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Getting Your Head in the Clouds
February 3, 2012
It can be a Catch-22 on whether economic, technological and management trends are good for small business or not. They certainly require an investment in time and money to keep abreast of the never-ending developments. However, to ignore them is to provide your competitors with the opportunity to grow their businesses at your expense.
If there is one technological trend that should command your attention for its ability to help you to respond to your business environment it is cloud computing.
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Arizona Use Tax Reporting - Ready?
January 29, 2012
This is the first year individuals will be asked to pay “use tax” on qualifying goods you purchased out of state on your income tax return. The tax has been around for nearly 50 years. You’ll need to complete a short worksheet to list the qualifying amount of use-tax items that were purchased during the year. The tax applies to items you purchased without paying sales tax (Arizona’s state rate is 6.6%) that were consumed in the state. Here are the details
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3 Critical Success Factors For Improving Profits
January 17, 2012 You've likely heard it said that “what you measure you can manage” and “what gets managed gets done”. When it comes to achieving greater profitability, truer words can't be found. So, what the heck does that really mean and how do you get started? We often talk to Arizona Business owners about the importance of focusing on 4 Profit Improvement Strategies or The 4 Ways To Grow Your Business. Simply, they are:
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Are You Driving Your Business Or Is It Driving You?
January 10, 2012 The New Year is always a good time for reflection. It's often a time when we look back and wonder where the time went. The question that often comes to the mind of Arizona business owners centers on what has really been accomplished over the year. We often say that a business is nothing more than a vehicle to get us to our destination and that destination is a personal one. Chances are that when you first set yourself up in business you did it with a personal goal in mind. That goal may have been about spending more time with the family or having a higher level of disposable income or even more independence.
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It's Tax Time! Top Tips to Get Ready.
January 3, 2012 If you’re like most taxpayers, you find yourself with an ominous stack of “homework” around TAX TIME! Unfortunately, the job of pulling together the records for your tax appointment is never easy, but the effort usually pays off when it comes to the extra tax money you save! When you arrive at your appointment fully prepared, you’ll have more time to:
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What's Your Pricing Strategy?
December 19, 2011 For many small and mid-sized Arizona businesses pricing products and services is more a matter of guesswork than logic. Mindful of competitor pricing, they make the mistake of simply undercutting to win business rather than carefully working out the price they need to charge – a price that not only covers the cost of doing business, but makes all the hard work worthwhile by returning a reasonable profit.
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5 Ways to Improve Your Cash Flow
December 3, 2011 Most businesses function in a give and take fashion - while you may be providing a service, you are most likely always paying someone else to supply a service to you, and so on. This chain of supply and demand means that you understand the need to pay on time, and therefore, in theory should be given the same courtesy by your suppliers. Unfortunately, getting paid on time, every time, is a rare luxury, but with a few simple strategies you can attempt to make it a more regular occurrence.
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It’s Time for Year-End Tax Planning
November 11, 2011 We have compiled a checklist of actions based on current tax rules that may help you save tax dollars if you act before year-end. Regardless of what Congress does late this year or early next, solid tax savings can be realized by taking advantage of tax breaks that are on the books for 2011. For individuals, these include:
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Don’t Try to Be Everything to Everyone
November 22, 2011 In order to thrive it is not enough to survive but grow. But a growth strategy doesn't necessarily have to be a high risk strategy. Too many business owners embark on an unnecessarily dangerous journey by trying to be everything to everyone. A highly esteemed business professor at Harvard by the name of Michael Porter expressed the view that there are only two ways a business can gain a competitive advantage.
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Advice on Firing Staff
August 29, 2011 The process of letting an employee go is uncomfortable and upsetting. However there are a few guidelines that can help soften the blow called the five Ws - who, what, when, where and why: Start with who - think about the employee and what you know about them. Be sure to empathise with their personality: this helps you to feel secure, as well as putting your employee at ease and making them feel less like a disposable entity.
