Vol. 13  No. 3 
March  2014 
Big Ideas for Small Business Newsletter
"Honesty is the cornerstone of all success, without which confidence and ability to perform shall cease to exist."

~ Mary Kay Ash (1918 - 2001), Founder of Mary Kay Cosmetics 

Writing Off the Cost of Government Mandates for Small Business

Small businesses must take actions -- often costly -- to comply with federal, state, and local laws and regulations. Here is a roundup of when you can and cannot deduct the costs of compliance.

Providing safety equipment for employees
The Occupational Safety & Health Administration (OSHA) is a federal agency that seeks to provide workplace safety for employees. There are numerous rules that employers are required to follow.

For example, employers must provide personal safety equipment, such as gloves, face shields or goggles, and special shoes necessary for employees to perform their jobs safely. The cost of such equipment can be written off. You may be able to expense the cost (i.e., deduct the cost in full in the year the items are placed in service) or depreciate the items (the typical depreciation recovery period is seven years).

Environmental remediation
If you own your building and there has been contamination, such as asbestos, you must clean up or face EPA fines. Environmental remediation can be very costly. Whether the cost is deductible depends on what you're doing:
  • Restoring the property to pre-contamination condition. The costs likely will be currently deductible as a repair costs.
  • Improving the property by bringing it to new standards. In this situation you usually must capitalize the costs and recover them through depreciation.
Policies for Employees for Your Legal Protection
While there's no single way to completely protect yourself from legal challenges by employees and third parties, there are actions you can take to create some insulation above and beyond any insurance you may carry for protection. These policies may be included in your employee handbook.

Driving policies
Employees who drive their vehicles or company-owned vehicles for company business should be required to follow company policy about driving. Points to include in a company policy:
  • Maintaining valid licenses: Employees must report any changes (e.g., license suspension) to the company.
  • No distracted driving: No texting or calling while behind the wheel.  Many states have laws prohibiting these actions, but even without laws, you can make it company policy. Find details about distracted driving here.
  • No impaired driving -- period: No driving should be done when under the influence of alcohol or other drugs, including medications that can impair driving ability (labels on prescription and over-the-counter medications provide warnings).
  • Restrict the use of company-owned vehicles: Ban personal driving of company-owned vehicles, other than for commuting.
  • Reporting of vehicle incidences: Require immediate reporting of any accident or violation to the company, even if the employee drives his/her own vehicle.
5 Strategies for Mailing and Shipping     
The cost of a first-class stamp today is 49 cents; it was 37 cents 10 years ago. That's an increase of nearly 33%!

If you need to send information or items to customers or others, choose the best method for the purpose at hand. Here are 5 strategies to help you.

1.    Don't mail information.
Avoid the cost and hassle of mailing reports, contracts, invoices, and other "written" materials. This can be done more easily by computer or mobile devices.

Recognize that inked signatures are not necessary. The Electronic Signatures in Global and National Commerce Act (ESIGN), enacted in 2000, recognizes the validity of contracts signed electronically; states also have laws recognizing e-signed documents.

2.    Use scales and discounts.
If you must send something by mail, use a scale so you don't overpay for postage. For example, Stamps.com gives you a digital scale when you enroll in its program. You can then print out the exact postage required.

If you do direct mail, consider bulk mailing to obtain discounts. Find out whether bulk mail makes sense for you with information from the U.S. Postal Service.

Keep Reading...

Our Readers Ask

Q:   I'm self-employed. Can I use the standard per diem rates for deducting my T&E costs?

A: As a self-employed individual you cannot use the standard per diem rate covering lodging, meals, and incidental expenses; only the actual cost of lodging is deductible. However, you can use the per diem rate for deducting the cost of meals and incidental expenses (M&IE) for each day of business travel away from home. Federal per diem rates can be found here.

book_review

Book Review

 

 

The Economy of You: Discover Your Inner Entrepreneur and Recession-Proof Your Life 
Kimberly Palmer ~ AMACOM ~ Hardcover:  $21.95
  

Would-be entrepreneurs can get help and encouragement to take the plunge by reading this book. It helps you hone your ideas and test the waters before committing to starting a business (it lists 50 sideline gigs for employees who want to start their own businesses without giving up their day jobs). The book emphasizes the use of social media to make connections and find support. And it shows how to manage your time and rebound from failures that entrepreneurs encounter. Chapter take-aways help reinforce valuable lessons.

The author, Kim Palmer, the senior money editor at U.S. News & World Report, is also an entrepreneur (find her financial guides on Etsy.com). She's also my editor at U.S. News and I trust what she writes.
 
 

  


In This Issue
Writing Off the Cost of Government Mandates for Small Business
Policies for Employees for Your Legal Protection
5 Strategies for Mailing and Shipping
Our Readers Ask
Featured Book Review
It's a Fact!

Have you heard?
Two new chapters have been added to Smooth Failing! Find the updated version on Amazon now! 
You won't want to miss these compelling stories and critical lessons learned from industry leaders.


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It's a Fact!

Job Growth in Smaller Businesses

Companies with 1-19 employees had 56% of the job growth among small employers (which includes companies with up to 49 employees). However, small business payrolls rose by only 75,000; this accounted for 43% of employment gains across all payroll size groups.



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