Small Business Profit Maximizer!

Consider Funding a SEP If You Owe 2012 Taxes

If you own a business and find that you have a balance due on your 2012 tax return, you should consider setting up and making a contribution to a Simplified Employee Pension (SEP).  Unlike most pensions that need to be set up before the end of the tax year, SEPs can be established and funded up to the due date of the return, including extensions.  This means that if you filed an extension, you have until October 15, 2013 to use a SEP to reduce your 2012 taxes.

 

For 2012 the maximum deductible contribution is 25 percent of compensation (or Schedule C income) up to $50,000.  This increases to $51,000 in 2013.  One advantage of SEPs is that contributions are voluntary.  This means that you can fund the SEP in good years and skip it in bad years.

 

SEPs usually work best for companies with no employees or very few employees.  This is because the employer will need to make a contribution for all employees age 21 or older who have worked for the company full-time for three out of the previous five years.  In 2013, part-time employees and employees who have only worked for the company for part of the year must be covered if they made more than $550 during the year.

 

Be sure to have your tax advisor calculate your savings if you set up a SEP, and compare this to the required contribution for your employees.  Often you can offer a great employee benefit, fund your retirement, and reduce your income taxes at the same time.

How Mobile Technology Is Increasing Small Business Profits

Smartphones and tablets are allowing small business owners to increase sales and improve customer service.  In fact, mobile solutions are going a long way toward leveling the playing field between small businesses and the mega stores.  But too many small businesses are ignoring mobile technology, one of the best opportunities in years to increase their sales and profits.  Here are some thoughts on how mobile tech can benefit you:

Accept mobile payments.  Get paid when you deliver the product, or upon completion of service.  Nothing improves cash flow like getting paid at the moment of delivery.

Mobile point-of-sales system.  Imagine your customers using a tablet to wander your store, view product demonstrations that emphasize benefits, and allows them to order.  They can enter their credit card information and complete the checkout process using the tablet’s camera to scan bar codes.  They can then pick up their order on their way out of the store or arrange for it to be delivered at a more convenient time.  This could be a game changer; it is really that simple to use.

Using mobile phones to verify delivery.  You can schedule and verify delivery of your product, and provide the customer with an accurate invoice when you’re done.  This allows you to coordinate with your customers in a way that best meets their needs.  Don’t forget to use the GPS system to track your staff and make sure they aren’t losing time searching for a delivery location.

Using before and after pictures with customer testimonials.  Imagine a small contractor who is able to show his prospects pictures of his work with before and after pictures along with videos of customers saying how easy it was to work with him and how they love the work he did.

These are just a few examples that I hope will help you start thinking about how mobile technology can help you gain a competitive advantage.

Best Business Blogs

 

Best Business Blogs: http://digitalmarketer.com/

 

This is my favorite blog for ideas on all things related to digital marketing.

 

Here are four recent blog entries that will give you a feel for what the blog covers (you can search by title on the blog site):

 

• Boost Your Email Results With Social Media Integration discusses the importance of integrating all of your social media platforms to make your marketing more effective.

 

• What Customers Are Really Thinking When They See Your Landing Pages explains how most landing pages fail to convey benefits in terms of what’s in it for the customer.

 

• Grab Your Subscribers’ Attention Beyond the Subject Line discusses how to write a subject line that introduces the email in a way that will get the reader to open your email. 

 

Taking Advantage of the Zero Capital Gains Rate

The 0% tax rate on all or some of your long-term capital gains on assets sold was extended by the American
Taxpayer Relief Act passed in early January.  The following are the capital gains rates for 2013 for various income levels:

 

 

 

 

Here are some strategies that you can use to take advantage of this zero tax rate when you sell your capital assets (stock, mutual funds, rental property, business equipment, etc):

 

• Sell capital assets that have a built-in gain in years where you have a business loss.

 

• Time your sale for the year you write off major equipment sales.  For example:  Your business needs a delivery truck at a cost of $100,000.  You can depreciate the truck over 5 years or take the Section 179 100% first year write-off to lower your income enough to take advantage of the lower capital gains tax rates.

 

• If your income is just slightly over the 0% capital gains rate, consider accelerating those itemized deductions that you have control over.  Common itemized deductions that you can pay early include property taxes, charitable gifts, medical expenses, and employee expenses.

