Archive for small business
Business Use of Your Home
Posted by: | CommentsTo deduct expenses related to the business use of part of your home, you must meet specific requirements. Even then, your deduction may be limited.
To qualify to claim expenses for business use of your home, you must meet both the following tests.
1. Your use of the business part of your home must be:
a. Exclusive (however, see Exceptions to exclusive use, later),
b. Regular,
c. For your trade or business, AND
2. The business part of your home must be one of the following:
a. Your principal place of business (defined later),
b. A place where you meet or deal with patients, clients, or customers in the normal course of your trade or business, or
c. A separate structure (not attached to your home) you use in connection with your trade or business.
Exclusive use. To qualify under the exclusive use test, you must use a specific area of your home only for your trade or business. The area used for business can be a room or other separately identifiable space. The space does not need to be marked off by a permanent partition.
You do not meet the requirements of the exclusive use test if you use the area in question both for business and for personal purposes.
Exceptions to exclusive use. You do not have to meet the exclusive use test if either of the following applies.
1. You use part of your home for the storage of inventory or product samples.
2. You use part of your home as a daycare facility.
For an explanation of these exceptions, see Publication 587, Business Use of Your Home (Including Use by Daycare Providers).
Principal place of business. Your home office will qualify as your principal place of business for deducting expenses for its use if you meet the following requirements.
· You use it exclusively and regularly for administrative or management activities of your trade or business.
· You have no other fixed location where you conduct substantial administrative or management activities of your trade or business.
Alternatively, if you use your home exclusively and regularly for your business, but your home office does not qualify as your principal place of business based on the previous rules, you determine your principal place of business based on the following factors.
· The relative importance of the activities performed at each location.
· If the relative importance factor does not determine your principal place of business, the time spent at each location.
If, after considering your business locations, your home cannot be identified as your principal place of business, you cannot deduct home office expenses. However, for other ways to qualify to deduct home office expenses, see Publication 587.
Which form do I file? If you file Schedule C (Form 1040), use Form 8829, Expenses for Business Use of Your Home, to figure your deduction. If you file Schedule F (Form 1040) or you are a partner, you can use the worksheet in Publication 587.
More information. For more information about business use of your home, see Publication 587.
Filing Requirements for Self-Employed Individuals
Posted by: | CommentsSelf-employed individuals, sole-proprietors, independent contractors and persons who have net earnings of $400 or more are required to pay self-employment tax by filing Schedule SE (PDF), attached to their Form 1040, U.S. Individual Income Tax Return. Employees of a church that receive income of $108.28 or more, but do not receive a Form W-2 for the earnings must also pay self-employment tax by filing a Schedule SE, attached to Form 1040, U.S. Individual Income Tax Return.
As a self-employed individual (someone who owns an unincorporated business) or an independent contractor, you are required to report income and expenses on a Schedule C (PDF) or C-EZ (PDF). Your net profit may be subject to SE tax. You must file a completed Schedule SE attached to your Form 1040, U.S. Individual Income Tax Return.
As a member of a partnership that carries on a trade or business, or as a member of a Limited Liability Company (LLC) that chooses to be treated as a partnership, your distributive share of its income or loss from that trade or business is included in your net earning from self-employment. These entities must report the business income and expenses on Form 1065, U.S. Return of Partnership Income, along with a Schedule K-1 reporting each partner’s net income or loss. You must file a completed Schedule SE attached to your Form 1040, U.S. Individual Income Tax Return.
If you have employees, you must pay employment taxes, including Federal income, Social Security, and Medicare taxes.
If you manufacture or sell certain products, operate certain kinds of businesses, use various kinds of equipment, facilities, or products, or receive payment for certain services, you may need to pay excise taxes.
Estimated tax is the method used to pay (including SE tax) on income not subject to withholding. You generally have to make estimated tax payments if you expect to owe taxes, including self-employment tax, of $1,000 or more when you file your return. Use Form 1040-ES (PDF) to figure and pay the tax.
Looking for a Business School?
Posted by: | CommentsHere are Tips on Finding the Best and Ditching Whats Not…
Whether you are a parent scouting for the best schools in town to educate your business professional wannabe, or a student on the lookout for the first rate business schools, it is important that the right choice be made. And to be able to make the right choice, you should be able to tell which business schools offer the best training curriculum and facilities.
A good school can be measured by the alumni it has produced, the programs it can offer, and, best of all, by the ranking that it gets from several survey bodies across the globe. If you only want the best, rankings can help you make the decision. There are rankings for the schools that are selective in their enrollment process, there are those who are ranked high because they constantly procure awards from business institutions, and there are those who are recognized for their contribution in the business community.
