Vol. 13  No. 6 
June 2014 
Big Ideas for Small Business Newsletter
"The most difficult thing is the decision to act. The rest is merely tenacity."

~ Amelia Earhart (1897 - 1937), Aviation Pioneer and Author

 

Paying Your Taxes When You're Delinquent


Despite the best of intentions to make estimated taxes on time, deposit payroll taxes, and keep up with all required tax payments, it's all too easy to fall behind in tax payments when experiencing cash flow problems. The sooner you address the problem, the quicker you can get current, minimize interest and penalties, and re-establish your tax footing.  Here are some options.

Prioritize tax debts
If you owe back income taxes and payroll taxes, it's probably wise to address payroll taxes first. Unpaid trust fund taxes, which are those withheld from employees' wages, can result in a 100% penalty (called a Trust Fund Recovery Penalty assessment) against you or other owners and "responsible persons."  This personal penalty applies even though your business is incorporated or a limited liability company (LLC) that otherwise provides personal liability protection.

Request an in-business trust fund express installment agreement (IBTF-Express IA)
This is an installment plan to spread payments over a set number of months.

Keep Reading...


3 Ways to Never Worry About Cash Flow Again 
More than half of all microbusinesses routinely face cash flow struggles, according to a study from the Corporation for Enterprise Development (CFED). Some of the problem is because of lack of financial savvy; some is the result of inaction. If you routinely face cash flow challenges, you gain control over the situation with these 3 actions.  

1.  Create a savings fund
Unfortunately, 55% of microbusinesses (5 or fewer employees) don't have enough savings to pay for even one month of expenses. So building up savings is key to being able to stay ahead of cash flow demands.

Of course, creating a savings fund is easier said than done for many microbusiness owners. Here are some no-brainers to help:
  • Put any tax refund into the savings fund. The refund is essentially found money. Do the same with any other found money, such as rebates on purchases and bonuses or extra payments from customers.
  • Reduce expenses and add the savings to the fund. Eliminate a monthly bill and then pay that same amount into the fund. 
Keep Reading... 

Creating an Ethical Company 
Businesses have to follow the law and the law is black and white. Being ethical in business is a choice and the rules are often in the gray area. Understanding what it means to be ethical in business, and realizing the rewards, can start you on the road to establishing guidelines in your company.

What it means to be an ethical business
Take this example: A company sells bottled water and a devastating storm hits its area. People are desperate for water. If the company increases prices too much, it'll be in violation of laws against price gouging; this is a black-and-white area. But should the company take advantage of supply and demand and raise prices at all? This is an ethical question.

Sometimes it appears that it costs more to act ethically (e.g., foregoing potential profit from a small price increase as in the previous example can be costly). However, the contrary is true. Studies have shown that ethical companies are significantly more profitable (see e.g., Corpedia's Ethics Index for public companies). Think of the goodwill that the company in the example could engender by giving away its bottled water for free in the aftermath of the storm?

Keep Reading...

Our Readers Ask

Q:  I am self-employed and pay estimated taxes through EFTPS.gov; my husband does not work. We file a joint return. How will my payments be applied on our tax return?

A:  When you file jointly, IRS computers look at estimated tax payments only under the Social Security number of the first spouse listed on the return. Payments made under the Social Security number of the other spouse are not readily discernible. If your husband is listed first on the return, this may delay the receipt of any refund you're entitled to. Here are your options:
  • List yourself first on the return (there is no requirement that any particular spouse be listed first).
  • Change your EFTPS.gov account to reflect your husband's Social Security number and make your estimated tax payments under this number.
  • Continue to pay estimated taxes under your Social Security number but contact the IRS before you file your tax return and ask that your payments then be credited under your husband's Social Security number.
book_review

Book Review

 

Duct Tape Selling: Think Like a Marketer --
Sell Like a Superstar  
John Jantsch ~ Portfolio ~ Hardcover: $27.95
  

John Jantsch is a marketer extraordinaire who wrote Duct Tape Marketing, which revolutionized the how small businesses address their marketing activities. Now he's focused on selling and how to make it work in today's environment. His premise: Instead of having the salespeople try to close a deal, salespeople should be experts. When they become experts, they have more resources to offer and customers will flock to them. He explains how to create an expert platform, make connections, get referrals, and stay connected after the sale. The book is designed for salespeople to get them thinking like marketers.

The book is written in the first person, enabling John to share his tremendous insights into this important area of focus for small business owners.

Note: John is the subject of one chapter in my book, Smooth Failing.


 


In This Issue
Paying Your Taxes When You're Delinquent
3 Ways to Never Worry About Cash Flow Again
Creating an Ethical Company
Our Readers Ask
Featured Book Review
It's a Fact!

The Living Edition of Smooth Failing has grown! If you've already purchased a copy, be sure to get the update from Amazon now -- don't miss these compelling stories from industry leaders!



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It's a Fact!

Entrepreneurship: An Alternative Career Path for Recent Graduates? Some graduates opt to start a business because of a poor job market (although the job market is improving); others just want to do so. Only 53% of college graduates found jobs in their field of study last year. The increased number of entrepreneurship courses help create an alternative career path for some recent graduates.

Source:  


Pleased that my book, J.K. Lasser's Small Business Taxes 2014 was nominated for this award.  Many thanks for your votes and support!


Did You Know? 
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all my radio interviews on wsRadio.com.
Listen 24/7 to my conversations with small business owners & entrepreneurs to help you in your business today!

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