 

Warning:  Don’t forget that the 0% capital gains rate only applies to assets that you held longer than one year.  Short-term gains are taxed at ordinary income tax rates.

Best Cloud Computing Software

Everybody seems to be touting cloud computing these days, and for good reasons.  Cloud computing lets you work from anywhere and on any device.  It also allows you to work with outsourced employees or employees who may be out in the field (technicians and outside salesmen).  It also allows you to share files with customers and vendors.

 

Two of my favorites are:

 

Right Networks

You should seriously consider Right Networks if you use QuickBooks or Peachtree and have multiple locations, want to share data with your accountant, or just want to have access to your records anywhere, any time.

 

We have been using it for years with clients whose accounting we do, and have had no serious issues.  Their support for QuickBooks is far better and more responsive then Intuit’s.  And it’s free!

 

Dropbox

The words “Your stuff, anywhere” are the first words you see when you go to their website.  And that is a simple description of what Dropbox is—a hard drive in the cloud.  It is a great place to securely store files, pictures, music, and whatever else you normally store on your hard drive.

 

One of the best advantages of Dropbox is the ability to securely share files.  Better yet—you can control who sees what files.

IRS Posts Charitable Deduction Tips

Over the last few years, IRS auditors have been focusing on charitable contributions.  The IRS is always suspicious that taxpayers are inflating their charitable deduction amount (I first wrote about this on my 3/1/12 blog titled IRS Declares War on Charitable Contributions).  Failing to follow the strict letter of the tax law and IRS regulations will result in your deduction being disallowed.

 

The IRS recently posted a reminder on its website featuring nine tax deduction tips (IRS Tip 2013-45 04/01/13):

1. To qualify for a deduction, you must make the donation to a qualified charitable organization.  You can’t deduct contributions made to an individual, a political organization, or a candidate.
2. A taxpayer must file Form 1040 and claim itemized deductions on Schedule A.  They must also must file Form 8283 for non-cash charitable deductions that exceed $500 for the year.
3. If you receive a benefit of some kind in return for your contribution, you can only deduct the amount that exceeds the fair market value of the benefit you receive.  An example of this is reducing your donation by the value of a meal you receive at the event.
4. Donations of stock or other non-cash property are usually valued at fair market value.  Used clothing and household items need to be in good condition.  Special rules apply to vehicle donations.
5. Fair market value is generally the price you would receive if you sold the item.
6. You must have a written record of your donation to deduct any cash gift, regardless of the amount.  The documentation should include the name of the organization and the date and amount of your contribution.
7. For gifts above $250, you must obtain a written statement from the qualified organization detailing the amount of the cash donation or a description of any property given.  It must also state whether the organization provided any goods or service in exchange for the gift.
8. You may use the same document to meet the requirements of a written statement for any cash gift and a written acknowledgement for contributions of $250 or more.
9. If a taxpayer donates one item or a group of similar items that are valued at more than $5,000, Section B of Form 8253 must be completed.  Be sure to obtain an appraisal from a qualified professional before making a donation of this size.

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QuickBooks Blogs

Here are two of my favorite QuickBooks blogs:

 

QuickBooks and Your Business (www.blog.quickbooksusers.com)

This blog has been providing QuickBooks help and guidance since 2010.  The articles are easy to read with great information.  Recent blog posts:

• What Mobile Devices Do QuickBooks Users Use Most?
• How to See What Your Users Have Been Deleting
• How to Make QuickBooks 2013 Look More Like Old QuickBooks Versions
• How to Protect the Viewing of Customer Credit Card Numbers
• How to Create a Purchase Order in QuickBooks [video]
• Help!  I Lost My QuickBooks Password!

 

The QuickBooks Specialists’ QuickBooks Help Blog (ww.theqbspecialists.com/quickbooks-help)

This blog by Ruth Perryman has a simple concept.  QuickBooks users write in with questions, and Ruth answers them.  The questions deal with errors and “How do I…?” questions.  So if you’re looking for a specific answer to your problem, this is a great blog for you.  Recent blog posts:

• How to Set Up Main Categories For QuickBooks
• How to Track Inventory in Multiple Locations in QuickBooks
• News Flash – Duplicate Credit Card Charges in QuickBooks POS With Intuit POS Merchant Account
• How Will Independence Day Affect My QuickBooks Payroll Processing?