Tax Time - What is Deductible? Part 1

 What is deductible?

Speaking of deductible expenses and bad advice, there is a lot of bad advice floating around about what is a business expense and how you can convert personal expenses into business expenses.

The IRS, as directed by Congress, has a lot of rules about what is a deductible business expense and under what circumstances the expenses are deductible. Also there are rules about how and what constitutes itemized deductions. 

Your family vacation is probably not deductible, and you cannot hire your 6 year old as your Chief Financial Officer. 

Listen to your tax professional - please.

Notice and Disclaimer: This blog is designed to provide accurate and authoritative information for education purposes only. This blog is not an attempt to provide legal, accounting or financial planning advice, such advice should always be obtained from licensed, certified and/or qualified professionals. 

Readers should be aware this is a dynamic area; professional advisors and reference sources should be consulted regularly for updates. Sources for state and local laws should be consulted when necessary. 

Starting a Small Business - Part 2 - First Steps

 First steps.....

If your business is more than a hobby business or side gig, you need a professional team.

At a minimum you will need:

a lawyer with a lot of small business experience

an accountant (CPA or Enrolled Agent probably)

an insurance agent for liability coverage

How do you find these advisors?

Best way is to talk to small business owners. Also, if you connect with an accountant they can likely connect you to possible attorneys and insurers.

DIY - do it yourself, is usually not a good option. 

Expanding the team will be in Part 3.

Protect the Front Door

 About once a month in our metro area, somebody drives an auto or truck into a building, often through the front door or a front window.

Usually this is an accident, but sometimes on purpose, like the kids who drove through the front door of an outdoor shop and loaded up on guns and ammo and were going to go all gangster (cannot happen now, large concrete barriers).

There are reasonable architectural barriers; curb bumpers, steel posts, and concrete flower pots that will stop or slow down misguided autos.

On a related manner, if you have a drive-under canopy be certain the height is noted with large signs. 

 

Starting a Small Business - Part 1

 Where to start?

Sit down and write a 50 - 75 word description of the business you want to start. 

It may not be as easy as you think.

Then set it aside, and the next day read it. Is it ..... a coherent description of a small business that you 1) want to operate, 2) that will work for customers/clients, and 3) that is viable in your proposed market?

If you have writer's block start this way.

Who

What

When

Where

How

Notice and Disclaimer: This blog is designed to provide accurate and authoritative information for education purposes only. This blog is not an attempt to provide legal, accounting or financial planning advice, such advice should always be obtained from licensed, certified and/or qualified professionals. 

Readers should be aware this is a dynamic area; professional advisors and reference sources should be consulted regularly for updates. Sources for state and local laws should be consulted when necessary. 

Starting a Small Business - Upcoming Series

 Questions arise about starting a small business.

How? What do I need? What about timing? Start up budget? Marketing? Staffing? Staff timing?  Lawyer? Accountant?

The First posts will look at developing a business plan.

Stay tuned.

Disaster Preparedness for Small Business - Part 3

 We are obsessed with checklists, for lots of purposes, and we like to use Excel to prepare our various checklists.

Checklists can be useful in disaster recovery, and are best prepared before the disaster and backed up in the cloud and/or offsite.

Checklists should focus on your biggest concerns and work down the list to your smaller concerns. The lists should be backed up by your data backups, such as an electronic "rolodex" of suppliers, contractors, and employees.

An ounce of prevention is worth 100 pounds of cure.

Bookkeeping is Boring - Part 3

 If, and it is a big IF, Congress passes a tax bill that exempts tips and/or overtime from income taxation, there will be new burdens on payroll accounting.

Payroll accounting is already complicated, and depends on political location, number of locations, and the size and complexity of the workforce.

This may be the year to reevaluate the payroll function from start to finish, and to reevaluate decisions about inhouse versus contracted payroll. 

Work with your public accountants, who can offer advice and who sometimes offer payroll services. 

Notice and Disclaimer

 Notice and Disclaimer: This blog is designed to provide accurate and authoritative information for education purposes only. This blog is not an attempt to provide legal, accounting or financial planning advice, such advice should always be obtained from licensed, certified and/or qualified professionals. 

Readers should be aware this is a dynamic area; professional advisors and reference sources should be consulted regularly for updates. Sources for state and local laws should be consulted when necessary. 

Bookkeeping is Boring - and Critical - Part 2

Bookkeeping is boring and critical to your business.

In the good old days you took your "books" to an accountant once a month or once a quarter and the accountant prepared a financial statement.

With the advent of in-house computing (dominated by Quickbooks (TM)) a small business could do their own bookkeeping all the way to a financial statement.

That did not insure accuracy or completeness. Big problem. 

Accurate bookkeeping increases the odds of accurate financial statement and useful analytics. And that requires work, and review, and more work.

Sloppy or incomplete bookkeeping causes problems. 

In a future post we will discuss analytics.

In the future we will also discuss the impact of bookkeeping on tax returns.