Archive for January, 2011

Maintain Your Business: Common Tax Deductions

Thursday, January 27th, 2011

January is winding down meaning that tax season is officially upon us. Gone are the carefree days of the holiday season and now the inevitability of taxes is looming ahead. Don’t lose heart though! Paying taxes is a requirement but paying too much in taxes is not. 2011 presents new opportunities to excel at preparing your taxes by using the allowable deductions to your advantage. Here are five of the most commonly missed tax deductions. Learn them. Love them. Use them on your tax return this year.

1. Healthcare Tax Credit. If you own a small business that pays for at least half of its employees’ healthcare coverage, you’re eligible for a tax credit of up to 35% of what you spend on the health insurance premiums. The credit is maximized for businesses that have ten or fewer employees that average $25,000 or less in annual wages so smaller businesses are favored here. If you have a qualifying business (based on number of employees and average annual wages) but aren’t paying for at least half of your employees’ healthcare coverage, now is the time to consider changing your practices. The maximum available credit will be raised to 50 % in 2014!

2. Health Insurance Deduction for the Self-Employed. Maybe you’re self-employed and paying for your own health insurance? In past years, the money you spent on health insurance premiums has only been eligible as a deduction on your income tax, not your self-employment tax. This year, however, it’s available as a deduction on both taxes. Don’t forget to include it twice when you prepare your returns.

3. Depreciation on Your Business Car or Truck. If you bought a new truck or car for your business last year, this one’s for you. Depreciation amounts on new passenger vehicles purchased to use in a business are significantly higher this year than last, building on top of the usual first-year deduction that is allowed. Gas and maintenance on this vehicle (and others already purchased for your business) are also deductible for any transportation you do for the business. Say you own a furniture store and have a truck you use exclusively for delivering furniture, 100% of gas and maintenance will be deductible, including any money you pay for parking and toll roads.

4. Out of Town Business Travel Costs. Almost any travel you do for business is deductible on your taxes for at least some percentage. This includes business meals, travel costs (think baggage fees!), and hotel rooms for the duration of your trip. It’s important to keep the receipts from your travels and also keep track of where you’ve been and what you did while there. A cab here and there while out of town for business can add up quickly on your tax return.

5. Home Office Deduction. Do you work out of a home office? If so, there are many deductions you may be missing on your tax returns. Deductions for qualifying newly acquired equipment and computer software are easy enough but it’s important to know that you can take deductions for many fees charged to your business account including ATM fees, credit card fees, and bank charges. You can even deduct for the space you use in your home and for the percentage of internet and phone that you use for your business! While calculating these percentages may seem difficult in the beginning, it can be a great benefit to you in the end when it comes time to pay your tax bill.

Many of these deductions may seem easy enough to master now but when combined with the other myriad of deductions, credits, and exemptions that must be remembered when filling out a tax return, they frequently fall by the wayside. Don’t let this happen to you!

Learn more about managing your small business HERE!

Entrepreneur.com: Ways Your Small Business Can Save Money

Wednesday, January 26th, 2011

It is no secret that the economy has led many small businesses to think of new, inventive ways to save money. Free social networking sites such as Twitter and Facebook help business to make their presence known in the online community, while saving a great deal of money.

Many other ways exist to save money, such as implementing do-it-yourself legal work. Entrepreneur.com listed MyCorporation as a leader in providing do-it-yourself legal work, which in turn can save your business hundreds on legal fees. MyCorporation also provides similar services such as online incorporation, DBA registration and trademark applications. Here are a few other tips Entrepreneur.com lists for cutting costs in your small businesses:

1. Share office space. If the downturn left you with empty desks, sublet them to other entrepreneurs. Or instead of owning your own office space, take advantage of the booming marketplace in temporary and shared office space. If you only need an office to impress customers once a year at a big meeting, you don’t need to pay rent on an office year-round anymore.

2. Buy secondhand office furniture. If you’ve ever priced new office furniture, you know it’s a major cost if you’re starting a business, moving offices or remodeling. But you can buy furniture for your office from liquidators and often save 50 percent or more.

3. Go virtual. Some surprisingly large and successful companies don’t have offices at all these days. Their teams are entirely virtual, and everybody works from home, wherever in the world they are. This company structure allows your business to tap into a broader talent pool, since many of the best creative minds won’t relocate and want to stay home-based.

4. Hire contractors. Full-time employees are a major cost, both in terms of fringe benefits and possibly office space to house them. Evaluate carefully if you really need a full-time staffer, or if perhaps you could save by having a contractor work part-time or on a per-project basis instead. You could even contract out your top management — for instance, get a CFO to come in one day a week if that’s really all you need.

