Vol. 13 No. 2

February 2014

"An organization's ability to learn, and to translate that learning into action rapidly, is the ultimate competitive advantage."

~ Jack Welch (b. 1935), American Business Executive,
Headed GE from 1981 to 2001

What You Need to Know about Employee Business Driving

In our mobile society,employees may get around by car, truck, or van on company business. They may use their own vehicle or one that's company-owned.

Driving on company business can raise liability issues as well as tax concerns.

Liability
You have no exposure for employee accidents that occur in personally-owned vehicles during the commute to and from work. However, if employees are driving company-owned vehicles during their commute, or if they use their personal or company vehicles for business driving, make sure you have adequate insurance coverage.

Also use background checks to determine whether all employees who will be driving for business purposes have a valid license and, if necessary, the proper license classification for the vehicle they will be driving.

Taxes
If you cover the cost of business driving, how you handle it affects employee compensation and employment taxes. Here are some scenarios:

Keep Reading...

3 Big Money Wasters: How to Avoid Them

You work too hard for your money to lose it to wasteful business issues that can be avoided or at least partially controlled. While there's no way to provide absolute protection, a good understanding of potential money wasters can help you take preventative action.

1. Tax audits
Tax audits by the IRS or your state tax authorities can drain you financially and emotionally. To address audit issues, you need to engage a tax professional (this costs money). You also need to spend time (yours or staff members') gathering paperwork, computer files, and other necessary documentation. The process can drag on, with interest and penalties accruing unless you have a favorable outcome.

What to do: The specter of an audit is always present, no matter how careful you are. Some actions that can help:

Document everything. If write-offs are questioned, you'll have the necessary proof.
Work with the best professionals. Spend the money for good tax advice. Going it alone to save money may, as the adage goes, be penny-wise but pound foolish. Don't use any tax professional who makes unreasonable promises or suggests you take questionable write-offs you know you aren't entitled to (such as personal meals) -- this can come back to haunt you. Note that the IRS is looking closely at tax preparers, and clients of those who are questioned may come under audit.
Learn the rules. Even if you work with professionals, you remain ultimately responsible for your taxes. Spend the time to learn about tax laws that impact you and your business. (My book, J.K. Lasser's Small Business Taxes 2014, provides year-round tax strategies and assistance with preparing 2013 returns.)

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5 Military Traits for Being Successful in Business

According to the SBA, 9% of all U.S. firms are veteran-owned, which is a substantial representation in the business world. Why are veterans so successful in business? Perhaps it's that their military training can be applied to business. Here is my take on the traits that serve veteran-owners well; non-veterans can emulate these characteristics to ensure success.

1. Leadership
Military personnel learn to make command decisions under pressure. They take control and exhibit confidence that inspires others to follow.

Leadership in the military is used within the context of a team; it is meant to foster teamwork. This view of leadership is helpful in business as well, where teams are used for such purposes as sales and innovation.

Keep Reading...

Our Readers Ask

Q: I've heard that I have to verify employees' Social Security numbers. Is this something I'm required to do?

A: Under federal law, you have to make sure that an employee is legally eligible to work in the United States. This is done by having an employee complete Form I-9.

You can use a service called E-Verify to make sure that the information provided by the employee is correct. E-Verify, run by the U.S. Department of Citizenship and Immigration Services, is voluntary, free, and web-based. Some states require you to use it when hiring. Check whether your state is one of them here.

Book Review

The Age of the Customer: Prepare for the Moment of Relevance

Jim Blasingame ~ SBN Books ~ Hardcover: $25.00

What does the age of the customer mean? That's what Jim Blasingame's new book is all about. It explains how we all need to become customer centric if we want to succeed in today's environment. Due to technology, customers now have access to information about us and our competitors. They have new expectations. We better be prepared to deal with this new reality. We better be able to build relationships, empower our customers and, most importantly, become and remain relevant!

After reading this book, you may never look at how you do business in the same way. With your eyes opened, you can now see how to engage customers and include your staff in the process. Most of all, it's an interesting and enjoyable read that will have you committing to memory Blasingame's Laws. One of my favorites: "In the Age of the Customer, the most important and relevant thing a Seller can do for Customers is to save them time."

A forward by Steve Forbes notes that Jim delivers tough love to small business owners who must learn to transition from the Age of the Seller, which existed when Forbes' grandfather launched his publication, Forbes, in 1917, to the Age of the Customer.

Note: I'm a long-time member of Jim's Brain Trust and consider him a friend, but my prejudice aside, this book is a necessary read for small business owners.

In This Issue

What You Need to Know about Employee Business Driving

3 Big Money Wasters: How to Avoid Them

5 Military Traits for Being Successful in Business

Our Readers Ask

Featured Book Review

Have you heard?
Two MORE brand new chapters will be added to The Living Edition of Smooth Failing! The updated version will be available on Amazon mid-February!
You won't want to miss these two new compelling stories and critical lessons learned from industry leaders.

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It's a Fact! Partnerships filed more than 3 million tax returns for 2011 (the most recent year for statistics), representing more than 24 million partners. Limited liability companies (LLCs) accounted for 64.3% of all partnership returns. Source: Statistics of Income Bulletin, Fall 2013

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Available on Amazon, this Self-Employment Guide offers valuable tax advice and helpful strategies you'll want to implement now.