Who does the rankings for these business schools, anyway? Practically everyone and anyone. There are surveys that are being conducted (mostly annually) and the best schools are rated by several people. Now, just how important are rankings anyway? Are these enough to prove that the top schools that you are scouting are reputable or that they provide quality set of courses?
Keep in mind that most of these schools already have proven track records in providing the best quality of business education and producing choice graduates. The only difference that rankings or accreditations make is reputation. Once a university gets a certain label on its name, then you are assured that their faculty, resources, facilities, and curriculum have all passed a definite criteria on quality.
If you are still confused on which school to choose, then it’s time to assess your goals on your career. These career objectives should coincide with the values that certain schools offer (not to mention that they have the specific program that would suit your needs). Once you narrow down your career choices, then the number of schools on your list would automatically be limited.
To further trim down the number of schools on the list, it’s time to consider the location and your budget. Full-time MBAs, of course, cost more and take longer to finish. There are business schools that offer executive and part-time programs on this. Remember that you are not looking for a low-budget program. Instead, keep in mind that you are looking for a school that provides a good return on your investment.
If your list remains long, then it’s time to consider the schools’ service department on career. Do they really produce good results? With more hits to any particular school, then it would mean that their graduates and MBA holders are hired more than the competitors. Receiving any form of scholarship would also greatly influence any potential candidate’s choice of school.
Most of the top business schools (especially those that are constantly ranked to be one of the best) have world class services, that is why it is best to prepare well before embarking on their entrance examinations and grueling interviews. Only the best of the best are accepted on the top business schools (especially the Ivy League)—the la crème de la crème; so expect the best and prepare for the worst!
Tips on Choosing a Business School
Posted by: | CommentsSome people enroll in a business school just for fun, for leisure. Some say it’s for experience, for others career advancement is their reason. Other professionals would say going to business schools is required for a possible job promotion. Peer pressure is also one, “My friends are enrolling in a business school so I’m going to join them too.” No matter what the reason may be, choosing a business school may affect your career or lifestyle. It is imperative that we analyze the business schools first before you enroll, this will help determine your future career.
The website of The School of Management at the University of Dallas in Texas provides the Top 100 rankings of Business Schools. Business Week also features B-Schools page in their site that presents Business School Rankings and profiles. Bschool.com also gives out International Side by Side rankings of the best Business Schools. About.com can also help you in identifying top business schools for grads and undergrads. We may use the database of these sites to track down credentials if a Business School of your choice is really worth your time, money, and effort.
Before you spend money for the enrollment, isn’t it wise if we will examine first the profile of the school and consider some important aspects? Here are some guidelines to light your path.
* Degree
Does the Business School your eyeing for offers a degree that you want? There are even several options whether you would like to take a 2-year or 4-year program. If the degree that you wish to take is not in the list then look for another school, don’t waste your time in a school where your chosen degree is not offered.
* Cost
Can you afford the tuition fee and other possible expenses? Next thing that you will consider is the cost of your enrollment, is it worth your money? If you are really dying for that school and don’t have enough budget you can apply for a part-time job for an extra income before the enrollment. In this case, you can gather more funds by saving for your tuition fee. You’re lucky if you don’t have a problem with the budget but it doesn’t end there…
* Future
Consider the graduates of the school if they are achievers or successful in their fields. Most likely, the products of that Business School reflect the capability and excellence of the school. If you know a graduate of that school, have a little chit chat with him and get some feedback or bits of advice. After all, your goal is to obtain a brighter future right?
* Curriculum
Request for a curriculum and study it carefully. Is it broadly focused like a general program for business administration or is it narrowly focused meaning there are areas of specialization? Which program works best for you? If you are more on production, then choose a curriculum that is specialized in production.
* Facilities
Isn’t it more convenient to study in a school equipped with great facilities, classrooms, libraries, and other buildings? This will add up to the school’s competitiveness and degree of professionalism.
* Schedule
Does the school offer a more flexible class schedule? Does it only have one day fixed schedule? Know what is best for you. Do not choose a class schedule that overlaps your other work activities. You do not want to run in late always do you? You can only serve one master at the same time.
* Faculty
Get to know the faculty staff of the school. Are they morally upright? Are they also academically outstanding with masteral degrees and achievements in their own fields? Consider those instructors that you will encounter, are they worth your time? You should be able to learn a lot from them that will be beneficial for your growth personally and professionally. The teachers should be dedicated enough in teaching othewise you’re just trashing money and wasting time on them.
