Small Business Deductions

Taxes are predictable and enduring for most of us, especially business owners. For the small business owner, tax deductions are an advantage in reducing their tax burden, but accounting for these deductions must be precise and direct. Every owner of a small business hopes to make a profit; they will also owe taxes on their net business profits. But business owners who benefit from their deductible expenses can significantly lower their business taxes, including some business-pleasure perks that are legal tax deductions. These perks can range from the car you use for work to business travel, including meals and entertainment directly related to your business. In accounting for travel expenses, 50% of the cost is allowed as long as accurate records are kept on all your business entertainment expenses and your records must show how your expenses relate to your business. Family members are permitted on a business trip, but no deduction is allowed for anyone that is not part of the business team.

Tax laws change regularly, which makes accounting for legal tax benefits complex and difficult. Your deductions require expertise on current changes, guidelines and advice for your individual situation. A number of permissible tax deductions are available as business deductions if looked at closely. These deductions can yield even more savings on your tax liability if everyday deductions are considered.

Home-based businesses that have a home office may deduct a part of the real estate taxes paid on the home, including a portion of utilities, telephone and repairs for the office. If your business have employees, the following are accounted for as business expenses: wages, employee education, training and other employee benefits. In other cases, tax deductions for your small business include rent or lease payments, interest on business loans, real estate taxes on business property, state, local and foreign business income taxes and insurance for your business. Educational expenses required to maintain or improve the level of the present position you or your employees hold are valid business deductions, but educational expenses outside of your present position do not qualify.

Expenses for starting a business fall into two categories. Capital expenses, the cost of setting up a business and business expenses, the cost of running a business after the business is set up. Accounting for the cost of starting a business the first year is a limited deduction; remaining expenses are divided into a 15-year period. Newly started businesses usually don't realize a profit the first several years, so spreading your deductions over several years could balance any profits.

The cost of operating the car used for business purposes is a business expense and you may select one of two ways for accounting for the expenses, standard mileage, which is a limit of 48.05 cents per mile, or actual mileage by keeping precise records of miles driven for business. Tolls and parking fees are also permitted, including depreciation. However, if your car is used for business and pleasure, only the business part of these expenses is allowed.

Advertising or promoting your business and products is a valid business expense under certain conditions. The advertisement must be specific to the business and products you are sponsoring. Legal and professional fees can be accounted for in the year they are incurred, if they are related to that specific year. Expenses incurred in one year but are linked to future years, must be expanded over the related period. Unpaid charges may be recuperated as bad debts, but not all unpaid charges qualify as a tax deduction. For instance, time committed to servicing a client who failed to pay, is not a valid deduction. Interest and other charges on borrowed money used for your business is completely deductible, but your records must show that the money was used exclusively for your business.

Some expenses for business assets, such as new equipment can be entirely accounted for in the year purchased, under a certain IRS Code. However, not all assets qualify for this deduction. The depreciation of computers and software used in your business must be carried over 3 years, but there are some changes for tax-year 2008. The IRS Code that allows the entire cost of software in the year of purchase will no longer be available. The new rule states that the depreciation period for computers and software purchased together must be expanded over five years. However, the old rules still exist for computer systems that cost less than $112,000 in 2007. Contact the IRS for more information on this deduction.

Taxes are normally deductible when acquired for the operation of your business. Account for sales tax as part of the cost of items bought for business operations, but excise and fuel taxes are deducted separately. Employment taxes are paid by the employer and deducted as a business expense, self-employment tax is paid by individuals who are self-employed. Federal income tax is not deductible, however state income tax is deducted on your federal return as an itemized deduction and real estate tax on business property is deductible, along with local evaluation for repairs or maintenance. But, evaluations for improvements are deducted over a period of years. Moving expenses are not business expenses, but are valid under certain circumstances. The move must be directly connected to the business or the person's position in the business and the destination of the move must be 50 miles or more.

Owners of small businesses accounting for charitable contributions, except corporations taxed as partnerships, can enter these deductions on their individual tax returns. Old computers or office furniture with completed depreciation can be donated to charity, but no deduction is allowed.

The Small Business Owner

How quickly can your company get back to doing business after a tornado, fire, flood or computer crash? Every year, thousands of companies are unprepared. The US Department of Labor states that over 40% of small businesses that experience a disaster never reopen, and of the remaining companies, at least 25% will close within 2 years.

1. Continuity plans. Most business owners agree that having a plan is important, but too few take the steps to prepare. Plans vary according to each individual company's needs, but the basics are the same no matter the industry, size or location.

Identify what types of emergencies - from a temporary electrical outage to a large geographic catastrophe - could affect your company, the likelihood of each happening, and how they could affect your business. Then, with that in mind, determine your needs. Once this information is collected, it is easier to put a plan in place to help resume operations.

2. Determine your immediate needs. What data do you need the day after a disaster? Check with your IT provider on availability. Does your telephone service have emergency options to ensure you don't miss any phone calls? Have your customer, vendor and employee information readily available.

Can you run the business from a different location? Develop relationships with other companies so you can set up temporarily. Also, create a relationship with a competitor you trust who can meet your customers' needs short term. This will help you maintain your relationships with your customers even when you are not able to provide the product or service yourself.

