The Emotional Rollercoaster of Business Ownership: Some Days and Then One

The Emotional Rollercoaster of Business Ownership: Some Days and Then One
Day

To all my entrepreneurs

Some days you feel like conquering the world.

Some days you feel like giving up and you ask yourself why

Some days you feel like just maybe your dreams will come true

Some days you like if I do give up I will be in more debt than I could
imagine

The One day that client or customer comes in and does business with you

The next day you wake up with hope

Then day after you get a bill so high you need a liquid lunch break at 11 am


Then all over again you feel like someday, then when another client/customer
comes in it feels like one day

IRS Fines Atlanta for Late Payments

IRS Fines Atlanta for Late Payments

Edited By: Leigha Baugham myfoxatlanta.com

ATLANTA (MyFOX ATLANTA) - The city of Atlanta has been slapped with a heavy fine. The sanction comes from the IRS and taxpayers will be left footing the bill.

Atlanta's CFO confirmed that the IRS imposed a levy on the city that includes late payment penalties in excess of $1.4 million because city staffers repeatedly failed to pay payroll taxes on time.

www.1stunitedbusinessadvisors.com

Small clients (ac)count on CPAs as counselors

http://www.1stunitedbusinessadvisors.com/

Small clients (ac)count on CPAs as counselors

By Hilary Potkewitz

Michele Harris' first phone call when she had good news or needed advice about running her eight-year-old marketing business used to be to her father, a retired auto supply executive.


"Accountants are reassuming the position of business coach, financial adviser, mentor and therapist, in addition to record-keeper. This marks a return to the traditional role that accountants held before business services became so specialized."

Facts and Figures

From 1stunitedbusinessadvisors.com:

*FSA Expenses�As a general rule, you can deduct medical expenses relating to your care and well-being to the extent the annual expenses exceed 7.5% of your adjusted gross income. The same expenses generally may be reimbursed through a flexible spending arrangement (FSA). However, in a new ruling, the IRS said that an FSA could not reimburse the cost of a breast pump. Reason: While breast pumps are helpful, they do not treat or mitigate a medical condition.

*Supply and Demand�Don�t be shortsighted in your treatment of small company suppliers and vendors. For example, using (or not using) a discount may cost you a little now, but save you lots later on. In the worst-case scenario, a key supplier might be driven out of business, forcing you to deal with a larger company with inflexible prices. That�s not to say you should not negotiate a fair price with your current suppliers and vendors, but keep the big picture in view.

New Law Generates Energy Tax Breaks

From: 1stunitedbusinessadvisors.com

The new economic stimulus law enacted earlier this year�the American Recovery and Reinvestment Act of 2009provides tax incentives for saving energy both at home and at work. Here is a brief overview of the key tax rules in this area.

Tax breaks for homeowners: The new law triples the residential energy credit from 10% to 30% for qualified expenses after 2008 and before 2011. The list of qualified expenses includes:

*insulation materials;
*exterior windows (including skylights);
*exterior doors;
*central air conditioners;
*natural gas, propane and oil water heaters, or furnaces;
*hot water boilers;
*electric heat pump water heaters;
*certain roofs and stoves; and
*advanced main air-circulating fans.

In addition, the lifetime $500 dollar cap has been eliminated. Instead, the new law imposes a limit of $1,500 for 2009 and 2010 combined. The dollar caps for solar hot water property, geothermal heat pumps and wind energy property installed by homeowners are also removed. However, a $500 cap remains for qualified fuel cell property costs.

Note that the new law also enhances the credit for plug-in electrical vehicles purchased after 2009. The base amount of the credit for qualified plug-in vehicles will be $2,500 (subject to a phaseout once a manufacturer sells 200,000 units). Note: Plug-in vehicles are not in the commercial marketplace yet.

Tax breaks for business owners: If you own a business building, you may be able to claim a tax deduction equal to $1.80 per square foot for energy systems placed in service after 2005 and before 2014. Alternatively, a partial deduction of up to $.60 per square foot may be available.

To qualify for this deduction, the following four conditions must be met:

1. The property must be installed as part of the interior lighting systems; the heating, cooling, ventilation or hot air systems; or the building envelope.

2. The property must otherwise be depreciable or amortizable.

3. The property must be installed on or in a building in the United States that meets Standard 90.1-2001 of the American Society of Heating, Refrigerating and Air Conditioning Engineers (ASHRAE).

4. The property must be certified as a part of an overall plan designed to reduce the total annual energy and power costs by 50% or more in comparison to a reference building meeting the minimum requirements of ASHRAE Standard 90.1-2001.

The new law also enhances the energy tax benefits for certain business owners. Among other changes, it increases the credit for commercial refueling stations for alternative fuel vehicles from 30% to 50%. It also raises the cap on the credit to $50,000 for property placed in service in 2009 and 2010. The previous limit was only $30,000. Finally, the new law extends the credit for electricity produced from renewable sources through 2013 (2012 for wind facilities).

This is just the tip of the iceberg. More details about energy tax breaks are available upon request.

Are You Starting a Business Late in Life?

