7 Little-Known Tax Deductions for Small Businesses

Many small businesses dread filing their quarterly taxes, but deductions help owners lower their tax burden. In addition to the standard deductions that most businesses take, there are lesser-known write-offs that can reduce tax bills even further.

1. Home Office
If you run your business out of a dedicated home office, you may be able to take the home office deduction. The catch with this deduction is that the space must be used exclusively for business purposes.

There are two ways to deduct a home office:

Deduct actual expenses. You’ll need to have records for the cost of painting, repairs, utilities, rent, insurance and other expenses you want to write-off.
Take the simplified deduction, which the IRS calculates by multiplying $5 per square foot of your home used for business. The maximum deduction is $1,500.
2. Contracted Workers
It’s not uncommon for small businesses to use independent contractors to take care of certain tasks throughout the year. Contracted workers are not employees, so you have less responsibilities as a business owner.

The cost of contracted labor is deductible, which will lower your tax burden.

To take advantage of this deduction, you’ll need to file a 1099-MISC to any contractor who received $600 or more from your business.

3. Janitorial Services
If you run your business from an office or you run a retail store, you may hire a janitorial service to keep your workplace clean. Cleaning services may be tax deductible, especially if the service is considered “necessary.” Many businesses can justify the need for a clean working environment, but in certain industries, cleanliness is a requirement.

4. Guard Dogs
If your business has a dedicated guard dog watching over your storefront or merchandise, you may be able to write-off the expenses associated with his care. This can include adoption fees, veterinarian bills, grooming, food and water.

Keep in mind that this deduction only applies to dedicated guard dogs. It does not apply to personal pets that you bring to work on occasion.

5. Music Equipment
Many businesses use music to improve employee productivity or create a more creative, calming atmosphere. If music is an essential component of the workplace, you may be able to deduct these expenses.

These expenses may include streaming music subscriptions, headphones, speakers and other musical equipment.

6. Customer Gifts
If you provide gifts to customers for promotional or thank-you purposes, you may be able to deduct these expenses. Businesses can deduct up to $25 per gift, and the gift must have a value of more than $4. Gifts given to family members can also be deducted if you have an independent business connection with the person.

The gift may not have your name imprinted on it, and it may not be one of a number of identical items that you intend to use for distribution.

7. Conventions and Trade Shows
The cost of traveling to and attending trade shows and conventions can be deducted if needed for employee development, marketing or other business-related purpose.

To deduct these expenses, you’ll need to keep records of all related expenses. Some webinars and local seminars may be deductible. Check with your tax professional to see if you can deduct these expenses.

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How To Dig Yourself Out Of A Bad Financial Situation

Have you recently found your company in a bad situation financially? The good news is that you’re not the only one. The bad news is that you need to fix the situation as quickly as possible before it ruins your company’s credit and reputation. Thankfully, there are plenty of things that you can do to right the ship.

Within this guide, you will discover ways to correct your company’s business finances and get out of debt.

Cut Expenses Immediately

If you’ve gotten your company into a bad situation, you need to take action immediately. It is absolutely pertinent to balance out your expenses and your revenue. One way to fix the problem is by cutting your expenses. There are plenty of ways to cut the costs of your business. For instance, you may want to order less supply for the money. If necessary, you may also be required to lay off some of your workers. This is never a fun idea, but it is something that you may need to do to save your business from bankruptcy.

Selling Assets

There is also a possibility that your company owns valuable assets. Perhaps you own a building that you no longer need? Or maybe your company owns a few valuable patents? The possibilities are really endless. If you’ve gotten your company into a tight spot, you should consider selling some of its assets. The money that you earn will prove to be immensely beneficial right away. Just make sure that you do not sell core assets. Keep everything that is considered crucial to your business and its daily operations.

Outsourcing Work

Hiring employees can be incredibly expensive. There is no doubt that having your own employees is beneficial, but it might not be feasible at the given time. With this in mind, you should consider reducing your expenses by outsourcing some of your work. Outsourcing is often frowned upon, but you need to do whatever you must to ensure that your company survives and thrives. Therefore, you should not hesitate to outsource work when you feel it is absolutely necessary to do so. After you’ve managed to correct your financial situation, you can always hire new workers.

Getting A Loan

It is essential to get the money that you need when you need it. If you do not, there is a possibility that you’re going to be forced into an untimely bankruptcy. Thankfully, there are plenty of ways to obtain money. There are personal loans for bad credit and peer to peer lending. You should always consider each and every one of your options. Carefully inspect the loans and their interest rates. A loan could help keep your business afloat for a little bit longer.

