Small Business Profit Explosion

Tax Tip Of The Week: Build The “Disabled Access Credit” Into Your Remodeling Plans

If you are planning improvements or equipment updates you should consider the “disabled access credit”. The credit is equal to 50% of the first $10,250 (first $250 is excluded) for a maximum credit of $5,000. Don’t forget that a credit equals a direct reduction of taxes dollar for dollar.

The credit can only be claimed by a qualified small business that is making their premises more accessible to disabled individuals. A “qualified small business” is one with gross receipts of $1 million or less or one that didn’t employ more than 30 full-time employees in the preceding tax year.

The expenses must be incurred to meet requirements established by the American Disabilities Act (ADA). For instance, a small business can claim the credit for the following costs:

• Removal of architectural, communication, physical, or transportation barriers that prevent a business form being accessible to, or usable by, disabled individuals.
• Providing qualified interpreters or other effective methods of making orally delivered materials available to hearing-impaired individuals.
• Providing qualified readers, taped text and other effective methods of making material available to visually impaired individuals.
• Acquiring or modifying equipment or devices for disabled individuals.
• Providing other similar services, modifications, materials, or equipment.

The modifications do not have to exclusively benefit disabled individuals.

Like any good CPA, I need to add a disclaimer: unfortunately, it is impossible to offer comprehensive tax info over the internet, no matter how well researched or written. And remember, I love my readers but having me bookmarked on your computer doesn’t make you a client: before relying on any information given on this site, contact a tax professional to discuss your particular situation.

 

TEXAS SALES TAX 101: AN INTRODUCTION

The Texas Limited Sales, Excise & Use Tax Act imposes a tax on sale, lease or rental or personal property (touchable & movable) and on certain services. In general, Texas imposes the sales tax on the on the end user based on the sales price of each item of a taxable sale.

Most business owners understand sales tax law, but are unaware of the Texas Use Tax which applies to the purchase of items out-of-state and then brought into Texas. Since a non-Texas retailer made the sale, Texas sales tax would not be collected at the time of the sale. The use tax applies to “any taxpayer who purchases tangible personal property from any retailer for storage, use or other consumption in Texas.”

In Texas, the tax law presumes that all retail sales or uses of tangible personal property are taxable. This means that unless you can find a specific exemption that specifies that a product is non-taxable (such as orthopedic products) then a product is taxable.

No such presumption for services exists. This means that unless the law states that a service is taxable then your service is not taxable. (We will cover taxable services on a future blog article.) 

Like any good CPA, I need to add a disclaimer: unfortunately, it is impossible to offer comprehensive tax info over the internet, no matter how well researched or written. And remember, I love my readers but having me bookmarked on your computer doesn’t make you a client: before relying on any information given on this site, contact a tax professional to discuss your particular situation.

 

MYTH VS TRUTH: SALES TAX IS NOT A THREAT TO MY BUSINESS

The myth most business owners believe: Most business owners never worry about sales tax after they first open their business. At that time they set up their procedures and then believed that, as long as they paid their sales taxes monthly, there was nothing left to worry about.

Why this myth causes a problem: In a word - audit! My clients have been audited at a higher rate than any time in the last 20 years. And, based on my discussion with other CPA’s, this is happening city wide.

The truth successful business owners learn the hard way! Sales tax audits are a bigger threat to your business survival than almost anything else. The sales tax audit from my last three client audits resulted in an average bill of over $100,000. (Of course, after appeal we expect to pay much less).

Lesson learned: As a business owner it is your responsibility to do a threat assessment annually. You should learn the sales tax laws that apply to your business and do an annual self audit to determine your potential exposure.

To help you, I will be writing a series of blog articles titled TEXAS SALES TAX 101. Look for the first installment tomorrow.

 

$13.7 To $16.7 Billion In Improper Earned Income Tax Refunds Issued By The IRS

A new report from the Treasury Inspector General for Tax Administration (TIGTA) reported that the IRS has not been fully compliant with a federal law requiring it to eliminate and report improper government payment to taxpayers (TIGTA Ref. No: 2012-40-028, March 2, 2012).

The IRS estimates that 21% to 26% of Earned Income Tax Credit (EITC) payments were paid improperly. This is an astounding $13,700,000,000 ($13.7 billion) to $16,700,000,000 ($16.7 billion) in taxpayer funds that the IRS failed to stop from being wasted.

Just a suggestion – maybe some of the thousands of new IRS agents that have been hired should be concentrated here. 

 

Client Question – I Do Non-Compensated Work For A Charity. Can I Deduct Auto Expenses?