* Dignity or Reputation
If you can afford to enroll in a prestigious Business School then do it. There are sites that you can visit, as mentioned a while ago, to determine the high ranking business schools. Bear in mind also that not all top-ranked Business Schools have good reputation. Enroll in a school that is and was not involved in any malicious or unethical scandals, this way the dignity and integrity of the school is preserved.
* Student Feedback
Sometimes, reading thorugh the brochures and official websites of these schools are not sufficient if you are a bit reluctant about the credentials of the school. Interview some students and get reactions from them. Based from their comments was the school good enough for you or are you not satisfied with what you heard?
There you go folks! Those are just some of the factors that you should watch out for in choosing a Business School. Keep in mind that you hold your future, no matter how perfect and how outstanding your Business School is if you don’t strive for better perfromance, it will all be wasted. The abovementioned are only standards or criteria that will guide your way but in the end, it all depends on you.
Your Property Taxes And A Property Tax Auction
Posted by: | CommentsIf you fail to pay your property taxes when they are due and continue to avoid paying them, you stand a good chance of accumulating penalties and interest. After a given amount of time, the county office can place a lien on your property. If you continue to avoid paying the property taxes, you home can succumb to the auction block. This can be done even if you owe an outstanding mortgage on the home. You or someone else is going to have to pay the outstanding balance owed on the property taxes. It is always best to pay the taxes, but if you do not, an auction can take place.
How the auction works is the county decides you have had ample time to pay the property taxes and you have made no effort to do so. They will then notify any lenders of intent to auction your property to recoup the taxes monies owed. Once the process starts, you still have time to save your property before the day of the auction. If you have the resources, you can apply monies to the delinquent property taxes and have your property taken off the auction block.
Once your property is deemed delinquent in property taxes, the county will add this information into the file with other properties that are going up for auction as well. Once this procedure starts, there is only one way to stop it, you have to pay the taxes and have it taken off the list. You will have to pay the penalties and any interest that has accumulated over the years. When you have a receipt stating payment has been made, your property is then safe from auction and you retain ownership.
If you do not pay the property taxes, the auction will go as planned. People sign up to participate in a property auction and are allowed to view information about the property before bidding starts. Many bidders will search the title to see if there are any other lien holders on the property in question. Even if you are a mortgage holder, your property can be auctioned off. The legalities of a mortgage are more intense then the auction itself. The county will put a minimum limit requirement on the property to recoup as much of the tax owed as possible and allow bidders to bid accordingly. Once some wins the bid, you have a new situation to handle.
Chances are, the winning bidder has searched the title and now knows who the mortgage lender is and where to reach them. The winning bidder does have a stake in the property and now it is a matter of obtaining the property from you as the owner in a legal sense. This is procedure is going to be lengthy and costly in some cases. You are wise to contact a property tax attorney before you let this matter get this far, because you will have more problems now than you had before with just owing property taxes.
Afraid To Take A Vacation? Put Your Business On Cruise Control
Posted by: | CommentsBy Nicole Dean
“I started my business so that I’d have freedom, but I’ve never felt more trapped….”
I come across a statement like that at least once a day on a forum post or in email. You start your internet business because of the freedom of being your own boss and working on your own schedule and then promptly sit on your hind-end for 12 hours/day EVERY DAY. No wonder you feel burnt out. And no wonder family and friends are feeling neglected when all you can think and talk about is your business.
Freedom sounds pretty miserable to me if it means freedom from fun and the ones that I love.
So, how do you break free?
Start by taking a good look at your business and getting your goals and priorities straight. Don’t worry, it’s not nearly as complicated as it sounds. I’ll walk you through it right now. Ready?
Grab a pen and a piece of paper or open your favorite word processor. Divide your page into four columns.
Now you’re ready to brainstorm. Write everything down as it comes to mind. Don’t overthink this. Just start writing.
First, figure out what is working. Whatever it is. It may be one of your websites, your ecourses, a joint venture, a certain marketing method. Where is the bulk of your money coming from, currently? (If none yet, where do you believe will be the place where the largest profits will come from?) Write those items in column #1 under: “Do More”.
Second, figure out what is not bringing in money. Is it hanging out on forums or posting classified ads to freebie sites? Is it endlessly checking your stats, or email? What are your daily time-suckers? Write those under column #2: “Do less”.
Third, figure out what could work better. Do you have upsells in place? Are your websites designed to bring you cash from every visitor? Make a list of ideas in column #3: “Improvements”. (If you don’t know yet, don’t worry. There are plenty of ways to improve your business as you learn and grow.)