Hire An Accountant

If your company doesn’t have an accountant, you need one as soon as possible. Their presence can really make a world of difference. They’ll be able to help you set up a budget and stick with. In return, this could keep your company out of debt in the first place! Just make sure you find someone trustworthy and reliable.

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Using Personal Loans for Business Purchases: Pros and Cons

There are many times along the journey as an entrepreneur where the shortcomings of available funding can throw a wrench into your goals.

For instance, mobile repair businesses need to be ‘mobile’. Vehicles are expensive, and it’s hard to expand such a business without purchasing more vehicles and additional staff.

Investment opportunities come up all the time for those who are networking savvy. They often require a significant amount of cash to secure. Not to mention, sometimes an essential piece of equipment can break down suddenly, requiring thousands, or even tens of thousands in repair funds.

When there’s no money in the bank for these and other purchases, it becomes necessary to consider taking out a loan.

When friends and family aren’t available, and there’s no time to seek out investors, the choice will always come down to applying for a business loan — which can be difficult or impossible for some people to get — or considering a personal loan through a reputable lender.

Following are a few pros and a few cons that come with using a personal loan to make purchases for your business.

3 Pros of using a personal loan to fund your business

1. Easier acceptance

Whether you’re established yet or not, it takes time to build a business credit rating. Without a cosigner, it’s going to be very difficult to get a business loan from a traditional lender.

Most want to see a business plan, income statements, financial projections, and a financial track record showing you can take on debt and pay it back on time.

A personal loan, offered on lending websites like http://personalmoneystore.com/, can be easier to get, if you have an established personal credit rating, making this route perhaps the only available option when your business needs funds fast.

2. Zero collateral

If you have sufficient credit and a good relationship with the lender, personal loans can be had without putting up collateral. This type of loan is known as “unsecured.”

The majority of lenders offer “secured” business loans. A secured business loan will require you sign over business equipment and property, or your own personal property to protect against a failure to pay the loan back.

A personal loan provides a huge advantage if you don’t have any property to put up, and don’t wish to pester friends and relatives to cosign on your loans for you.

3. Fewer penalties

For a variety of reasons, reasons which benefit the lender, they’ll often gouge you if you choose to pay down your balance on a business loan faster. Business loans often come with penalties that personal loans do not.

Considering interest rates coming in south of 5% with a short or long term business loan, it should be obvious that lenders want you to pay that interest over the entire term in order to profit from the loan.

A personal loan will allow you to pay off the balance whenever you like, including other savings if you set up prepayment methods with the lender, and other incentives that make them more comfortable giving you the loan at the time of signing.

Funding business purchases

3 Cons of using a personal loan to fund your business

1. Lending limits

Anyone who has ever been denied a new car loan has felt this reality. Lenders aren’t terribly excited about parting ways with big dollars unless offered collateral with value and quick sale-ability.

In fact, the minimum amount a lender will give you on a business loan (let’s say $5,000 for example) is often the maximum most smaller lenders will offer on a personal loan. These terms vary, and are dependent on the lender and your credit score

Consider that a small or medium-sized business rarely considers taking out a loan unless they need an expensive piece of equipment, property, etc. In most situations where money is needed to make a significant business purchase, the personal loan amounts offered by lenders are rarely helpful.

2. Profit gouging

Personal loans are very likely to gouge into much-needed profits via higher interest. Interest rates can be cut in half when you’re approved for a business loan, particularly with the SBA.

When you’re borrowing tens of thousands of dollars, every percentage point paid in interest results in big bucks over the life of a loan. On the other hand, an 8% interest rate on a personal loan is pretty darned good if you’re borrowing a few thousand dollars for a used car, boat, or ATV.

Going the personal loan route, you could end up spending multiple thousands of dollars in lost revenue paid toward the balance of the loan, rather than using it to expand operations, make other advancements in the business, or pay outstanding bills.

3. Repayment terms

It was stated earlier that personal loans offer significant advantages such as the ability to repay the loan whenever you like without penalties. However, this isn’t much of an advantage if you’re a small business that needs a $50,000 or higher loan.

The future is still yet to be written for your growing business, and you may not have the foreseeable capacity to pay down that balance, plus interest, in the short time offered by the lender. Personal loans typically cap out at a 7 year (max) repayment window.

Business loans can be similar, depending on the type and the lender. However, low interest business loans are available to qualified business owners that extend the repayment window to as much as 25 years in some cases.

Which option is right for you?

All I can do is give you the facts:

If you qualify for a lower-interest business loan, and are comfortable with the lender’s terms, that’s likely to be your best option.

On the other hand, if your back is up against the wall in some shape or form, and a personal loan feels like your best option, go for it.

Whichever you decide to choose, always compare several lenders. While less shady types are increasingly harder to find as the FTC cracks down and passes more and more rules, different lenders will offer different options.