For most people, retirement means a life of relaxation, travel or pursuit of hobbies. But for others, it is a chance to realize a lifelong dream: to start up their own business. The business might be an extension of a hobby or a new enterprise based on your field of expertise.

However, if you have harbored a desire to be an entrepreneur, don't go into the new business undertaking with your eyes closed. The rewards may be many, but so are the obstacles. Keeping that in mind, here are several suggestions for starting out:

*Consider all the ramifications of starting a business. Common scenario: Panic overtakes you the first few weeks you are away from the job. It may take a while to settle into a comfortable routine. Explore any business possibilities carefully; do not leap at the first opportunity that comes along.

*Make smart retirement plan decisions. This is a complex process that requires professional assistance. For instance, you may want to use part of the distribution from a company retirement plan as �seed money� for your new business. As the business grows, you might set up a retirement plan for yourself and any other employees.

*Delegate payroll responsibilities. Many late-starting entrepreneurs do not want to be bothered with the hassle�not to mention the potential liabilities�of handling a payroll, withholding taxes and filing tax forms. If you do not have expertise in this area, consider the use of a reputable professional or payroll service.

*Weigh the impact on Social Security benefits. A retiree under age 66 (the current full retirement age) may earn up to $14,160 in 2009 without losing any Social Security benefits. However, if you exceed this limit, you must forfeit $1 of benefit for every $2 received. The earnings limit is $37,680 for those who turn 66 this year. In that case, you lose $1 of benefit for every $3 earned. In some cases, it may pay for you to delay the start of a new business until you reach full retirement age.

*Protect your business assets. For instance, you might make provisions to continue the business if you should die or become disabled. One way to do this is to set up a buy�sell agreement with a junior partner that is funded with life insurance. The insurance proceeds can be used to buy the business from your heirs.

*Trust your business to a trust. Consider using a trust to preserve the privacy and continuity of the business. The trust may be funded with corporate or other business assets. In addition, a trust may be used as a vehicle for saving federal estate taxes. See a professional tax adviser for more details.

*Plan ahead. The best time to get started is actually before you retire from your regular job. For example, it may be beneficial to set up an office in your home while you are still employed on a full-time or part-time basis. Spend some time each week in the office planning the enterprise, organizing files, collecting lists of contacts and so on. For tax purposes, be sure to keep track of any expenditures related to the business.

In summary: There still may be time to realize your dream of owning your own business if you are at or nearing retirement. But proceed with caution.

Bookkeeping is 30% Skill 70% Discipline


Ok everyone here is the deal; bookkeeping for a small business is 30%
skill, and 70% discipline. Bookkeeping skills requires you to
understand and to follow accounting rules and procedures. A Bookkeeper
is then required to transform financial data into financial reports you
can use to make management decisions.

With that being said; whether you use the latest accounting software or
pay your accountant top dollar you will still need to apply discipline.
Discipline in organizing your financial data for your monthly
bookkeeping.

As I surf the net, I see all of the sexy computer applications and cell
phone gadgets that are marketed with promises of streamlining life’s
daily tasks. Like most people I used to buy several hundred dollars
worth of this stuff. Thinking, it will make my life easier, more
efficient and organized.

However when it was delivered, I gave up after reading the instructions.
Here lies in the basement graveyard another box with a gadget collecting
dust. I have so much unused software and gadgets I can out sell
Microsoft in a garage sale any day.

One day, I read an article "From Zen to Done" and David Allen’s
“Getting Things Done”. I wish I can say this changed my life. It
didn’t; the change needed was something I had to do internally.

And it happened, one day while I was watching an infomercial in the middle of the
night. You know the GT Xpress, the little old lady and the cooking system.
You can make pizza, corn dogs and cake all in one. While placing the
order, I convinced myself of how it would make my life easier. I
played over in my head of how can cook more nutritious meals during the
week for my family, recycle leftovers, and make a cake. Upon delivery
and the first meal, I realized I still had to plan a menu, shop, and
prepare the meal for the cooking system. The only thing this system did
was cut down on the amount of pots to clean and the time it took to cook
certain foods.

Like cooking, bookkeeping is 70% discipline. You still need to gather
and prepare on a consistent basis in order to reach a desired outcome. I
challenge you to keep your receipts for 30 days for every single
transaction no matter how big or small. You can put them in a shoe
box, trash bag or a folder; I don’t care, just keep your receipts.
Then at the end of the month I challenge you to put all of your check
stubs, bank/credit card statements, and any other financial documents in
the same box. And when you are done give them to your Bookkeeper,
Accountant, or CPA. By doing this you can reduce your accounting fees
at the end of the year. Not to mention having a clearer final picture,
and being in a position to make sound financial decisions.

Facts and Figures
*FSA Expenses�As a general rule, you can deduct medical expenses relating to your care and well-being to the extent the annual expenses exceed 7.5% of your adjusted gross income. The same expenses generally may be reimbursed through a flexible spending arrangement (FSA). However, in a new ruling, the IRS said that an FSA could not reimburse the cost of a breast pump. Reason: While breast pumps are helpful, they do not treat or mitigate a medical condition.

