Top stories for you from Barbara this past month:

Retirement Accounts and the Unrelated Business Income Tax

It's perfectly legal for IRAs or 401(k)s to own your business. (I wrote an lengthy piece about this for the SBA.) Those who put the ownership of their companies within such a plan do so because this may be the only funding option they have to start a business. But just because your business' profits are collected by a retirement account which otherwise defers any tax on earnings until distributions are taken doesn't mean the profits are tax free. There's something called UBIT.
Spring Cleaning for Your Business

Now that Spring has arrived, it's a good time to clean house. This action can make you more efficient and save you money as well.

Work Opportunity Tax Credit: What's New

The work opportunity tax credit is a federal tax credit intended to encourage employers to hire workers from certain targeted groups. The credit had expired at the end of 2014, but was retroactively reinstated by the Protecting Americans from Tax Hikes (PATH) Act. The credit, which can provide significant tax savings for hiring certain workers, applies through 2019.

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Is Your Business Your Personal Pocketbook?

One of the first pieces of advice I give to those just starting a business is to separate your personal and business finances. Set up a separate business bank account and obtain a separate business credit card. Keeping your finances separate helps you better track your business activities and clarifies income and deductions for tax purposes. With that said, some business owners still have their companies pay their bills. What are the tax ramifications to this? Here are some tax cases to illustrate:
Revising Your Employee Handbook

Size doesn't matter when it comes to having an employee handbook. You don't have to be a big corporation to have one. Having any number of employees is reason enough to have an employee handbook. If you don't have one, it's probably a good idea to create one. If you already have one, it's advisable to update it now to reflect various changes in the workplace.
Now Is the Time to Think about Vacations


While it's early Spring, it's not too early to begin focusing on vacations for you and your employees. There's no law requiring you to offer paid time off, but most companies do for their full-time employees. Still, when it comes to vacations, those in the U.S. lag considerably behind their European counterparts where the minimum of four weeks paid leave is the norm. Here are some issues for you to think about as summertime, and vacation time, approach ...

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Thoughts about Your Cyber Security 

Not surprisingly, Verizon's 2015 Data Breach Investigations report found that data breaches continue to be prevalent and costly. The cost per breach is higher for small businesses than for large firms. For example, a breach of 1,000 records results in business losses of between $52,000 and $87,000 ($52 to $87 per record), while a breach of 10 million records triggers a loss of only $0.21 to $0.52 per record). Breaches in small firms don't necessarily result from sophisticated hackers; they occur when employees open phishing email that contains malware. 
Women-Owned Small Businesses and Federal Contracting 

With March being Women's History Month, it's an appropriate time to review what's going on with women-owned small businesses and federal contracting. To help women compete for lucrative government contracts (the U.S. government is the largest buyer in the world), the federal government is supposed to award a certain percentage to companies owned by women. Let's look at what the set asides goals are, who can qualify for them, and whether the government is living up to making its desired awards.
 
Do You Levy a 'Pink Tax'?

Do you charge more for women's products and services than you do for comparable men's products? Unfortunately, some companies do. According to a study by the NYC Department of Consumer Affairs, women pay 13% more for personal care items (e.g., the pink disposable razor versus the blue disposable razor), 8% more for adult clothing, and 7% more for toys and accessories. The study, titled From Cradle to Cane: The Cost of Being a Female Consumer, focused solely on product pricing, but what about services? What about haircuts for women versus men? What about dry cleaning a man's shirt versus a women's blouse?

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White-Collar Crime and Your Business

White-collar crime usually refers to any crimes that occur in the workplace, including employee theft and embezzlement (also referred to as occupational fraud) or owner/management fraud, bribery, money laundering, and tax evasion. You can't afford not to think about white collar crime and your business. The numbers are too big to ignore.

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J.K. Lasser's Small Business Taxes 2016

Yes, the deadlines are fast approaching! No worries - find the expert help you need in this edition, and stay informed of the latest changes in the FREE supplement found on my website. 

Why overpay on your small business taxes? The answers to your questions and practical tips to help you prepare your 2015 tax return are covered in this book. And, for year-round tax planning, you'll definitely want this helpful resource. 
Can or Should an IRA Own Your Business?

The basic idea is for the IRA or a qualified retirement plan to own the business and you own the IRA or qualified retirement plan, so you indirectly continue to own your business. Some do this because the arrangement offers financing for the business (funds within the IRA or other retirement plan buy the business). Some do this because of anticipated tax advantages. All risk having the arrangement challenged by the IRS and, if the IRS challenge is successful, very unfavorable tax consequences for the owner result. So how does this arrangement work, is it a good idea to use it, and what are the pitfalls to avoid?
The Small Business Health Tax Credit: An Allusive Measure that Needs to Be Changed

The Small Business Health Care Tax Credit was created by the Affordable Care Act (ACA) to encourage small employers to provide health coverage for employees. At the time of creation in 2010, it was expected that the credit could apply to 4 million small employers. According to a Government Accountability Office (GAO) report, about 181,000 small employers claimed the credit in 2014. This figure is lower than the number of employers claiming the credit in 2010. Is a credit a good idea? Does the current credit meet objectives? What can be done to improve the credit?
New Tax Expensing and Depreciation Rules

When you acquire an asset for your business that is expected to last for more than a year, you usually have to capitalize the cost. This means you put the asset on your balance sheet and then write off the cost over a certain number of years (fixed by law according to the nature of the item) by taking an annual depreciation allowance. This capitalization rule applies regardless of the cost of an item, so technically, if you buy a $10 handheld calculator, you can't automatically deduct the cost off the bat because the item is expected to last more than a year. However, there are several ways to accelerate your write-offs for most asset purchases.
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April, 2016 | Copyright ©Big Ideas for Small Business, Inc.