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Handing Over the Family Business
July 20, 2011
According to the Small Business Administration in the USA, only a third of family-run businesses make it to the second generation. What are the strategies to ensuring your business is one of those that survive? The key is succession planning.
Succession planning can limit dissemination and downfall, and can be a simple step-by-step process that will ensure future success. It requires a long term approach: investing in mentorship and leadership can reap benefits as many as 20 years down the line.
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Get Your Team Out of the Office!
May 18, 2011
Your bookkeeper calls in one morning to say her daughter is sick and cannot go to school. She will have to stay home and look after her.
In some firms, that would mean writing off the productivity of that employee for the day with possible knock-on effects for meetings, projects or appointments. What if the employee could still contribute at least half a day to get crucial work completed? Or they might want to avoid using up a day of leave?
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Key Skills for Entrepreneurs
March 23, 2011 The desire to start your own company can have several motivations. A desire to make money or to change the world, the urge to be in control of your employment, or the ambition to test out a great idea. Unfortunately, becoming an entrepreneur takes more than a single good idea. Motivational speakers come up with favorite lists of essential qualities of successful entrepreneurs but within those there are some basic requirements.
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Why You Need a Business Bank Account
February 19, 2011 Whether you are working on your business part-time, operating as a sole proprietor, or starting a business with a more formal structure (such as a partnership or corporation) – it’s vital that you keep your business banking separate from your personal finances. Keeping the two separate not only provides your business with credibility, it reduces your personal liability (a must if you are incorporating your business as a distinct and separate legal entity under its own name) and helps you to manage your taxes, bills, and other payments.
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Putting Together a Pricing Strategy
January 28, 2011
For many small businesses pricing products and services is more a matter of guesswork than logic. Mindful of competitor pricing, they make the mistake of simply undercutting to win business rather than carefully working out the price they need to charge – a price that not only covers the cost of doing business, but makes all the hard work worthwhile by returning a reasonable profit.
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Time To Let Others Know How Good You Are
January 14, 2011
Advertising to your target market the products or services you sell is a great way to inform potential clients of what you have to offer. But every claim made in your advertisement is coloured by the knowledge that you are spruiking products for financial gain. Accordingly, a potential client will keep in the front of their mind that the promised relationship is between a seller and a buyer. As the famous saying goes, caveat emptor - “buyer beware”. You can’t trust everything that you read in advertising. However, every firm is sitting on a highly valuable asset which, if used properly, has the potential to dramatically increase the number of new clients. That’s right - a list of satisfied clients. THE SECRET BEHIND STAR RATINGS Potential clients like to read about satisfied clients because it is seen as an independent verification of the claims made in an ad. When you read how much someone has been satisfied by a spending decision, it raises confidence that the decision is a good one for other people too. And instead of a conversation between a seller and a buyer, you now have a buyer talking to a potential buyer about the positive experience they enjoyed with your firm. The power of recommendations is evident in the way e-commerce sites place user reviews or star ratings right at the top of the page next to the ‘buy’ button. Potential clients believe in safety in numbers, and if 40 out of 50 people have given a product five stars they will feel reassured that buying that product is highly likely to be a wise decision. COLLECTING FEEDBACK Satisfied clients are a fantastic resource because you already know who they are - it’s information you freely own. There’s nothing stopping you from emailing your best clients tomorrow for their opinions, although you might get a better response if you request feedback personally. Always ask their permission first before you include a testimonial; some clients might not consent to their name being used in a marketing campaign. The first step is often the hardest. Collecting client satisfaction ratings can be a revealing and not always positive experience. Some clients might love the product but have reservations about the timeliness in delivery, the quality of your website or the attitude of your sales team. Recommendations consist of two elements - the message itself and the identity of the referrer. Both are important. It’s often interesting to look at the ‘puffs’ on the back of a book jacket; sometimes the bigger ‘names’ are quoted first, even if their recommendations aren’t as glowing. Once you have a selection of short, snappy quotes from reputable clients, add them to any location a client might see them. That might mean your website, business card, newsletter, in-store marketing, pamphlets, corporate t-shirts. Good news deserves to be shared.