*Supply and Demand�Don�t be shortsighted in your treatment of small company suppliers and vendors. For example, using (or not using) a discount may cost you a little now, but save you lots later on. In the worst-case scenario, a key supplier might be driven out of business, forcing you to deal with a larger company with inflexible prices. That�s not to say you should not negotiate a fair price with your current suppliers and vendors, but keep the big picture in view.

Audit Info in New Data Book

The new IRS Data Book for the government�s 2008 fiscal year includes lots of tax return information. For instance, the Data Book shows that almost 1.4 million individual tax returns were audited out of 137.8 million returns filed in 2007, for an audit rate of 1.0%. While 22.3% of the audits were conducted by IRS personnel, 77.7% of the audits were correspondence audits.

The audit rate for individuals whose returns showed a total positive income (TPI) between $200,000 and $1 million rose to 2.6%.

One surprise: The audit rate in fiscal year 2008 for those with a TPI above $1 million declined from 9.3% to 5.6%. The IRS attributed this, in part, to activities related to sending out economic stimulus checks.

Check out my people before pennies program.

When Doing It Yourself Goes To Far

In a recession most people are finding more ways to cut costs. Instead of hiring a landscaper to cut your grass, you pull the lawn mower out of the shed and say "I will do it myself". The typical landscaper can charge $40 per cut, well at least mines does. Wow, I will save $80 per month and $960 per year.

Next, I decided that instead of taking my pet to the groomers once a month I said, "I will do it myself". How hard can it be to wash my dog? First, I'll shave him, wash him, dry him, and I'll even brush his teeth. Heck, I will even paint his nails. Great, that will save me $50 per month, and $600 per year.

Hey, I am on a roll! What else can I do myself to save money? Oh yeah, I can even wash my own car. Forget paying for a $3.00 car wash and a $1.25 for the vacuum at the gas station. Not only can I wash my own car, I can detail it. I will save $8.50 per month and $102 per year.

Now here comes the real test. I am pretty smart. So how hard can it be; on Monday I don't feel so well, on Friday while cutting the grass I pull a muscle, on Saturday I spend the entire day chasing my dog around the yard to groom him, which neither he nor my husband appreciate me using the electric shaver on the dogs private parts.

However, the only damage incurred was major fatigue. I can live with that because look how much money I saved. On Sunday I spent the rest of the day cleaning and detailing my car. The family chipped in, but after 15 minutes the kids tried to kill each other and after 45 minutes my husband went into the house to watch the game. Wow, who cares, right? Because I am doing it myself. Not only did I save, I have the body pain, fatigue and cold symptoms to prove it.

As I am sitting at my computer asleep with my eyes open at work, the light bulb goes off in my head, I can fix this. Instead of going to the doctor I can go online and self diagnose my symptoms. What the heck!!! The website says I have H1N1 swine flu. I leave work to go straight to the doctor’s office; the bill is $160 and $50 for the prescription. Thank goodness for that great prescription plan. I was correctly diagnosed with a 24 hour stomach virus.

Oh yeah, I lost $400 for a day’s worth of work for going home early. Now when I get home I am still public enemy number one. My daughter is still mad from Friday; I was late picking her up due to cutting the grass. My son is upset I missed his game on Saturday, because I was cleaning with the dog. He scored his first touchdown. As far as my husband and the dog, both took a vow of silence because of the clippers situation. He said the dog felt violated and tonight is Monday night football. Don't even try it.

I saved $94.25 but I loss $610, and everyone is giving me the silent treatment. I say this to say we sometimes fail to evaluate when doing it yourself how much we can lose. At the time it sounds great, but I want to remind you savings, budgeting and cash management should be proactive not reactive.

Each year my firm sees the same type of clients. The couple who did their own taxes, but because they did not understand tax law they claimed credits they did not qualify for. Now they are receiving less than welcoming letters from the IRS. Or even the small business owner who vows to do his own bookkeeping, but gives up after March. He is either too tired, too busy, or he couldn't understand the QuickBooks program. Last, my favorite encounter is the client who wants to cut costs. He switches his long distance, prints proposals on the backside of used paper. Then he lays off his loyal employee of ten years to outsource her job to India.

In the end, I beg you to ponder how much did they all really save? The same do it yourself couple now has to pay back taxes, penalties to the IRS, and our firm fees. As far as the small business owner he did not know how extensive bookkeeping can be, he ended up paying for one years of bookkeeping’s in a lump sum. The first three months were wrong and we had to start from scratch. Last but not least, the client that laid off his loyal worker. He soon realized that not only did she do her job, but she kept the clients happy, and went above and beyond the call of duty. She was trained in every facet of his business; even in areas he was not.

Like anything in life, everything you do needs to be thought out and done in moderation. Also, learn to respect the specialist he/she is a professional, there is a reason why they have the credentials. Furthermore, don’t be afraid of looking at future cost. Remember: Today’s savings can be Tomorrow’s liability.

1st United Business Advisors believes in People before Pennies. Staring at $5.75 per day, $40.00 week or $175.00 per month, you can have peace of mind; so you can work on your business and not in your business.