And, those options could mean all the difference to a small growing business in need of fast cash!

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Why Outsourcing Your Accounting Makes Sense for Small Business Owners

Were you aware that out of all the new businesses established each year, that only 20% of them make it through their first year? And of that twenty percent, only half of them survive 5 years. Even though there are plenty of reasons why they don’t succeed, in many instances it relates directly to finances.

As money is required to operate, entrepreneurs must not only learn how to generate profits but manage those profits accordingly. Accounting and bookkeeping, for this reason, are of the utmost importance to a company’s lifespan.

Why DIY Accounting Isn’t Always Efficient Enough

It is not uncommon for an entrepreneur to take on accounting and bookkeeping responsibilities in the first few years of their establishment. Ultimately trying to save money on the cost of hiring an accountant, they delve into the company finances with only basic knowledge (in most instances), of how it should be managed. Though there is a lot of reading material out there on how to do your own accounting and several online platforms you can use to make it easier, in many cases, it isn’t efficient enough. Here’s why:

Lack of Skill

While many business professionals have some basic education in accounting and may even be great with managing their personal finances, business accounting and bookkeeping is a lot more involved. The lack of skill or comprehension essentially leaves too much room for error.

Time-Consuming

The learning curve for accounting and bookkeeping can be taxing. There is a wealth of information that must be remembered including formulas, processes, records, as well as local and federal laws that must be adhered to. As accounting isn’t their only concern to grow the business, many other areas tend to fall by the wayside.

Waste of Money

Contrary to popular belief, it is a lot more affordable to outsource your accounting to a company who specializes in online bookkeeping services, than it is to continue doing it yourself. Consider your hourly rate of pay. Now multiply that amount by the hours you spend working on the books? This is money being flushed down the drain. Not to mention, when errors are made or financial opportunities are overlooked, this too can cost a lot.

Happy accountant

Finding an Accountant That’s Right for You

As you have learned, the first five years of starting your business are crucial. Without full knowledge of how to effectively manage the finances, you stand to waste a lot of time and money. Though hiring a full-time accountant may be out of the picture for awhile, there are service providers who you can outsource to. Here’s some advice on hiring the right one.

Ask Around

Referrals are always the best place to start when looking for an accountant. Ask other entrepreneurs you may know who they’re currently using.

Check Credentials

It doesn’t make sense to hire someone to do your accounting and bookkeeping tasks if they’re no more skilled than you are on the subject-matter. Be sure to check that the candidate you’re looking at has the proper educational background and licenses.

Experience

Experience is often the best teacher which is why you want to look for a financial professional who has had several years of experience working in small business accounting.

Services

The more you can get help with the better, so look for a service provider that offers an array of online accounting services to help your business stay in line. This can include bookkeeping, tax services, payroll, and more.

Ideas/Goals

You want to hire a forward-thinking firm or contractor to complete your accounting for you. When talking with professionals ask what ideas they might have to improve your current accounting system and what goals they might set to help your business expand.

Conclusion

Trying to do everything yourself may seem like the only thing you can do when funds are limited. While it may work in some areas of business, when it comes to accounting and bookkeeping, the very lifeline of your company’s success, it is best not to take risks. Outsourcing these efforts to the right service provider will save you money and help you beat the odds in your first year and beyond.

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3 Key Ways Your Small Business Can Save

Keeping down costs as much as possible without sacrificing quality is critical to any small business if it’s going to stay competitive, maintain a high customer satisfaction rate, and ultimately grow into a medium or even large-sized business somewhere down the road.

Many small businesses these days can be run by only one or a few people, at least in their “infant stage,” and sometimes can even be run entirely from a home office with no physical business property.

But no matter how minimalistic your business may be, there are three areas you probably can’t do without: a quality business phone system, a good website hosting service, and fast, affordable shipping. Learn to shave down expenses in each of these three key areas, and it adds up fast and bolsters your bottom line. Here’s how.

1. A “Virtual” Business Phone System

Poor customer service is the number one reason for customer loss, and the high turnover rates typical with most businesses present a great opportunity: create high customer retention rates and almost all of your new “converts” are “real” growth.

Having a professional aura to your phone system is a big part of maintaining high customer service standards. But business phone systems, both hardware and software, can be very expensive for small businesses. How shall we solve this dilemma?

Virtual business phone system

UniTel Voice allows you to transform your cell phone(s) into a virtual business phone system that sounds and feels truly professional to your contacts. You get toll free, local, and vanity numbers; professional greetings with department and/or employee extensions; voicemail and faxing; multiple numbers per phone or multiple phones per number; and more. It all adds up to complete mobility, incredible versatility, and unexpected affordability.

