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"Being good in business is the most fascinating kind of art. Making money is art and working is art and good business is the best art."
~ Andy Warhol (1928-1987), Artist and Leader of the Pop Art Movement
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Win When You Lose
 It's a fact of business life that not every year is profitable.
While the lean ones present challenges on how to pay bills, retain employees, and stay afloat, from a tax perspective, there is a silver lining to these unprofitable periods.
You can use losses to save on taxes in your profitable years.
Here's how to do it.
Put net operating losses to work for you
Net operating losses (NOLs) aren't separate, additional loss deductions; they reflect the fact that deductions, expenses, and losses from the operation of your business exceed your business revenues.
Only individuals and C corporations can have net operating losses. Partnerships, limited liability companies, and S corporations don't have NOLs. Instead, the share of the business's losses is passed through to owners who compute NOLs on their personal returns.
Individuals have NOLs when adjusted gross income is a negative figure once itemized deductions or the standard deduction (but not personal exemptions) are taken into account. C corporations have NOLs when taxable income is a negative figure. Both individuals and corporations must run through specific calculations to determine the precise amount of an NOL, if any. This is because certain deductions allowed for regular tax purposes are not taken into account when figuring an NOL.
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Relocating Your Business -- Why and How
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State and local laws may play a big role in the challenges to your business. There may be taxes, workers' compensation costs, regulations, and other rules that burden your operations, sap your time, and deplete your net returns. Moving to a new state may be just the ticket to lighten your load and get back to doing what you love to do -- running your business to help your customers, clients, and patients.
Which state to choose?
Texas has an advertising campaign to lure current and would-be California business owners to the Lone Star State. Ads promote Texas' business-friendly climate of low taxes and few regulations, but Texas isn't the only business-friendly state.
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FMLA After 20 Years
| Yes, it's been that long since Congress passed the Family and Medical Leave Act (FMLA).
Is your business subject to it?
If you meet a 50-employee test, you are a "covered employer" subject to the federal FMLA rules. This means having 50 or more employees each working day during at least 20 calendar weeks in the current or preceding calendar year.
Being subject to the FMLA rules means that eligible employees (e.g., those who worked at least one year at your company) are entitled to:
- 12 workweeks of leave in a 12-month period for an employee to care for his or her newborn or a spouse or child with a serious health issue.
- 12 weeks of leave in a 12-month period to tend to a personal health issue or a qualifying "exigency" to care for a spouse, child, or parent as is considered a "covered active duty"
- 26 workweeks of leave in a 12-month period to care for a spouse, child, parent, or next of kin who is a service member with a serious injury or illness
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Our Readers Ask
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Q: I use a cell phone for business, but also make and receive personal calls. Can I deduct the full monthly service charges for this phone? ~ Harriet
A: You can write-off all of the costs of your monthly data plan if you meet certain tests. The monthly costs for employer-provided cell phones are fully deductible by the employer and not taxable to the employee as long as the smartphones are given to employees for substantial business reasons and not for compensatory purposes (e.g., to make required calls after business hours, to receive calls from customers and clients, etc.). The fact that there is personal use does not change the result, regardless of the amount of personal use. For self-employed individuals, it would appear that all of the monthly service costs are fully deductible if the phones are used for business purposes. Find out more about deducting the cost of cell phones here.
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Book Review
All In: How the Best Managers Create a Culture of Belief and Drive Big Results
Adrian Gostick and Chester Elton ~ Free Press ~ Hardcover $25.00
 From the bestselling authors of The Carrot Principle and The Orange Revolution, you'll learn how to get your staff to commit to your business. This means getting your employees to believe in your vision, adopt your principles, and work within a vibrant company culture to advance the business. The authors developed their seven-step road map for creating a culture that works from their extensive experience with Fortune 500 companies. The same action applies for small businesses. In fact, it may even be easier to implement the action plan in a small company: 1. Define your burning platform.
2. Create a customer focus.
3. Develop agility.
4. Share everything.
5. Partner with your talent.
6. Root for each other.
7. Establish clear accountability.
The book is easy to read and understand and, in my opinion, an essential tool for any company.
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It's a Fact!
Entrepreneurship on the Rise
About two-thirds of all colleges and universities now have an entrepreneurship course or program at the undergraduate or graduate level. Entrepreneurship is also creeping into secondary schools, in high-school classrooms and through programs such as Junior Achievement (more than 4 million students are in such programs annually).
Sources:
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Featured Podcast
from
Build Your Business Radio
You can listen here to my conversation with Small Business & Entrepreneurship Council's President, Karen Kerrigan,
as we discuss the SBE Council's recent report:
"10 Issues to Watch in 2013"
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A free online supplement, including the latest changes by Congress,
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