FIVE BASIC TAX TIPS FOR NEW BUSINESSES

business-owner-stockxpertcom_id17260461_jpg_9d244c0f32209ba041e058fccd912e101If you start a business, one key to success is to know about your Federal tax obligations. You may need to know not only about income taxes but also about payroll taxes. Here are five basic tax tips that can help get your business off to a good start.

1. Business Structure.  As you start out, you’ll need to choose the structure of your business. Some common types include sole proprietorship, partnership and corporation. You may also choose to be an S corporation or Limited Liability Company (LLC). You’ll report your business activity using the IRS forms which are right for your business type.

2. Business Taxes.  There are four general types of business taxes. They are income tax, self-employment tax, employment tax and excise tax. The type of taxes your business pays usually depends on which type of business you choose to set up. You may need to pay your taxes by making estimated tax payments.

3. Employer Identification Number.  You may need to get an EIN for federal tax purposes. Search “do you need an EIN” on IRS.gov to find out if you need this number. If you do need one, you can apply for it online.

4. Accounting Method.  An accounting method is a set of rules that determine when to report income and expenses. Your business must use a consistent method. The two that are most common are the cash method and the accrual method. Under the cash method, you normally report income in the year that you receive it and deduct expenses in the year that you pay them. Under the accrual method, you generally report income in the year that you earn it and deduct expenses in the year that you incur them. This is true even if you receive the income or pay the expenses in a future year.

5. Employee Health Care.  The Small Business Health Care Tax Credit helps small businesses and tax-exempt organizations pay for health care coverage they offer their employees. A small employer is eligible for the credit if it has fewer than 25 employees who work full-time, or a combination of full-time and part-time. Beginning in 2014, the maximum credit is 50 percent of premiums paid for small business employers and 35 percent of premiums paid for small tax-exempt employers, such as charities.

For 2015 and after, employers employing at least a certain number of employees (generally 50 full-time employees or a combination of full-time and part-time employees that is equivalent to 50 full-time employees) will be subject to the Employer Shared Responsibility provision.

If you would like to start a new business or have questions about starting up a new business, please call our office today. We specialize in helping people just like you who want to enjoy the freedom and flexibility of owning their own businesses.

Source: IRS Summertime Tax Tip 2014-09

GOOGLE LAUNCHES NEW ‘GOOGLE MY BUSINESS’

googlemybusinessGoogle has launched a new portal, Google My Business, designed to simplify and demystify Google visibility for small businesses. Google My Business provides a central hub for small, local businesses to manage their presence on Google Search, Google Maps and Google+ from a single dashboard.

Getting on Google is Simpler than Ever

Before Google My Business, small-business owners and marketers had to update their business information on each of these services separately, a confusing process for business owners already crunched for time. “We see our customers struggle with this all the time,” says Kevin Gibson, Marketing Technologist at Utah printing and marketing agency AlphaGraphics Bountiful.

“Either they have multiple listings and can’t combine them, or they have a listing but can’t get access to change it, or they have no listing and go deer in the headlights as soon as you start talking about it,” Gibson explains. “Anytime Google can consolidate tools and make it easier for regular business owners to use, it is a good thing.”

Manage Multiple Google Services Simultaneously

With Google My Business, you can now update your business information, such as hours of operation and physical location information, across Google Search, Google Maps, and Google+ at the same time. You can also implement and manage an AdWords Express campaign (a simplified version of Google’s pay-per-click advertising program), monitor audience engagement with your content on Google+, track website analytics, respond to customer reviews, and even launch a Google+ Hangout.

Because it’s simpler to manage, Google hopes that more businesses will take advantage of features like Google+ to engage with potential customers, encourage customers to write reviews, and monitor performance with Google Analytics data and Insights for Google+ posts and pages. If you already use Google Places or Google+ Pages, Google will automatically upgrade you to Google My Business. There’s no charge to use Google My Business, although the typical pay-per-click (PPC) advertising costs apply to the AdWords Express program.

Experts Agree It’s a Good Thing

Digital marketing experts say the change is positive for Google, small businesses, and the SEO agencies that serve them. “When you understand the power of both SEO and PPC mixed together within the Google portal, you can dominate your niche that you’re in and blow away even the big guys that have huge ad agencies,” says Andrew Anderson of Strategic Web Blueprint. “In our opinion, it is actually a great equalizer for small businesses.”

Gibson also sees Google My Business as a win-win. “Consolidating the tools and making it easy for small-business owners to get involved will ultimately lead to more business for SEO providers, when [small businesses] get to some of the more technical parts of PPC campaigns they don’t understand,” he explains. The benefit for Google is, of course, more paid advertising business, while small businesses gain visibility and connect with more potential customers.

Using Google My Business

If you don’t already use Google+ Pages or Google Places, you can set up your own profile by visiting Google My Business and selecting “Get on Google.” Google will then walk you through the steps, ranging from locating or adding a local business address on Google Maps, to creating a Google+ page, and more.

Taking advantage of the tools Google My Business offers helps small businesses connect with their customers. That means your business is more likely to show up in the search results when Google users search for keywords related to your business. The more effort you put into nurturing your Google presence, the better your odds of raising your visibility with your target audience.