Answer: Not exactly. If you use your own car, you may deduct actual gas expenses plus related tolls and parking fees attributable to charitable related travel. Instead of keeping detailed records, you may choose the IRS-approved flat rate deduction of 14 cents per mile in 2012.

Like any good CPA, I need to add a disclaimer: unfortunately, it is impossible to offer comprehensive tax info over the internet, no matter how well researched or written. And remember, I love my readers but having me bookmarked on your computer doesn’t make you a client: before relying on any information given on this site, contact a tax professional to discuss your particular situation.

 

Marketing Tip of the Week – We’re Expanding!

We are proud to announce or newest project, Innovative Marketing Consulting (IMC). We are offering affordable marketing options for small businesses.

We offer everything from social media set-ups, simple websites to customized marketing programs. In the near future we will also offer mobile applications and Search Engine Optimization (SEO).

Our goal is to help small businesses owners market their business using the newest technologies regardless of their budget or experience. IMC can give small business owners the chance to utilize internet and other marketing media and have it make them money!

Go to http://www.imcelpaso.com/ to learn what we can do for you!!

 

We’re Back!!!

After a well needed post tax season break, we’re back and ready to get to work! We are back to our normal business hours of M-TH 8AM to 5:30PM and Friday 9AM-5PM.

We want to thank all of our clients for their patience during our tax season rush. We are now accepting appointments and want to see you! We are catching up with all nontax work and are available to help with any of your financial needs.

We are currently working on our new small business product and will be introducing them on June 1^st.

We appreciate your continued support and as always, we’re committed to your financial success. 

 

We’ve Been Hacked!

During our mini vacation our blog was hacked! We apologize for any inconvenience this may have caused. We are no way associated with any blogs that were posted from April 1, 2012 to April 23, 2012. 

 

Marketing Tip of the Week – Why Blog?

All businesses need to have a blog; no excuses! It’s free, it educates your customers and it can lead to sales!

There are SO many free blog sites that allow you to create a blog that is easy to manage! Blogs give you a forum to tell your customers about your industry, why they need you and how you can solve their problems! On top of that, you can highlight new products, promote events, reward certain customers, discuss hot topics in your field - the list goes on and on! It’s your company’s voice!

Go create your blog today and give your company a step up on your competitors.

If you need help with your marketing we’re starting a new company, Innovative Marketing Consulting, which specializes in internet marketing and consulting. Go to www.imcelpaso.com to learn more! 

 

For The Busy Business Owner That Can’t Keep Track Of Their Mileage And Expenses!

I’m always looking for things that can help my business clients keep better records and I came across Texthog.com.

Texthog is an online program that allows users to text their expense to their account and the program will keep track of the amounts you have spent. With the paid accounts you can take pictures of your receipts, track mileage, and create subaccounts and reports. It’s inexpensive too! It’s only $7 a month or $50 a year for 2 users. Trust me; it will probably save you a lot more than that in taxes and is a tax deductible item for businesses. Go to www.texthog.com to check it out.

FYI- I do not get paid to products or services I promote. I just like to promote things that I feel will help people make their lives easier. 

 

Tax Tip of the Week – YES, We’re Still Here!

We’ve been working so hard on tax returns these last few weeks that we’ve neglected our poor little blog. 

Just a reminder, if you haven’t brought in your tax information you need to do it, and soon! The deadline this year is April 17^th.

We can only guarantee we can get your tax return done by the deadline, is if you bring you COMPLETE tax information to the office by April 4^th. After that, we can no longer guarantee it will be done by the deadline. Remember, if you owe money this year and do not meet the deadline you will be charged interest and penalties. If you need an extension, please call our office at 915-857-8158 so we can submit one for you.  Again, if you owe money and file an extension you will still be charged interest and a penalty for not paying your taxes by April 17^th.

Now back the tax tip of the week. We read this article regarding which deductions never to take. A lot of the deductions are questions that we get often. Click on this link, http://yhoo.it/GWLXAM. We hope it helps clarify any questions. 

 

Marketing Tip of the Week- Make it Fun!

Customer’s like to feel like they’re a part of something special and exciting. So, when you’re planning promotions try to make them special and exciting! Use your creativity!

We have seen business owners give away prizes, give free food and drinks, or invite guest speakers or bands; anything that draws people to your location!

Just remember to sell once the crowd is there! I have heard business owner’s complain people just come for the free stuff. But, the owner only did half the job! Aside from your hosting duties, you and your staff have to take advantage of the crowd and make your sales pitch! Change the store layout, go over sales techniques with your staff and be prepared.

So make this month’s marketing fun and exciting!