Have back-up vendors and shippers in place in case your primary ones are disabled. Establish relationships in advance and maintain them. Place occasional orders so that they regard you as an active customer when you need them. Keep extras of hard-to-replace parts or supplies on hand and store them off site.

3. Information. Many companies store their important files in a safe or on an external hard drive in the office. If the building is damaged or items stolen, it is highly likely your data will be, too. Online backup is a safe, low-cost option. You can establish frequency of backup, which will allow you to resume doing business quickly.

4. Have adequate insurance coverage. Review your policy with your agent so you understand what is covered and what is not. Do you have Cash Value or Replacement Value coverage? Is this coverage on your building or contents or both? Do you have flood insurance? Should you? And don't forget about coverage for water backup of sewers, drains, or sump pump failure. Another area many business owners don't consider is Business Interruption Insurance. These are issues only you and your agent together can address.

In conjunction with your insurance policy, compile an asset inventory with photographic records and a written report. Knowing what you own, when the items were purchased and the cost will help reduce the process when filing your insurance claim because it will help you remember everything you owned. Even if you have adequate insurance coverage, most policies require a detailed list of what was lost, damaged or stolen. During the stress of recovering, you will most likely forget many items, and the time savings is imperative so you can begin rebuilding your business. Be sure to secure this information off site, and update the inventory annually.

Disaster may never strike, but if something does happen, having plans in place will help you through the transition and increase the odds that a temporary business interruption does not become a permanent one. According to the SBA, small businesses provide nearly 45% of the nation's payroll. A commitment to being prepared will support your employees, customers and the local economy.

Business Loans 101

For many small and medium scale companies cash-flow remains a perennial problem and it becomes seemingly difficult to manage operations without sufficient bank balance.For example the situation might become so tight that the company may not afford the employees salary for a month or two.If we look practically it is only for money that majority of people work for and they may have patience to a certain limit to continue working in the same organization if they are not paid salaries.But there is a possibility of good competent resource leaving the company if such situation arise. Business loans thus come here as the Saviour.

The company can mortgage the assets and take a loan to manage the temporary situation of cash flow crisis. But then the companies might wonder from where and how can they fetch money? Business loans can be taken for various cause.Firstly to acquire a property of their own. Instead of paying huge rent the company can take a loan to purchase a property and pay the monthly equated installment which would benefit them.

Business loans can also be taken for managing the working capital to smoothen the organization's expenses.The company may also like to borrow money for constructing or renovating the existing premise or for purchasing furniture or fixtures.Business loans can also be for flooring of inventory. Business loans are available for both small and large enterprises.Majority of small scale business operations avail a loan facility in a year or two after they have begun their operations.They still manage to survive the business to sustain their dreams.

Business loans can be acquired if the company does a proper planning of the company's mission.One needs to do a SWOT analysis of the company and then think if the loan taken is going to be justified or not.This would also help the competitors be away.One can apply loan as per their requirements and time for repayment.

One can go in for working capital loans of a certain amount and keep borrowing from that fund as per the requirements, so that they pay the interest component only for the loan amount borrowed and not the entire sanctioned loan. Business loans are thus a savior for non cash rich companies to keep their business moving on.

Working Capital Loan

To define a working capital loan in the simplest terms, one might say that it is a loan whose purpose is to finance everyday operations of a company. Anybody who has ever owned a business, or is running one currently, would know that a business often faces an urgent need of funds to keep operating smoothly. It may also find itself in need of funds in order to expand and grow. Under such circumstances, a working capital loan can be a veritable life saver.

A typical business falls into a need for cash for many reasons. It could be to purchase new equipment for your business or to expand the existing inventory by adding new items, or to open new branches and centers of operation at new locations (or to remodel or reconstruct existing ones), or to embark on advertising and promotional programs, or to pay off existing debts quickly. A working capital loan deftly takes care of all such financial needs. Simply put, for any business in need of some quick financing, a working capital loan is always an excellent option to consider.

Working capital loan is one of the two basic means of procuring emergency business funding. The other one is called business cash advance. Both these variants come with their share of pros and cons. One is well advised to look into the features of both and then decide on the best option for his business.

A working capital loan can be both secured and unsecured. A secured loan is one that is backed by an asset and/or personal guarantee. This asset can be a house, factory or inventory. Such loans can be fully paid up assets or assets with existing mortgages or loans. How much collateral the bank or financial institution will ask for depends very much on their assessment of your ability to pay back the loan. The bank may also require personal guarantees from the owners and/or directors. They must be ready and willing to put up their own personal assets to back the loan e.g. family home, shares and stocks.

Lenders give unsecured loans only to borrowers whom they consider to be low or no risk. Start-ups are generally viewed as risky and are unlikely to be granted unsecured loans.

As stated earlier, a working capital loan comes with its share of advantages and disadvantages. Among the main advantages is the fact that it is a great source of quick cash that can help a business tide over cyclical downturns. Working capital loans can be used to provide cash flow during short-term shocks e.g. when your key customer is declared bankrupt.