Learn more ways to save your business money by reading the rest of the article HERE. Once you’ve decided to start saving money, let MyCorporation help you! Found out more HERE!

Expanding Your Business by Building Business Credit

Thursday, January 20th, 2011

Once your business is up and running, expanding is the next logical step! A business can never have too many customers, but as the old saying goes, it takes money to make money. Finding the financing for more advertising or creating new products can be tricky and in many cases, an entrepreneur has already tapped into all the usual (and easy!) sources- family, friends, and personal credit cards. Fortunately for the wise entrepreneur, there’s still one major source left: business credit.

1) What is Business Credit? Business credit is very similar to personal credit. It allows a company to get financing under the business entity’s name and is based on an assessment of the business and its finances by established business credit bureaus.

2) If it’s Similar to Personal Credit, Why Should You Have It? Using your personal credit to take out numerous loans harms your personal credit, while taking out numerous loans with your business credit harms neither your personal nor your business credit because business credit reports take into account the financing required for a business. Also, running a credit inquiry detracts a little from any credit and even a few inquiries can harm your personal credit. When using business credit, reports are only run on your business credit, and it can withstand more inquiries before it starts to decrease. Lastly, business credit is better for business expenses because it allows you to keep your personal finances private and to keep your personal credit line free in case you need it.

3) How Do You “Get” It? The first big step in building your business credit is creating your business entity. LLCs or corporations are typically the best entity choices for this because they remove some of the liability from you personally. Next you will need to obtain a tax ID number/EIN (Employer Identification Number). Both of these steps are easily done through most online filing services. Third, register your company with a business credit bureau. The big four business credit bureaus are Dunn and Bradstreet, Experian Business, Business Credit USA, and Equifax Business. These business credit bureaus frequently have different requirements regarding what you need to register and maintain a positive credit approval so make sure you pay attention to the details as failing to comply with these rules can actually harm your credit. After all this is done, business credit is built and improved by working with businesses that will accept your business credit instead of your personal credit.

4) How Does It Work? The business credit bureaus gather information about the trade credit transactions your business engages in and then they use it to create a business credit report about your company. Trade credit is when a business issues another business credit so your credit report is a direct reflection of how promptly and responsibly you pay off loans or debts you have with other businesses. This information is sent in voluntarily by the businesses however, making it important for you to choose to work with other businesses that will report your prompt payments. The credit reports also take in to account the credit cards and bank loans you have, as well as similar financial information. While not the only factor considered, paying your bills on time and keeping your credit cards low are two of the best ways to ensure you have a good credit report.

5) What Can You Do with It? In many cases, business credit allows you to receive higher amounts of financing than you would ordinarily be able to. In addition, being listed with a business credit bureau gives your company a better reputation and encourages lenders to loan you money. Vendors are able to contact the business credit bureau you are listed with and confirm that you are a reliable business that values making payments on time, thus encouraging vendors to work with you. Establishing business credit also allows you to monitor your credit as your business grows, paving the way for a successful and prosperous future. Essentially, business credit makes you a more desirable candidate for financing, exactly what you want to be when you are trying to expand your business.

Business credit is a very useful resource in the entrepreneur’s tool belt but not many business owners make it work for them. Don’t let yourself be one of them! Start your business off in the best way possible, and keep in mind what you can do to grow your business. Make 2011 the most successful year yet for you and your business! Learn more about business maintenance for your corporation HERE!

Financing Your New Start-Up

Tuesday, January 18th, 2011

Once you have an idea for a business, the next step is trying to raise money to make your dream a reality. One of the biggest challenges facing a prospective business owner today is financing. Where do you find the money? How do you get it? For the business savvy owner, there are many different options for finding the money you need to start your own business.

1) Friends and Family
This is the most obvious place to look for financing options. Many loyal friends and relatives are more than happy to put some money into a start-up business when asked by someone they love and trust. Remember, though, to expand your friends and family circle, and don’t just look to your immediate family members and best friends. Make a list of everyone you know, including acquaintances that you see infrequently, and then follow up with those people too. You never know who shares your interests and might want to put some money into a business they believe in.

2) Internal Financing
Personal loans and credit cards are great ways to get your start-up business off the ground with your own money. Some retirement funds will let you either borrow money from your account to be paid back like a loan or even let you roll over those retirement funds you have accrued over your lifetime into your new business’s retirement funds, to be redirected as you want.