The Solution To Healthier Sales.....
January 4, 2011 - Happy New Year!! Good times always feel like they will last forever. However, there will come a time when clients might be harder to find. The global financial crisis and its consequences showed that when an economy sours, firms without robust processes tend to flounder. Falling sales is a typical sign.
Firms can reduce the effect of external conditions by working out where future sales will come from and how to win them. This process is called building a sales pipeline because it lets you track a potential client from the first point of contact through to a completed sale and beyond.
A properly developed sales pipeline will define how many sales you aim to close in a month, quarter or year. Looking back at your track record you can then make forecasts about the number of sales and the following revenue and profit you will generate. In other words, it helps you measure firm performance.
A sales pipeline will reveal interesting facts about the skills of your sales team. A salesperson might be great at finding new customers but terrible at closing the sale; another might take twice as long to close as his or her colleagues. Salespeople can undergo training to help them improve problem areas or you could hire someone with complementary skills to your existing team.
A pipeline can also enforce discipline in the sales process and find more sales from existing clients, which is often easier than acquiring new ones. Analysing the reasons for losing a sale can help you understand which questions will lead to a win.
Studying sales as they progress through a pipeline will show that not all sales are equal. Larger deals usually take more effort to win than smaller ones, and knowing the cost of making a sale is important in finding out how much profit you made in each sale.
The more information your sales pipeline delivers, the more tightly you can focus on chasing the most profitable sales. Then you can hand your sales team a detailed picture of your ideal client, where to find them and how to convince them to say yes.
Overview of the tax provisions in the 2010 Tax Relief Act
December 17, 2010
The recently enacted “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010” is a sweeping tax package that includes, among many other items, an extension of the Bush-era tax cuts for two years, estate tax relief, a two-year “patch” of the alternative minimum tax (AMT), a two-percentage-point cut in employee-paid payroll taxes and in self-employment tax for 2011, new incentives to invest in machinery and equipment, and a host of retroactively resuscitated and extended tax breaks for individuals and businesses. Here's a look at the key elements of the package:
- The current income tax rates will be retained for two years (2011 and 2012), with a top rate of 35% on ordinary income and 15% on qualified dividends and long-term capital gains.
- Employees and self-employed workers will receive a reduction of two percentage points in Social Security payroll tax in 2011, bringing the rate down from 6.2% to 4.2% for employees, and from 12.4% to 10.4% for the self-employed.
- A two-year AMT “patch” for 2010 and 2011 will keep the AMT exemption near current levels and allow personal credits to offset AMT. Without the patch, an estimated 21 million additional taxpayers would have owed AMT for 2010.
- Key tax credits for working families that were enacted or expanded in the American Recovery and Reinvestment Act of 2009 will be retained. Specifically, the new law extends the $1,000 child tax credit and maintains its expanded refundability for two years, extends rules expanding the earned income credit for larger families and married couples, and extends the higher education tax credit (the American Opportunity tax credit) and its partial refundability for two years.
- Businesses can write off 100% of their equipment and machinery purchases, effective for property placed in service after September 8, 2010 and through December 31, 2011. For property placed in service in 2012, the new law provides for 50% additional first-year depreciation.
- Many of the “traditional” tax extenders are extended for two years, retroactively to 2010 and through the end of 2011. Among many others, the extended provisions include the election to take an itemized deduction for state and local general sales taxes in lieu of the itemized deduction for state and local income taxes; the $250 above-the-line deduction for certain expenses of elementary and secondary school teachers; and the research credit.
- After a one-year hiatus, the estate tax will be reinstated for 2011 and 2012, with a top rate of 35%. The exemption amount will be $5 million per individual in 2011 and will be indexed to inflation in following years. Estates of people who died in 2010 can choose to follow either 2010's or 2011's rules.
