Skip to main content

Posts

Showing posts from 2015

Year End Tax Moves to Reduce Business Profits

Here are some tax planning strategies to help you reduce profits for the year and thus reduce the taxes you will pay you. (Keep in mind if you want to accelerate profit into this year do the opposite of the strategies listed below)

Delay Revenue If your business is an accrual basis tax reporting business delay sending out invoices until next year. For a cash basis tax reporting business delay receipt of income. You may need to call people you have already invoiced to request that they make sure you don't receive their payment before the year end. In reality they can send you a payment before year end and you could receive it after year end so this could benefit both you and your clients/customers.

Accelerate Expenses On the Expense side for an accrual basis tax reporting business make sure you enter all the bills you receive before year-end and make sure they are dated this year. For a cash basis tax reporting business pay as many bills by year-end as possible. If cash is tight m…

Why January 15th Is An Important Date for Your U.S. Taxes

Nobody likes to pay taxes and penalties on taxes are even worse. On your personal form 1040 for your U.S. Taxes you must not only pay enough tax but you must also pay it in a timely manner or pay a penalty. The date you must pay enough tax in to the IRS to avoid an underpayment penalty is typically January 15th. Below is a quote from IRS publication 505 on the subject:

If you did not pay enough tax, either through withholding or by making timely estimated tax payments, you will have underpaid your estimated tax and may have to pay a penalty.


So what is the rule for the Underpayment Penalty (not to be confused with the Late Payment Penalty :~/  ) Below is the General Rule from IRS publication 505 for 2014 taxes:
General Rule
In general, you may owe a penalty for 2014 if the total of your withholding and timely estimated tax payments did not equal at least the smaller of: 90% of your 2014 tax, or 100% of your 2013 tax. (Your 2013 tax return must cover a 12-month period.) Did you catch it. The…

Make It About Them

Successful people do what others won't do. Often that means doing what you really don't want to do. If it was easy, everyone would be a success.

Doing what others won't or don't do is really simple to get business and establish your brand. So forget everything (well most everything, except Dale Carnegie's stuff) you have been taught to do and consider this experience.

The best phone solicitation ever:

Hey Jeff, How is it going?
Me: Ah OK.
Just OK. No seriously, I know a guy like you is more than OK.
Me: Who is this?

The point; if you lead with I want to sell you something then you are dead in the water (hung up on, end of conversation). That is a horrible way to position yourself to begin a conversation and it is just unfriendly. Instead, get to a position of strength and friendliness by finding something out about the person. Be someone that others want to talk to. Dale Carnegie taught that you want to start by talking about something the other person is interest…

My Books are a Mess: Business Owners and Quickbooks

Successful People Do What Others Won't Do. Often that means doing what they don't really want to do. If it was easy, everyone would be a success.


Why are my books a mess?  Why do I have a bunch of transactions in Unapplied Cash accounts?  It is common for small business owners to struggle using QuickBooks and have some undesirable results.  To really succeed in business you need to get a handle on this.  How and why does this happen and what is the fix.

Why Does This Happen
In this situation the problem is not what it appears.  The problems starts with a focus on entering transactions and neglecting to look at the end product.  Many business owners check the bank register but don't regularly look at their Profit and Loss Statement and even more seldom is a review of the Balance Sheet.  What happens is QuickBooks is being used to track activity in bank accounts and manage invoices and payables and maybe payroll but it ends there.

Failing to look at the end products, the Prof…

Why Can't I Deduct Those Losses: The Double or Quadruple Whammy of Your Losses in the Stock Market

Another Black Monday.  What do you need to know about stock market losses related to your taxes.
Limited Reduction of Income on Your Tax Return for This Year
The smoke is rising from his ears and he wants to know why he can't use his stock market losses to offset his income on his income tax return.  Yeah, it is a bad deal.  To add to salt to a festering wound you are limited to taking capital losses, like losses on your stock trades, up to a net of $3,000.  So net means you can use actual losses to offset any actual gains you had on trades this year plus up to $3,000 of losses.  When you have lost over $3,000 of value that is not enough.  


What about the rest of those actual losses?  You can carry those forward and use them in future years.  But remember those are only the actual losses.  


Actual Losses Only
Actual losses are losses from positions you have closed out of.  In other words losses from stock that you have sold.  If you still hold the stock, now a loss position but an acti…

The Sexy Way To Wealth

One of the best stories about wealth is from a high-flying friend back in the day and about his not so high-flying but wealthy dad.  My friend would make over a million dollars in a few years but had nothing to show for it.  However, the real story is the one he told me about his dad, who is a millionaire who never made over $50,000 a year.  His newly retired dad and his wife raised a few kids sent them to college and along the way accumulated over a million dollars in accessible funds.  How?

His dad followed a tried a true formula.  He saved money out of every paycheck and also put money into his retirement accounts.  Stop me if you've heard this before, but it does work and it is actually very powerful not only financially but personally.

Anything Worth Doing Is Difficult
In reality this strategy is difficult but so is anything worth doing.  The main deterrent is in the mind.  When you are young you want things and you want them now.  The problem is in waiting. What do you want…

Use Business Metrics and Analytics To Reach Higher Levels of Success In Your Business

Metrics and Analytics
Do you like the insight that statistics provide for investments,  the economy, or sports?  Yes, likely you use and may even be excited about many statistics, or the new buzz words metrics and analytics, and what you learn from them.  They also empower you to evaluate investments, sports teams or players as well as your business and understand why you have certain results. You should also be excited to use metrics and analytics in your business to help you evaluate, analyse and develop strategy for your business to reach higher levels of success.

Business metrics and analytics empower you to understand, to compare, and to analyse your business and it's parts and communicate this intelligence with your key personnel.  Much the same way investors have learned to use metrics and analytics to analyse businesses and other investments to identify opportunities and undervalued assets or sports general managers use them to evaluate players, their team, other teams an…

Guard Against Employee Theft: The Fake Employee Trick

The Fake Employee Trick
Watch out for the fake employee trick.  Business owners know that embezzlement and theft are growing problems in the business world.  Here is an example of a method used to steal from you. A manager hires someone they know and puts them on the payroll but the person does not actually do any work for you.  This could be a friend or family member and it could easily be costing you money over a period of years.

How to catch the fake employee trick
So how can you catch this trick and more importantly how can you create an environment that discourages this and other deceptive practices.  To catch this trick and others make sure you as the owner check all the bank and credit card statements personally.  Check for unauthorized payments and make sure you are familiar with all the vendors and employees that are getting paid.

Second, talk to hiring managers about the employees they hire.  Do a regular review with them asking who their employees are and what they do.  …

How To Schedule Success?

You have heard you need to plan to succeed or you are planning to fail.  You also know that "someday" is code for never.  Like when someone says "hey, let's do lunch someday" it is really code for "it will never happen".  To make it happen you have to schedule it.  It is the same with success, since someday is just code for never, you have to actually schedule it.  How do you schedule success?

The world is setup and programmed for people to be too busy.  People actually like to say "I'm too busy" whether they are or not and some actually like to be too busy.  Are you too busy to succeed?  Take a look at what is really important and make sure you are not "too busy" for those things. The first step is free yourself of the limiting thinking that I am too busy.  Just stop that noise from going through your thought process.  Stop saying it and stop scheduling it or planning to be "too busy".  You can create a life where y…