Written By: Angela Stringfellow
Read more: http://blog.intuit.com/local/google-launches-google-my-business-a-central-dashboard-for-small-business/#ixzz38CU9FWgM

TWO IMPORTANT LIQUIDITY RATIOS TO KNOW FOR YOUR BUSINESS

currentratioDo you know what the current ratio is for your business?  How about the quick ratio?  These two ratios are considered important liquidity ratios, or ratios that will give you an idea of how well you can meet your debt obligations. These two ratios are critical because if your business does not have liquidity, then it won’t be able to pay its liabilities. Also, the business may not be able to handle an unexpected expense.

The Current Ratio is the total of current assets that your business owns (ex.-cash and cash equivalents, accounts receivable, inventory, etc.) divided by current liabilities (ex.-accounts payable, taxes payroll, debt obligations due within the year, etc.). This ratio shows whether the assets that you own can be converted into cash within a year in order to pay off your liabilities that are due within a year. A ratio of less than one means that you could run short of cash within the year unless additional revenue is brought into the business.

The Quick Ratio is similar to the current ratio; however, inventory isn’t included in the calculation. The quick ratio is expressed as cash and cash equivalents plus accounts receivable divided by current liabilities. Inventory isn’t include because it may be difficult to turn over the inventory within a year.

Both of these ratios should be analyzed together to help you calculate how well your business can meet is debt obligations.

SHOULD YOU BUY A NEW TOP-LEVEL DOMAIN NAME FOR YOUR BUSINESS?

domainNow it’s easier than ever before to buy a branded URL for your business. With the Internet Corporation for Assigned Names and Numbers’ rollout of more than 1,400 themed domain extensions over the course of the year, you can now buy the website address of your choice with a .bike, .coffee, or .lawyer top-level domain, to name just a few of the options.

If the .com website address of your choice isn’t available, a themed domain extension may seem like an attractive option — but is it worth building your online brand around it? Consider the following points.

.Com Domains Still Dominate

There are more than 100 million registered .com domains, according to statistics from VeriSign, which far exceeds the use of any other domain extension. On a practical level, that means most people will default to including “.com” when typing in your URL unless you make a major branding effort to get customers to remember your custom domain.

What if You Can’t Find a .Com Domain That Suits Your Brand?

Domain names ending in .com are generally preferable, but what if your top choice — or even your tenth choice — isn’t available? That’s a common occurrence for small-business owners. In a study conducted by  Wakefield Research, 55 percent of respondents surveyed said they believe  they have lost business because of their domain names. If a suitable .com URL isn’t available, it may make sense to move to a themed top-level domain. For instance, if you own a business called Sunrise Coffee and can’t purchase sunrisecoffee.com or any suitable variants, consider purchasing sunrise.coffee instead.

You May Need to Buy More Than One Domain Name

Many businesses strive to protect their brand by purchasing numerous relevant domain names. But with the new business-themed domains, this can get quite expensive. If you own a chain of coffee shops, for instance, you may want to purchase a .com, a .biz, and now, even a .coffee domain name. ICANN has launched a trademark clearinghouse that allows brands to protect their trademarked names, with trademark registration available for between $95 and $150 per year. Keep in mind that this service sends a warning to those who purchase trademarked domain names, but it does not actually prevent anyone from buying them. To fully protect your brand, you’ll need to actually purchase the relevant domain names.

If you want to check on the costs and availability of brand-related domain names, a service like GoDaddy can help at no charge. If you haven’t even decided on a business name yet, try Panabee, which can help you come up with potential choices for a business name.

Written by Kathryn Hawkins, Intuit Small Business Blog, 7/17/2014

Read more: http://blog.intuit.com/marketing/should-you-buy-a-new-top-level-domain-name-for-your-business/#ixzz37jEVj1oR

GETTING AROUND IN THE NEW QUICKBOOKS ONLINE VERSION

Here are four quick tips on finding your way around the new QuickBooks.

 1. Click Create (+) at the top of the page to enter pretty much any transaction — including invoices, sales receipts, expenses, and bank deposits. Click the “Show more” link to see the full list.

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2. The settings gear in the upper right corner includes Reconcile, Chart of Accounts, Recurring Transactions, and Products and Services, as well as your QuickBooks subscription details.

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3. The navigation bar on the left side of the page is your gateway to all features — including your income list under Transactions > Sales.

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4. The gear icon above a table lets you customize how the table looks.

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QUICKBOOKS REPORTS THAT YOUR BUSINESS SHOULD RUN REGULARLY

qbgraphYou send invoices because you sold products and/or services. Purchase orders go out when you’re running low on inventory, and there are always bills to pay, it seems like. All of this activity is, of course, important in itself, but all of your conscientious bookkeeping culminates in what’s probably the most critical element of QuickBooks: your reports.

Reports can tell you how many navy blue sweatshirts you sold in March, what you paid for health insurance premiums in the first quarter, and how much you bought from your favorite vendor last month. They’re very good at drilling down to get the precise set of numbers you need.

