Vol. 13  No. 12   
December 2014 
Big Ideas for Small Business Newsletter

"Some people regard private enterprise as a predatory tiger to be shot. Others look on it as a cow they can milk. Not enough people see it as a healthy horse, pulling a sturdy wagon."

~ Winston Churchill (1987-1965), British Statesman, Historian, and Artist


Your Annual Meeting    
If you are incorporated (whether a C or S corporation), you are required by state law to hold an annual meeting. While there's no government penalty for not doing this, it can cost you personal liability protection; if the corporation is sued, a creditor can "pierce the corporate veil" on the grounds you haven't respected the corporate entity, providing them with an opening to collect against your personal assets. Beyond this, however, it is a good business practice to hold an annual meeting so you can review your current situation and adopt measures for the coming year.

The following information will help you understand why you should have a meeting before the end of the year, how to do it, and what to cover. (This content is adapted from my book J.K. Lasser's Small Business Taxes 2015.)

Why and how to hold an annual meeting
In order for a corporation to take certain action, it must be approved by the board of directors. The board members may be the same people who currently act as officers. For example, if you are the sole shareholder, you may be the president (and/or CEO) of the business as well as a board member. Check state law to determine how many board members are required and who can serve.

Keep Reading...

 

Your Paperwork and Health Coverage  


Whether or not you're required by the Affordable Care Act (ACA) to provide health coverage to employees, most small businesses want to do so, and many find a way to offer a company medical plan. Having a plan means paperwork. Be sure that you do the necessary paperwork to stay in compliance with ACA requirements as well as other federal laws.

The following information was provided by Victoria Braden of Braden Benefit Strategies in Atlanta, Georgia. It is not a complete list, but it covers the essentials.

Group health plans
Under ACA you must provide to employees and/or the government (depending on the notice requirements) all of the following that apply to your situation:
  • Summary plan description (including lifetime maximums, annual coverage limits, and extended coverage for children under age 27)
  • Summary of material modifications to the plan
  • Coverage information (creditable coverage, special enrollment periods, eligibility, and qualifying events)
  • Exchange (federal or state marketplace) notification
Keep Reading...


Considerations in Employing Seniors    
For many seniors, golf and travel take a back seat to work. The Administration on Aging found that as of 2012 18.5% of those age 65 and older were still working or actively seeking employment (full or part time), compared with 12% of this age group in 1990. What's more, last year one poll found that 82% of those 50 and older expect to be working during retirement years.

These stats are a great boon to employers who can utilize this seasoned workforce (many large companies, such as Home Depot and Walmart, attend 50+ job fairs), but there are also traps to be aware of.

Skills and experience
The benefits to a company in employing seniors are numerous:
  • Skills and experience
  • Work ethic and company loyalty
  • Customer identification (customers seeing themselves through a company's staff) and workers' ability to better understand customer need
  • Ability to mentor younger workers
Keep Reading...

It's a Fact!

Partnership Returns Are Up

The number of these returns filed in 2011 was up by 1.1%, and there was a 24.7% increase in the number of partnership returns filed electronically.

LLCs accounted for 64.3% of the total partnership returns filed that year. The real estate and rental and leasing sectors accounted for 48.6% of all partnership returns and 31.4% of all partners.

Source: IRS

 

Our Readers Ask

Q: I set up a SIMPLE-IRA for my corporation. Are the contributions to my account taken as a payroll deduction or do I make them from my personal assets?

A: In the case of a corporation, the contributions are salary reduction amounts withheld from your pay. You are not taxed on this deferral amount; the corporation's matching contribution is deductible by the corporation.

In the case of an unincorporated business, owners do not receive a salary; they make their contributions (what would be the employee and employer shares) from their own resources. They can deduct their contributions as a personal deduction in the Adjusted Gross Income section on page one of Form 1040.

For more information about SIMPLE-IRAs, see IRS Publication 560 (which has not been updated since 2013) and my book J.K. Lasser's Small Business Taxes.

book_review

Book Review

 

Think Agile: How Smart Entrepreneurs Adapt in Order to Succeed
Taffy Williams ~ AMACOM ~ Hardcover: $23.00

Because of the continuing flood of technological breakthroughs and other changes, today's entrepreneur must continually adapt in order to survive.

The first part of the book explains why being agile is essential in today's environment and shows you how to assess your agility. The second part of the book shows you how to increase your agility by becoming more innovative and willing to experiment. For example, there's a brief test to show you whether you have a rigid or agile mindset when it comes to your financial options.

One of my favorite chapters covers repurposing products, services, and people so you can use what you have in new ways to meet the demands of a changing world. (The author, who has a Ph.D. in chemistry, repurposed himself into a career in business management.)

In This Issue
Your Annual Meeting
Your Paperwork and Health Coverage
Considerations in Employing Seniors
It's a Fact!
Our Readers Ask
Featured Book Review




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Listen anytime and hear interviews with key small business owners and exceptional entrepreneurs to help you in your business today!
Here's a link to my recent radio conversations with the SBA's National Ombudsman, Brian Castro, and with Giovanni Coratolo, V.P., Small Business Policy for the U.S. Chamber of Commerce.
 



Barbara's Books

This updated book, which has been in publication for 20 years, is geared for year-round tax planning as well as for preparing 2014 tax returns.


Celebrating its 11th edition, this book is for individuals who want to maximize their deductions, credits, and other tax-saving opportunities on 2014 income tax returns.

Important: Both of my books include a free online supplement that will explain last-minute Congressional action on favorable rules that expired at the end of 2013 and whether they apply for 2014 returns.