- Omitted from the new law: Repeal of a controversial expansion of Form 1099 reporting requirements.
- Also not included: Extension of the Build America Bonds program, which permits state and localities to issue federally-subsidized municipal bonds.
I hope this information is helpful. We'll keep you posted on the details as we analyze them. If you would like more details about these provisions or any other aspect of the new law, please do not hesitate to call..
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Qualified Real Property Expensing for 2010-2011
November 11, 2010
For the first time in history, expensing provisions under IRC §179 now extend to qualified real property in 2010 and 2011. Historically, real property has been exempt from expensing provisions under Section 170 of the Internal Revenue Code. To be precise, real business property is depreciated over 39 years using the straight-line method of depreciation, and land is not allowed to be depreciated. Note, however, that land improvements and qualified real property are allowed to be depreciated over 15 years under pre-2010 Small Business Act law. Land improvements include improvements such as sidewalks, roads, bridges, fences, docks, landscaping, and drainage facilities. Qualified real property, per IRC §179(f)(2), is:
1) Qualified leasehold improvements property
2) Qualified restaurant property
3) Qualified retail improvement property
Section 168 further details these segments of real property. IRC §168(e)(6) describes qualified leasehold improvement property to be improvements to an interior part of a nonresidential building that is conditional to a lease and used exclusively by the lessee. IRC §168(e)(7) defines qualified restaurant property as any Section 1250 property improvement or building in which more than 50% of the building’s space “is devoted to preparation of, and seating for on-premises consumption of, prepared meals.” Finally, qualified retail improvement property is described in IRC §168(e)(8) as improvements made to the interior of a nonresidential building which is open to the public and used for selling tangible property. All of these types of property require the improvement to occur three years after the building has been put into use.
The Small Business Jobs Act of 2010, allows this “qualified real property” to be expensed up to a maximum of $250,000 annually in 2010 and 2011. Other Section 179 rules apply to this expensing as well, since this provision is simply an extension to the definition of Section 179 property. One such rule is the $500,000 ($2million phase-out) limits. For instance, if a taxpayer put $300,000 of machinery into use during 2010 and made $250,000 in leasehold improvements, only a total of $500,000 could be expensed via Section 179. To what the expensing applies is the taxpayer’s choice. The remaining amount would be depreciated straight-line over 15 years. Also, since this expensing is good for 2010-2011, qualified real property expense cannot carryover to 2012 and beyond. Therefore, it would be prudent to expense as much qualified real property expense as possible.
This new rule is a pleasant tax break for all businesses that have qualified real property. This type of an asset is normally depreciated over 15 years, so being able to expense it in the year incurred is a great tax break for starting or expanding businesses. Expensing of qualified real property is commensurate with the other Section 179 provisions, but that seems okay as the total expensing limit was raised $250,000, the amount of qualified real property available for expense. Finally, we see the opportunity for tax planning considering carryovers of this expense cannot go beyond 2011. Overall, this expanded definition of Section 179 expense is a welcome improvement for taxpayers ready to take advantage of this tax break.
Please call us at 480-517-0988 for a tax planning session or if you have any questions.
-Tyler Anderson
2010 Small Business Jobs Act
September 26, 2010 On Monday September 27th, the President is expected to sign into law the Small Business Jobs Act of 2010. Once codified into law, this legislation will provide many benefits to businesses for tax years 2010 and 2011. Interestingly enough, other provisions of the legislation will help pay for these tax cuts beyond the life of the cuts. Understanding this legislation is important in knowing the benefits and consequences for the tax years 2010 and forward. The benefits of the Small Business Jobs Act of 2010 include the following: 1. Section 179 Expense: The election to expense the purchase of new equipment is increased to $500,000 with a phase-out beginning at $2 million for 2010 and 2011. Previous §179 expense was capped at $250,000 and was set to revert to $25,000. 2. Real Property Expense: This is a first in the history of the §179 expense elction. Now qualified real property up to $250,000 can now be fully expensed in tax years 2010 and 2011. Qualified real property includes (a) qualified leasehold improvements, (b) qualified restaurant property and (c) qualified retail improvement property. Qualified real property is normally depreciated over 15 years.