Fourth, figure out what can be automated. Which tasks are repetitive and boring, albeit necessary? Many of those types of tasks can be automated with simple tools. For instance, if you’re submitting articles to directories by hand, there are tools and services to do that for you. Add these to column #4: “Automation”.
Now that you’re armed with your list, it’s time to get to work.
Look at your list in Column #1: “Do More”. Those are the tasks that you should focus your energies on. It’s a good idea to tackle one or two of the tasks on that list first thing in the morning – every morning. Believe me, it’s much more productive than checking out your favorite blogs or logging into twitter. And you’ll be amazed at how much you can get done quickly when your mind is fresh.
Look at your list in Column #2: “Do Less”. These activities should be forbidden until after you get your #1 list done, if you do them at all. For instance, hanging out on Twitter is fun, but do not do it until everything in column #1 is finished for the day.
Now, go back to Column #1, 3, and 4. Your “Do More”, “Improvements”, and “Automation” lists.
Look at all of the items that are on those three lists. Now, circle each task that you …
• Can’t Do
• Don’t Have Time to Do
• Don’t Want To Do
Those are the tasks that you’ll outsource.
Freedom means a lot of things. It means freedom to do the things that you want to do. However, it also means freedom to NOT do things that you really dislike doing.
For me, it’s graphics. I have outsourced all of my graphics since 2001. I don’t have the time, patience or inclination to learn how to make my own graphics. I have more important things to do, like write this article and then go on a bike ride with my son. Perhaps when I get back from my bike ride, my graphics will be waiting for me in my inbox.
Now, that’s freedom to me.
Want to outsource but don’t know where to start? Nicole Dean and Jimmy D. Brown invite you to Outsource Weekly where you’ll learn how you can get free time (and earn more money) while others run your business for you.
Borrowing Growth Capital for Your Small Business
Posted by: | CommentsLenders expect working capital loans to be repaid through cash generated in
the short-term operations of the business, such as, selling goods or
services and collecting receivables. Liquidity rather than overall
profitability supports such borrowing programs. Growth capital loans are
usually scheduled to be repaid over longer periods with profits from
business activities extending several years into the future. Growth capital
loans are, therefore secured by collateral such as machinery and equipment,
fixed assets which guarantee that lenders will recover their money should
the business be unable to make repayment.
Read More→
Forecasting and Obtaning Capital for Your Small Business
Posted by: | CommentsForecasting the need for capital, whether debt or equity, has already been
discussed.
The capital to finance a business has two major forms: debt and equity.
Creditor money (debt) comes from trade credit, loans made by financial
institutions, leasing companies, and customers who have made prepayments on
larger–frequently manufactured–orders. Equity is money received by the
company in exchange for some portion of ownership. Sources include the
entrepreneur’s own money; money from family, friends, or other
non-professional investors; or money from venture capitalists, Small
Business Investment Companies (SBICs), and Minority Enterprise Small
Business Investment Companies (MESBICs) both funded by the SBA.
Debt capital, depending upon its sources (e.g., trade, bank, leasing
company, mortgage company) comes into the business for short or
intermediate periods. Owner or equity capital remains in the company for
the life of the business (unless replaced by other equity) and is repaid
only when and if there is a surplus at liquidation of the business–after
all creditors are repaid.
Read More→
Pricing policy for your small business
Posted by: | CommentsIdentifying the actual cost of doing business requires careful and accurate
analysis. No one is expected to calculate the cost of doing business with
complete accuracy. However, failure to calculate all actual costs properly
to ensure an adequate profit margin is a frequent and often overlooked
cause of business failure.
Establishing Selling Prices
The costs of raw materials, labor, indirect overhead, and research and
development must be carefully studied before setting the selling price of
items offered by your business. These factors must be regularly
re-evaluated, as costs fluctuate.
Read More→
Cash Flow Management: Budgeting and Controlling Costs
Posted by: | CommentsIf there is anything more important to the successful financial management
of a business than the thorough, thoughtful preparation of Pro Forma Income
Statements, it is the preparation of the Cash Flow Statement, sometimes
called the Cash Flow Budget.
The Cash Flow Statement
The Cash Flow Statement identifies when cash is expected to be received and
when it must be spent to pay bills and debts. It shows how much cash will
be needed to pay expenses and when it will be needed. It also allows the
manager to identify where the necessary cash will come from. For example,
will it be internally generated from sales and the collection of accounts
receivable–or must it be borrowed? (The Cash Flow Projection deals only
with actual cash transactions; depreciation and amortization of good will
or other non-cash expense items are not considered in this Pro Forma.)
Read More→
