

With good organization and the right software, the process of getting started can flow more like rolling hills than impassable terrain. Like many other initial systems you set in place, they need to function efficiently down the line, carefully avoiding any potential accidents or obstacles in operations. The extra energy put into researching and implementing the best accounting framework from day one, can save untold time, money, and frustration in the future. With some great options in bookkeeping applications, it’s just a matter of being prepared with your current records and clear in your financial goals moving forward.

If you plan to stay small and don’t intend on expanding, then cash accounting is probably the best method. It allows you to record cash flow as it comes in and goes out, making your books simple and straightforward with minimal adjustments. For those companies seeking to launch themselves to higher realms, accrual accounting is the logical method as it allows for more flexibility to reflect what your bottom line actually is and then present more holistic data to potential investors. With accrual accounting income and expenses are recorded at the time of delivery rather than time of payment.

You’ll need to determine which bank to open a business account, as it’s much easier to track spending and profit if you have a separate account outside of your personal funds. When shopping for the right bank, consider fees charged, services offered, transaction limits, online and mobile capacity, physical locations, security, customer support, rewards, interest rates, and possible credit or lending options.

Now it’s time to see which software is appropriate. It is possible to do manual record keeping, but even a simple spreadsheet program like Excel will save endless hours of input and enable at-a-glance information that’s easy to see and read. 

For more complex capabilities, Quickbooks is the most universally popular way to optimize your record keeping. Automatically integrate between accounts, track income and expenses, even generate invoices and reports to help project revenue or analyze the overall financial outlook of your company at any moment. 

Be ready to receive your first buyers by having a payment system in place. Even a tool as simple as PayPal or Stripe will open you to digitally accept transfers for a small fee. For advanced processes like invoicing and receipts or international payments, then Recurly or Chargebee are designed for those services.

If you have employees, you’ll need a dependable payroll system. There are PEO’s and HR solutions that specialize in this, but for small startups, just be sure to cover your legal responsibilities. Ensure working status of staff, calculate payroll tax to be withheld, register for payroll tax in your state(s), and file employment tax forms. 

Now you’re up, running, and keeping track. Remember to be consistent reconciling your bank statements with your company ledgers regularly, and avoid getting backlogged. Establish a habit of generating reports to maintain a clear vision of where you are fiscally in the present and how far you can expect to excel in the coming quarters.

 When Is The Right Time To Start Your Business

No matter how fated some things seem, when it comes to executing our dreams, there is no preset plan for when and where it will happen. If you have the ideas, the clear plans, and life seems to align so that your goals could possibly come to fruition, then it’s time to jump in and start your business.

You’re motivated and inspired; you have an awesome product and a vision for how your brand will look. You’ve done the research. For example, you understand the logistics of packaging, transport, accounting, and how to structure as a corporation. You’ve checked out the competitors, their pricing, and realized which key advantages set you apart. You know your niche. You’re figuring out how to start, but before making it official, you stop at the idea.

If you’ve been able to successfully test your product several times, then it could be time to get out of your comfort zone and hit the ground running. Host a pre-launch, or soft open to create a buzz and gauge audience response. When sales begin you’re ready to launch. As soon as customers have their wallets out you’re in business. Capitalize on that energy to create even more momentum; strike while the iron is hot.

You don’t need to know exactly where the road will lead; figure it out as you go. Start by generating word of mouth advertising, and keeping a consistent social media presence. Gather feedback from your followers to help determine potential directions. Learn from others and seek mentors who have been successful in your field or in their own. Save yourself the mistakes they’ve made and try to acquire any hacks that only come through experience. Soon you’ll build a stable foundation, develop a fluid brand, and look toward marketing strategies and future financing options. One step at a time, as the most important step is the first one.

Timing will never be perfect for any of our big moves in life. It’s difficult not to suffer analysis paralysis overwhelmed by factors, choices, and “what if’s.” Sometimes it’s just a matter of blind faith, confidence, and intuition to open new doors of opportunity. Don’t fret over getting all of your ducks lined up, once you have a few in a row the rest will follow, as long as the leader stays on track. So as long as you have the discipline, the commitment, and the drive, all that’s left is the decision to take the plunge.

Human resources For Your Startup

One of the easiest ways to increase office efficiency and improve employee experience is to make your human resources virtual. The latest software platforms allow you to automate tedious management systems so you can focus on doing the work, rather than how it will be done.

Zenefits is absolutely free, which is ideal for any young startup. From this one platform you can manage scheduling, payroll, PTO, administer benefits, and onboard new hires. They also have a feature to cover any governmental compliance needs, with a built-in calendar to ensure your important deadlines won’t be missed. Zenefits wants you to, “spend less time on low priority tasks.”

For a low-cost, no-contract option, Kin is an application that makes filing employee paperwork a breeze. Kin will centralize all your files, manage PTO and leave requests, and track time off. Kin has systems for onboarding and handling employee data within a team directory. It also provides space for employee feedback and objectives.

TSheets is a revolutionary tool for time management as it integrates Quickbooks and boasts GPS time-tracker. With a mobile app, its features are available across devices. Geotracking lets employees clock in and out from anywhere, even for breaks and lunch. Interactive capabilities allow entire teams to follow a project’s status at a glance, and remotely edit, publish, and share with ease. Predictive planning helps determine probable timetables necessary for future tasks and goals, as well as estimated payroll.

Workable is world-class recruiting software made to simplify the hiring process. In a single click, post your positions on hundreds of top sites and streamline the vetting process. Create employee profiles, collaborate with hiring teams, schedule interviews, and get approvals automatically on a security-enhanced platform. Workable has renowned global support, and connects with major partners like LinkedIn and Google.

With as much effort that goes into starting a business and keeping it running, converting to automating software for the mundane jobs involved with HR, might be an obvious choice. Whether your company is in its first stages and manpower is spread thin, or you’re a larger operation with a full-scale workforce, these platforms are designed to make operations cohesive, while keeping employees satisfied, so business stays moving at full-speed.