3. Bonus Depreciation: Fifty percent first-year bonus depreciation on new assets was extended through 2010.
4. Start-up Expense: New business start-up expense deductions are increased to $10,000 from $5,000. Normally any start-up expense over $5,000 is amortized over 15 years. 5. “BIG” Tax Holding Period: The period in which the built-in-gains tax is subject to a previously converted corporation is shortened to five years beginning after 2010. This affects any corporation that was converted to an S from a C corporation before 2006, which holds appreciated property and who may be ready to sell those assets; it is advisable to wait until 2011 to sell any assets. 6. Self-employed Health Insurance: Health insurance paid for self-employed individuals can now be used to offset self-employment income. Previously, health insurance paid by self-employed individuals could only be used as a deduction for adjusted gross income, and consequently did not offset earnings subject to self-employment taxes. This deduction is eligible for 2010. 7. Cell Phone Use: Cell phones no longer fall under the definition of “listed property.” Listed property is that which is governed by §280F, which mandates strict business-use substantiation. Furthermore, §280F requires depreciation recapture if business use of the listed property falls below 50%. Now business cell phones can be depreciated like any other normal business equipment without the exhaustive substantiation requirements. These are some major changes that help small business in the tax years 2010 and 2011. Other changes include a five-year carry-back of general business credits, increased first-year auto deduction, and a relaxed penalty for failure to include reportable transaction information with your tax return. These are the good things in the Small Business Act. Since the Act must be revenue neutral what is the downside to the new rules? To pay for the tax breaks in the Small Business Act, Congress increased certain penalties. Penalties for failing to file an information return have at least doubled, and the maximum penalty that can be assessed has increased three, four, and five times depending on the “tier” your information return falls under. Information returns are those that do not assess tax, but simply report certain business transactions to the IRS. Examples of information returns include pass-through S corporation and partnership returns, trust and estate returns, W2’s, and 1099’s.Another unfortunate consequence of this new legislation is an added requirement of landlords, starting in 2011, to report expense payments to service providers of $600 or more to the IRS. This means that every landlord, whether passive or active, will be required to get pertinent information of certain service providers, i.e. name, address, and identification number. Note that failure to comply with this new requirement will result in the increased penalties discussed above, and the filing of an incorrect 1099 can also result in large penalties. We recommend a Form W-9 be used in collecting service provider information. A service provider is legally obligated to complete a Form W-9. As you can see, there are many great tax breaks that have been created and extended. Increased §179 maximum expense deductions and bonus depreciation make adding new equipment attractive, and greater start-up and qualified real property expense elections incentivize starting or expanding a business. Relaxed requirements and penalties in some areas are traversed with greater penalties and requirements in other areas, but overall this new law will help business owners willing to take advantage of it. Just make sure your recordkeeping is updated and organized to make sure information reporting is adequately met. To set up an review of the planning opportunities for your business, please call us at 480-517-0988. Tyler Anderson
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10 Steps for Getting Paid on Time
August 20, 2010
If we don’t get paid, we go out of business. So with more debtors delaying payment in these tough times, taking action to collect money should be a top priority for small companies. Few small businesses can afford to turn customers away, but being timid about stretched credit terms puts your own company in danger. If you’re not being paid on time it’s harder to find money to settle your own outstanding debts. You didn’t start your business to provide a free credit service to suppliers. But how can you collect money owed, and at the same time, avoid bad feelings developing from previously reliable customers who are falling behind? Try these simple in-house strategies: 1. Review payment termsRe-assess your payment terms for the current market conditions. It could be time to offer additional payment options, such as PayPal, debit card, or to accept additional credit cards (with an appropriate added fee). Consider putting new clients on tighter payment terms on a trial basis with a review to follow, include a small discount for on-time payment if you can afford it. 2. Avoid firm tactics with regular customersYour regular, normally reliable, clients deserve different treatment in debt recovery. Perhaps they came on board years ago with a handshake and now seem like ‘family’? Try co-operation and communication, rather than a heavy hand. A phone call from the director will strengthen relationships between valued but dawdling customers and is a chance to personally explain the impact of late payments on your own cycle and survival. Be ready with options for part-payment or a suitable suspension of supply. Be concerned, but stay firm enough to get the account settled. 