3) Make the Money You Already Have Work for You
If you need a building for your business, consider leasing instead of buying or if you need to buy, finance the amount of the building over a long-term period. If you buy the building, you can even use the property value as backing for a loan. Also look at the suppliers you use for financing. Equipment suppliers may be willing to let you purchase equipment with a loan from the manufacturer or short-term credit may be available from suppliers who have seen you pay your bills on time before.

4) Small Business Loans and Grants
While not always a viable option, especially in the current economy, the government and many banks will provide loans or loan programs to small businesses. The United States Small Business Administration is a good place to start looking for loan programs that are backed, but not provided, by the government. The banks in your neighborhood may have similar programs where the bank provides the loan itself. Government and private grants are another way to raise money for your start-up but can be industry specific, such as healthcare or hi-tech. Make sure you do your research and apply for the grants that are best for you.

5) Partners and Investors
Finding a few partners and/or investors that share your interests and you get along with can be the key to successful financing. Not only do partners and investors give money, finding a couple of partners or investors can make you money in two other ways. First, they involve themselves in the business and have a vested interest in the business doing well. They may bring other types of experience to the business and this is helpful for getting your start-up going in the best possible direction. The second way partners or investors help make the company money is that many other financing entities (including banks, grants, trade associations, and venture capitalists) feel more comfortable giving money to a business that has partners and investors. Getting involved with trade associations that apply to you, attending conferences that invite people who share your interests or expertise, and subscribing to industry journals are three great ways to finding compatible partners and/or investors.

6) Look for Associations that are Looking for You
Some business associations specifically look for a certain type of owner or product to invest in and if they’re looking for you, you should be looking for them. For example, there are some organizations that give small business loans to women and minorities. Others look for very small companies with lower financing needs, while still more organizations seek out small business owners in certain industries. Many of these resources may not apply to you but looking out for the opportunity that does is still a good way to obtain financing for your start-up.

7) Angel Investors and Venture Capitalists
Finally, angel investors and venture capitalists are important if you are looking for substantial amounts of money and can expect high revenues in a relatively short period of time. Venture capitalists are institutional investors who pool money together into one investment in a company. Angel investors are essentially individual venture capitalists who use their own money to invest in companies. To find angel investors and venture capitalists, prepare your business plan and submit it to venture capitalist firms or clubs, angel groups (sometimes found by contacting your Chamber of Commerce), and institutions such as universities. Angel investors and venture capitalists don’t typically invest in many businesses a year so applying to many different places is your best bet.

Now that you’ve got your financing, you’re ready to start running your company. Remember that incorporating will protect your hard earned assets! Incorporate your business HERE!

MyCorporation on KCAL 9

Tuesday, January 11th, 2011

MyCorporation.com CEO Deborah Sweeney recently appeared on KCAL 9 to discuss simple tips to get your business booming. Deborah provides five tips to help you take an idea and make it a business.

1) Decide what Kind of Business You Want and Do Some Research. Before you do anything else, ask yourself some questions. What are you passionate about? Do you like to work alone or with a team? What are your strengths and weaknesses? Then, take these answers and do some research about your desired field. Keep in mind what you love to do, and what you’re good at. Starting a business takes a lot of time and you will definitely want to be spending that time working on something you enjoy.

2) Create a Long-Term Business Plan. Next, come up with a written business plan that takes in to account the questions you have asked yourself. If you work better with a team, plan for employees or partners. If you aren’t very good with accounting, think about easy ways to keep your financials in order. In your business plan, focus on where you want your business to be in 5 or 10 years, then work backwards to this start-up phase. Your long-term goals might dictate your current plans, and having a path set out for you will save you time and energy down the road.

3) Find Financing. The next step is financing your goals. There are many ways to get the money for your business, including friends and family, personal credit, and loans. Be sure to also look for partners/investors and associations that are looking to invest in people like you! This is also a good time to be thinking about building business credit. Business credit will allow you to take out loans in the name of your business, and these types of loans can have higher amounts and lower interest rates than personal loans.

4) Use an Online Filing Company to Make your Business Official. Creating a legal business entity early on in the start-up process is important to protect your personal assets from liability. Online filing services will create your business for you and save you lots of money in the beginning when it really counts. Lawyers can cost around $200 an hour but online filing services will typically charge less for filing your entire business, a process that could take a lawyer more than 4 hours. Using an online filing service guides you through the filing process and helps ensure you do it right the first time.

5) Protect your Business with Trademarks. After you’ve worked to bring your business idea to life, protecting it becomes important. Companies with similar names or offering similar products can steal customers away or negatively impact your reputation. Registering your business name and product protects against this scenario and allows you to be a unique company, saving you from consumer confusion.

Check out the entire interview HERE

Get started today with your business HERE