But carefully customized and properly analyzed reports can do more than tell you how many golf clubs to order and when it’s time to switch phone services. They can help you make the business decisions that will help you take your growing company to the next level. There are several that you should be looking at regularly, some of which you can interpret easily and use in your daily workflow. We’ll help you with the interpretation of the more complex financial reports.

Who Owes Money?

That’s probably a question you ask yourself every day. You don’t necessarily have to run the A/R Aging Detail report every day, but you’ll want to run it frequently. It tells you who owes you money and whether they’ve missed the due date (and by how many days).


Figure 1: By running the A/R Aging Detail report, you can see whether you need to follow up with customers who have past due invoices. 

As with any report, you can modify it to include the columns, data set and date range you want by clicking the Customizebutton. When you create a report in a format that you think you might want to run again, click the Memorize button. Enter a name that you’ll remember, and assign it to a Memorized Report Group.

Getting There

There are two ways to find the reports you want to see. You can open the Reports menu and move your cursor down to the category you want, like Customers & Receivables, which will open a slide-out menu of options there.

Or you can open the Report Center, which lets you explore reports in more depth. Each is represented by a small graphic with four icons under it. You can:

  • Run the report with your own data in it
  • Open a small informational window
  • Designate it as a Favorite, and
  • View QuickBooks help.


Figure 2: If you access QuickBooks reports through the Report Center, you’ll have several related options. 

Other accounts receivable reports that you should consult periodically include Open Invoices and Average Days to Pay.

Tracking What You Owe

Reports can also keep you up-to-date on money that you owe to other people and companies. An important one is Unpaid Bills Detail, accessible through the Vendors & Payables menu item. Though you can modify its columns, this report basically tells you who is expecting money from you, the date the bill was issued and its due date, any number assigned to it, the balance due, and relevant aging information.

Vendor Balance Detail is critical, too. This report displays every transaction (invoices, payments, etc.) that contribute to the balance you have with each vendor.

Standard Financial Reports


Figure 3: We hope you’ll let us help you by running and interpreting these standard financial reports. 

QuickBooks report categories include one labeled Company & Financial. These are reports that you can run yourself, but they’re critical for understanding your company’s financial status. We can customize and analyze these for you on a regular basis so you’ll know where you stand. They include:

  • Balance Sheet. What is the value of your company? The balance sheet breaks out this information by account (under the umbrella of assets, liabilities and equity).
  • Income Statement. Often referred to as Profit & Loss, this shows you how much money your business made or lost over a specific time period.
  • Statement of Cash Flows. How much money came in and went out during a specified time range?

Reports can only generate information about what you’ve entered in QuickBooks and exactly where it’s been entered. So it’s crucial that you follow standard accounting practice as you proceed through your daily workflow. As a CPA and Advanced QuickBooks ProAdvisor, I’m available to answer questions that you have about entering your information in QuickBooks and getting the reports that you need to make wise financial decisions. The future success of your business depends upon it.

IRS MAKES IT EASIER TO FILE APPLICATION FOR A NON-PROFIT ORGANIZATION

nonprofitorganizationsOn Tuesday, July 1, 2014, the Internal Revenue Service introduced a new, shorter application form to help small charities apply for 501(c)(3) tax-exempt status more easily.

“This is a common-sense approach that will help reduce lengthy processing delays for small tax-exempt groups and ultimately larger organizations as well,” said IRS Commissioner John Koskinen. “The change cuts paperwork for these charitable groups and speeds application processing so they can focus on their important work.”

The new Form 1023-EZ, available on IRS.gov, is three pages long, compared with the standard 26-page Form 1023. Most small organizations, including as many as 70 percent of all applicants, qualify to use the new streamlined form. Most organizations with gross receipts of $50,000 or less and assets of $250,000 or less are eligible.

“Previously, all of these groups went through the same lengthy application process — regardless of size,” Koskinen said. “It didn’t matter if you were a small soccer or gardening club or a major research organization. This process created needlessly long delays for groups, which didn’t help the groups, the taxpaying public or the IRS.”

The change will allow the IRS to speed the approval process for smaller groups and free up resources to review applications from larger, more complex organizations while reducing the application backlog. Currently, the IRS has more than 60,000 501(c)(3) applications in its backlog, with many of them pending for nine months.

Following feedback this spring from the tax community and those working with charitable groups, the IRS refined the 1023-EZ proposal for today’s announcement, including revising the $50,000 gross receipts threshold down from an earlier figure of $200,000.

“We believe that many small organizations will be able to complete this form without creating major compliance risks,” Koskinen said. “Rather than using large amounts of IRS resources up front reviewing complex applications during a lengthy process, we believe the streamlined form will allow us to devote more compliance activity on the back end to ensure groups are actually doing the charitable work they apply to do.”

The new EZ form must be filed online. The instructions include an eligibility checklist that organizations must complete before filing the form.

The Form 1023-EZ must be filed using pay.gov, and a $400 user fee is due at the time the form is submitted. Further details on the new Form 1023-EZ application process can be found in Revenue Procedure 2014-40, posted today on IRS.gov.

There are more than a million 501(c)(3) organizations recognized by the IRS.