3. Credit-check all new clientsIt’s worth the fee to do a background check on new clients, despite the temptation to automatically take on anyone new when business is slow. The cost of your staff’s time chasing money and the potential price of debt collection later is not worth the risk. Besides, a reference check should be accepted as ‘company policy’ by new customers. 4. Focus recovery ‘power’ in the right handsAvoid the trap of turning your sales people or service staff into debt collectors. Mixing messages about employee roles will do more harm than good in the long term. Give the job of bad debt follow-up to one person, along with a set of clear guidelines for action and your full support. 5. Set terms at the saleThe best time to get the message through about payment terms is when you close the sale. Outlining credit expectations early sets the right tone and foundations for later accounts follow-up if necessary. Make it a prominent part of the contract when customers place orders. 6. Empower your invoiceInstead of a monthly run, consider sending invoices as soon as a service has been carried out or when a product is supplied. Print the actual due date on the invoice, rather than a “within 30 days” instruction. These simple changes will speed payment, improve cash flow and identify problem accounts sooner. 7. Calculate average debt ageYou run regular reports to check debt ‘age’, but how do you use the results? To measure average payments against your target terms, divide your accounts receivable by annual sales on credit (not cash sales) and multiply by 365. This shows how efficiently you are managing debts overall, compared with your goal, of say a 30- day payment cycle. A result of ‘55’ for example, will show you are averaging 25 days over your target. 8. Set a collection policyThe chance of recovering payment reduces the older a debt becomes. Establish firm rules for follow-up, such as: a phone call at 7 days overdue; a letter at 14; another call at 21 days; stop supply at 30; write a letter to your collection agency at 60 days. In line with this schedule, set suitable options at certain stages, depending on your relationship with the customer, like part-payment, an instalment plan and whether further purchases are allowed (and their value) if accounts remain overdue. 9. Collect information Securing thorough information about a new account avoids obstacles to debt recovery. Collect as many telephone numbers and alternative contact names as you can and ensure all forms are signed. If possible, visit the customer’s premises. A personal visit gives a valuable impression of their circumstances that a phone call can’t reveal. 10. Be fearless and surviveRemember, uncollected income is just the most obvious impact on your cash flow. Prevention measures will save you the hidden wasted costs of time spent chasing payment. Don’t hesitate to ask firmly for due payment because you fear losing customers. Non-paying clients are not worth having.
Top 10 Cash Flow Tips
July 23, 2010
1. Know your business’ balance sheet thoroughly.
This may sound obvious, but, as your accountant can confirm, many business people don’t know how cash flow works and its significance to keeping their operation afloat. Many owners focus on their business’ profit and loss statement alone. It’s a potentially fatal mistake because healthy profits can mask an impending cash flow crisis. Profit and loss statements don’t usually contain the information required to make an adequate cash flow projection. For that, you’re going to need a structured balance sheet that includes all the influencing factors including debts, interest payments, inventory and so on. This is the basis for your cash flow projection which represents an “educated guess” at the likely incomings and outgoings over the period of time you have selected to map out.
2. Set up a cash flow budget.
You need to focus on forward planning to generate a “best guess” about likely future sales and expenses. There are some cash flow software tools around, but you can also set up your own program in Excel. If you’re not familiar and skilled with Excel software, ask your accountant for help to set it up properly initially. They can also help you select suitable cash flow software.