 

Customer Question of the Week – My Child is Working Can I Still Claim Them on My Taxes?

If they’re under 18 or younger, yes.

Once your child marries you can no longer claim them, even if you’re supporting them.

It’s when they get older that it gets tricky. In order to claim your child that is over 18 they must be a full time student for 5 months or more and you must have supported them for the year. Their yearly income can exceed $3,700 for the year.

If your child is over 18 and not a full time student,  the only way you claim them is if they make less than $3,700 for the year and you must have paid over half of their living expenses.

Once your child turns 24 it no longer matters if they’re a student or not. The only way to claim them is if they make $3,700 or less for the whole year.

Your child may need to file a tax return; but, they must specify they are being claimed by someone else. If they do not, this can cause problems with your tax return. There are ways of fixing this, but it will take time and other tax preparation fees may accrue.

I hope this clarifies the whether or not you can claim your working child. It can get complicated. If you need any more clarification, call our office at 915-857-8158. 

 

Tax Tip of the Week - Last Chance to Receive Your 2008 Refund!

If you haven’t filed your 2008 personal income tax return and have a refund, you will lose that money if you don’t file by April 15, 2012.

The IRS will only payback refunds up to 3 tax years. On April 15, 2012, the 2008 tax year will expire and the government will keep your money! Little known fact- though the IRS will only allow refunds 3 years back, they can go back at least 10 years to collect owed taxes.

So, get that 2008 tax return in before April 15, 2012 if you were owed any money and haven’t filed your 2008 tax return.

Like any good CPA, I need to add a disclaimer: unfortunately, it is impossible to offer comprehensive tax info over the internet, no matter how well researched or written. And remember, I love my readers but having me bookmarked on your computer doesn’t make you a client: before relying on any information given on this site, contact a tax professional to discuss your particular situation.

 

Marketing Tip of the Week – Your Logo

I have seen many good and bad logos in my day. Here are some tips on how to make sure you don’t pick a bad logo.

• Don’t use an actual picture as a logo – Pictures are hard to reproduce and resize so when you’re printing your letterhead, banners and other business documents your logo won’t print well
• Don’t use clipart- Clip art is a little bit better than a picture but unoriginal! Anyone can use that image. Your logo should be unique and allow your audience to bring your business to mind when they see it.
• Don’t rely heavily on different colors- there may be times where you have to print your logo in black and white. I have seen many logos become unrecognizable because they do not print well in black and white.
• Don’t hand draw you logo- Hand drawn logos look unprofessional. Customers may think you’re too cheap to pay for a professional logo which translates to: This company is unprofessional and may cut corners with my services. Or, This company is too cheap to get a real logo, so their products must be cheap.

When creating your logo remember,

• It should be something that is simple, unique and easy to remember so customers can instantly associate your logo with your company
• Don’t be afraid of spending a little money. There are tons of graphic designers out there that are reasonable with their fees. Remember this is your business’s identity and will be with you for a long time
• Go with what you like! Your logo doesn’t have to be a picture of a toilet if you’re a plumber. Go with something you like and looks professional.

I hope this helps you pick the right logo for your company!

 

Marketing Tip of the Week – 110%-24/7- Or Don’t Even Bother!

My daughter just recently purchased salon services through one of those web deals where local companies offer discounted pricing for their products/services. She saw a deal from a salon that she remembered had a good reputation and was normally pretty expensive. So, she bought the deal.

Once she purchased the deal, she called to make an appointment. That is where things seemed to unravel. The salon’s promotion worked! Apparently, a lot of people had purchased the deal and now it was hard to schedule an appointment. After around the 4^th call the salon offered an appointment on Sunday, which she took.

When she got there with her cousin, who also purchased a deal, one stylist was at salon. The stylist takes the two girls and starts the consultations.  As the stylist starts their services, other customers start coming in. The stylist has the other customers wait and turns others away. Not good!

As the stylist is working on my daughter, my daughter feels as if the stylist is cutting corners and she didn’t even get everything that was advertised on the deal. When my daughter got home she was not happy with the service or the final product and will NEVER go back to that salon.

This is a perfect example of bad marketing. The salon owner had the right idea in offering their services at a good price but wasn’t providing what they had promised and subpar services. This promotion may have made them money in the short-term, but potentially may have signed their death sentence. Because now, the salon owner has created a scenario where they have aggravated potential new loyal customers and ruined any chances of repeat customers or referrals. Not to mention they have tainted their once good reputation.

Business and marketing is about the loyal customer. If you’re not offering your customer’s 110% of your resources all the time, don’t even bother! Without repeat business and a good reputation your business is dead before it even started. 