2. Affordable Website Hosting

Everyone has to have an online presence these days to make it in the business world, at least, in most industries. But how can you find affordable Web hosting that still meets all of your needs?

The link above will introduce you to some answers to the question of how to have a great website and hosting service at a price penny-pinched small businesses can afford. Unless your Web pages are delivered with reasonable speed, you’ll lose customers.

And you may also need email marketing, a blog, ecommerce capability, file sharing, online chat or other customer support, and more to keep your site visitors happy enough to return. Plus, you need 24/7 support to ensure you can keep your site up and running and correct any problems quickly. All of this can be done with customized Web hosting that’s trim enough to be inexpensive but big enough where it counts to get the job done.

3. Mail Delivery

Almost all small businesses will send at least some products through the mail to customers, and finding the most cost-effective mail delivery options in each instance adds up savings fast.

While there are other options out there, the three main senders are USPS, FedEX, and UPS. US Postal delivery is usually the cheapest for smaller packages, but check out the rates in the link above to see how heavier packages are often better priced and faster delivered with UPS or FedEx. And anything over 70 pounds will have to be delivered by some entity other than the US postal system.

Finally, there are also postal delivery and warehousing outsourcing partners out there that can greatly simplify your customer delivery at very competitive price points.

Trim down overhead on postal delivery, Web hosting services, and business phone systems while still maintaining high standards customers approve of, and you’ll save big on your bottom line.

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Small Business Taxes and Financial Regulations: Understanding Administrative

If you’re working inside the framework of a small business, there are a lot of details that you have to understand as you move forward. And two significant categories that surround lots of these details include taxes and financial regulations. The information surrounding these topics isn’t necessarily complicated, but it is specific and integral.

Consider for a moment the knowledge that you’ll have to have of registering a business, representing your company concerning taxes, knowing how to purchase insurance or other processes to help with liability, and what to do in case of bankruptcy. All of those areas of concern are important to someone working to make a new, small business better.

Registering a Business

The first step in a lot of professional projects is going to be registering your business. Depending on who is funding it, how many employees you have or want to have, and how your taxes are going to work, there are many different initial options that you need to go over. Preferably, you’ll talk to someone who’s been through the process before and find out if they had any issues, and then avoid the problems they had while taking the good advice they got from the experience.

Representation Concerning Taxes

Knowledge of taxes will make or break many small businesses. Understanding of how to represent yourself against the IRS in the event of an audit is absolutely key as well. You want to make sure that your record-keeping is immaculate, and that way if there is an issue with taxes in the future, everything is easily referenced and available within an archive. If you don’t figure out how to handle your taxes within the first few years of establishing your business, that can lead to serious financial consequences later.

Insurance and Liability

As a business, you have certain liabilities in different areas. That’s where having different types of business insurance comes into play. As an example, if you or your business has anything to do with health and safety, having a wide range of medical insurance associated with your company is going to be necessary. Other business insurance might be to protect your personal finances in the event of a lawsuit.

Bankruptcy Proceedings

And finally, it’s an unfortunate fact that most small businesses don’t succeed. Many of them that can’t eventually sustain and make money end up going bankrupt. So even before you start forming the idea of a small business, make sure you understand how bankruptcy proceedings work. It’s not the end of the world for a smart business owner, but it can be a huge problem if your company loses too much money and you don’t know how to handle the fallout, especially when it comes to creditors and taxes.

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Former South Korean president Lee appears for questioning over graft charges

Jun Ying, a former Equifax employee who was at one point next in line to be the company’s global chief information officer, has been charged with insider trading by the US Securities and Exchange Commission.

The SEC alleges Ying, 42, possessed confidential information about Equifax’s massive data breach in September 2017 before he exercised all of his vested Equifax stock options and then sold the shares, making roughly $1 million. Offloading the stock helped Ying avoid more than $117,000 in losses, according to the complaint.

“As alleged in our complaint, Ying used confidential information to conclude that his company had suffered a massive data breach, and he dumped his stock before the news went public,” Richard R. Best, director of the SEC’s Atlanta regional office, said in a press release. “Corporate insiders who learn inside information, including information about material cyber intrusions, cannot betray shareholders for their own financial benefit.”

The charges against Ying is just the latest development in the Equifax data breach saga, which ramped up in early September after the credit reporting agency said the personal details of more than 145 million US consumers were potentially accessed by hackers between mid-May and July 2017.

Ying was not one of the top company officials who were reported to be under investigation in the weeks following the breach’s announcement. That inquiry stemmed from SEC filings that showed three senior executives dumped almost $2 million worth of stock days after the company learned of the breach.

Equifax’s stock price was down 0.5% as of 11 a.m. Eastern time on Wednesday.

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