3. Review and update cash flow budgets regularly.
It’s your best insurance against potential cash shortages. If your business has a predictable cash flow, then cash flow budgeting on a quarterly basis is often enough. If you’re already visiting your accountant for other tax related matters, then you can get a cash flow budget prepared at the same time. The rule of thumb is that the greater the cash flow uncertainty a business faces, the more often a new cash flow budget should be prepared.
If cash is really tight, you might need to move to weekly projections, and decide which invoices you’ll pay and whom you need to get payment from as soon as possible. Watch bank balances and make sure you don’t have checks sitting on a desk waiting to be deposited. This can be time consuming, but you won’t be the first business that has had to do that from time to time.
Rapid growth sounds good but, ironically, too much of this good thing can bring on a cash crunch – which takes many business owners by surprise. A sudden spurt in sales is often accompanied by a run down in stock in-hand and debtors not being tracked or followed up when they go overdue. Strong sales one month often means a cash shortage next month. By monitoring the business’ cash status you can arrange credit from suppliers and banks to cover the temporary shortfalls. However, these arrangements take time to set up so you need to be prepared in advance.
4. Set your credit terms carefully.
If the nature of your business requires offering credit, then it is important to set clear limits to your terms of credit.
5. Get payments in quickly.
Master the art of debtor management. Let debtors know how much time remains before due dates. Stay in close touch with major debtors as payment deadlines approach. Offer small discounts for early payment as an incentive.
6. Pay your creditors strategically.
Take advantage of credit terms and prioritize payments according to the consequences involved in going overdue. Wages, taxes and direct debits are at the top of the list for on-time payment; key suppliers may be prepared to wait a while to keep your business. Don’t pay early just to get a discounted price unless getting the discount is better than being without the cash.
7. Plan for the lumps.
Be aware of when lean cash flow patches are coming up and plan accordingly. Avoid funding major purchases from your business’ working capital unless you are sure you have the cash to cover it.
8. Get finance products working to your benefit.
Overdrafts, premium funding, lease facilities and cash flow funding products can all be excellent tools to help match a business’ cash supply with planned outlays. Even the business credit card can be a good way to ease the squeeze as long as you are sure the debt can be paid before interest kicks in.
9. Don’t incur tax and other statutory penalties.
Save yourself the money and the stress!
10. Keep your hands out of the till.
Make cash drawings for personal purposes according to conservative cash flow forecasts.
Tracy Cobb, CPA
Small Employer Simple Cafeteria Plans
June 11, 2010
For years beginning after Dec. 31, 2010, small employers (average of 100 or fewer employees on business days during either of the two preceding years) may provide employees with a “simple cafeteria plan.” (Code Sec. 125(j)) Under such a plan, the employer is provided with a safe harbor from the nondiscrimination requirements for cafeteria plans as well as from the nondiscrimination requirements for specified qualified benefits offered under a cafeteria plan– o including group term life insurance, o benefits under a self-insured medical expense reimbursement plan, and o benefits under a dependent care assistance program. Note: Once the Simple Cafeteria plans have been established, the employer is deemed as having met the small employer requirement until such time as the average number of employees exceeds 200 on business days during any year preceding any such subsequent year. Tracy Cobb, CPA
New Employee Hiring Incentives
May 6, 2010 There are some important tax benefits that you may be able to take advantage of if you need to hire new employees. The “Hiring Incentives to Restore Employment Act of 2010,” more commonly referred to as the HIRE Act, was passed by Congress and recently signed into law by the President. The Act provides employers with incentives to hire unemployed individuals. The provisions of this new legislation apply to workers hired after Feb. 3, 2010, but only for wages paid after March 18 (the date the legislation was signed into law). For more information on this topic and other business-related issues, please give this office us a call at 480-517-0988 or email us for an appointment at Cobb CPA PC. Tracy Cobb, CPA
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