 

Tax Tip of the Week: IRS Declares War on Charitable Contributions

One of my clients recently was selected by the IRS to have his tax return audited because he had a higher than average contribution deduction on his tax return. This is not me just making an assumption – this is what the IRS auditor told me. To be accurate, she said, “We have been auditing a larger number of high donor tax returns lately.”

When this is combined with the IRS auditing more charitable organizations, what other conclusion can you reach? Why would the IRS declare on charitable contributions you ask? Well, my opinion is that “rich” taxpayers’ helping the less fortunate doesn’t fit with the extreme liberal agenda where BIG GOVERNMENT is responsible for taking care of all us. How dare we co-op the government’s job!

Whether my opinion is right or not is immaterial. If you deduct donations on your return be warned – you are now a target for an IRS audit.

So what should you do? Well you can just stop donating. But, this would be just giving in to the big bully. Instead, I would recommend that you continue (or even increase) your good work and donations. But, be prepared to prove your deductions. Check out some of our prior blog articles on how to document charitable donations and how to win if challenged by the IRS:

• Cash donations substantiation requirements (Link http://bit.ly/waHe7I )
• Noncash Donation Substantiation Rules (Link http://bit.ly/zSt9fE )
• How do I prove to the IRS that I really did make donations to Good Will (Link http://bit.ly/pgC9bk )

 

Like any good CPA, I need to add a disclaimer: unfortunately, it is impossible to offer comprehensive tax info over the internet, no matter how well researched or written. And remember, I love my readers but having me bookmarked on your computer doesn’t make you a client: before relying on any information given on this site, contact a tax professional to discuss your particular situation.

 

Client Questions - Can I Deduct My Spoiled Inventory?

Question: A florist called our office this week asking if she can deduct the cost of flowers that didn’t sell over Valentine. I get this question often from restaurant owners also.

Answer: Since flowers and food have a short shelve life, it is very rarely held in inventory. Normally the business owner deducts the cost of the flowers or food when they are purchased. Accordingly, they cannot be deducted again when they are thrown out.

Larger retailers, wholesalers or manufacturers who have an inventory on their tax return will get a deduction when they write items of inventory off as worthless.

Like any good CPA, I need to add a disclaimer: unfortunately, it is impossible to offer comprehensive tax info over the internet, no matter how well researched or written. And remember, I love my readers but having me bookmarked on your computer doesn’t make you a client: before relying on any information given on this site, contact a tax professional to discuss your particular situation.

 

What Would You Tell a Family With This Household Budget?

How would you counsel a family with the following household budget?

                Annual Income                                                                 $ 24,700

                Annual spending                                                              $ 37,900

                New credit card debt for the past year                          $ 13,300

                Existing credit card debt                                                  $ 153,500

                Recent spending cuts                                                     $ 385

You would probably tell them that they are close to bankruptcy. You would also probably tell them that they have to cut spending. Not just by the pretend amount of recent cuts they have made; but, with really, deep, meaningful cuts!        

Well this is every family’s share of the national budget and the national debt! (From a recent John Stossel Show.)

So, what will you be telling the politicians in this November’s election about our countries budget situation? Should they continue with more of the same and bankrupt the country or rein in our out-of-control spending now.

Better choose wisely! Your family’s future financial well being depends upon you making the right choice now!

(Start by educating yourself with a past blog – The Federal Deficit is Increasing by $237,823 per Minute! What Does That Mean to the Small Business Owner? (Link http://bit.ly/yRgdYs )

 

10 Surefire Ways to Make More Money and Keep it in the Bank!

Go to www.myprofitguru.com to listen to our free webinar that will show you the following 10 Surefire ways to make more money and keep it in the bank. This one hour webinar is jam packed with information that I have used over the last thirty plus years to help business owners increase their profits.

The following are the items I cover that I know can help you double or triple your profits this year:

1. See what the crowd is doing and do the opposite.
2. Focus your time on the work that increases profits, sales and cash flow.
3. Manage & improve every step of the sales cycle.
4. Increase sales to current customers.
5. Create a marketing system to get the big customer.
6. Speedup and improve all areas of the business transaction cycle.
7. Understanding & utilizing the most important rule of business.
8. Using 5 critical accounting numbers to increase profits, sales & cash flow.
9. Never totally trust your bookkeeper.
10. Be a lifetime learner.

At www.myprofitguru.com you will also receive a list with all legal business tax deductions (So you don’t ever miss a legal deduction again!), 65 tax cutting tips and a list of QuickBooks keyboard shortcuts.

Please let me know what you think of this free webinar.

Thank you for your continued support and let’s make this year our most profitable year ever!