Among the disadvantages is the fact is that a working capital loan can only be used to meet a short-term cash need. These loans are generally insufficient for long-term plans or projects that require more capital (cash or asset). One also needs to monitor the loans closely and must ensure to repay them on time to avoid being blacklisted by credit bureaus and lending institutions.

Business Loans

When you are in a business world, the only thing static is the constant change. As is aptly said, the business world is all about dynamism. A businessman cannot afford to stay idle and relax thinking that his business is performing well and everything is under control. The moment this lethargy comes into the business minds, the die is cast for them and they are bound to fall sooner or later. The only solution lies in incremental efficiency when you are in a business.

A businessman must think ahead of his competitors; out of box ideas can take your business on a higher altitude. To keep any business updated with the latest trends and developments in the market, a lot of research and development is needed. With these requirements larger in an established business, it is important that financial experts suggest you the concept of ‘ploughing back the profits.’ This concept, if followed, can create a healthy reserve over a period of time that can be used for further diversification or expansion of the business.

All businesses, however, cannot afford to plough back the profits for various reasons. If the business concerned is relatively new, it may become tough to keep profits in reserve and not distribute among the entitled persons. A new business has to balance several equations when it comes to operational front. A body corporate that is fundamentally strong can always reap the benefits of big reserves in difficult times. Most entrepreneurs resort to business loans when funds for diversification of the business are needed. You have to be a good negotiator if you are aiming for low rate commercial loans for your new business projects.

The loan market anywhere in the world adopts more or less the same principles when it comes to lending money. Your credit standing in the market, business goodwill and repaying capability are some of the factors that are taken into account by the lenders. Low rate commercial loans allow businessmen an opportunity to diversify and grow - a phenomenon that starts with a strong will and enterprising attitude.

For an established business concern, expanding the line of business is easy. The related products and services can be explored and worked upon. The expertise is already there and you just have to put some more efforts to expand your business horizons. The monetary requirements may come from the reserves and surpluses created in the normal course of business or the business loans available in the market.

Equipment Financing

Forestry and agricultural equipment financing is essential to buy land clearing equipments, mill equipments and other equipments. Agriculture and forestry largely depends upon heavy equipments in order to accomplish the related tasks easily. These equipments are generally expensive and hence require forestry and agricultural equipment financing.

Equipment purchasing is a normal practice in the field of agriculture and forestry since these equipments ensure completing the tasks without any interruptions. For instance, cutting the tree efficiently is impossible without the truck. Similarly it is obvious to use a tractor in the farm work. Therefore forestry and agricultural equipment financing is required to buy the essential equipments.

There are varieties of loan options provided by some reliable financing companies. The forestry and agricultural equipment financing is categorized as farm equipment financing, landscape equipment financing and other agricultural equipment financing.

Farm equipments vary from farm to farm according to the size and type of the farm. For instance equipments used in dairy farm may not be useful in a grain farm. There are various types of farm equipments which are useful in harvesting, threshing and cleaning the grains. Similarly there are equipments like Hay bailer which is used to compress grains in round or rectangular bales. These equipments are quit expensive and so forestry and agricultural equipment financing is required to get such equipments. Some legitimate financing companies offer low interest rate financial assistance for these purposes.

Tractors, power tiller, Ploughing equipment, planting equipments are often essential in agricultural field. Agricultural farms are using mechanized equipments nowadays for accomplishing the farm works faster and deeper. Since these equipments are indispensable for modern agriculture. The genuine financing companies would help you get such forestry and agricultural equipment financing that lets you buy all the necessary for your farm.

Landscape companies require large mowers and other equipments like edging equipment, mulching equipment, turf maintenance equipment, irrigation system like sprinkler system, drip system and so on. These equipments are vitally important for smooth operation of landscape companies. However these equipments represent a costly investment. There would be difficulty in getting financial assistance from some financing companies. Yet there are some good financing companies which can provide you financial help at lower interest rate to buy the essential landscape equipments. There would be embarrassing procedures and delayed responses. You can get the forestry and agricultural equipment financing immediately after applying for the loan provided you have the minimum qualifications to obtain the loan.

Apart from the normal agricultural and forestry equipments, there is some equipment that is in special in nature. These equipments help in improving agricultural and forestry field. For instance, automated milking machines help speeding up the milking process. However these equipments are not cheap and so they would not be used by an average farmer. But Forestry and agricultural equipment financing helps those people to buy the necessary equipments that help them provide steady improvements in their farm works.

There are yet some special types of equipment like food processing equipment, dairy machinery equipment and so on. You can get financial help from reliable companies by simply filling the online application form provided by such companies.

Get Wings For Your Creative Ventures

Innovation is the name of the game when it comes to the commercial field. Setting up a business and being successful requires conviction in oneself. If you too have some innovative idea that you want to give shape to but are lacking the finance, you can take up small business loans to assist you in your feat.

The borrowers who are interest in setting up a new venture may like to put their idea into practice without putting any of their assets into risk. So for this, these loans seem to be the perfect idea. Since these loans involve small amounts, there is no requirement for the borrowers to pledge any assets with the lenders. This would mean a completely no risk situation for the borrower and thereby be very suitable.

Through these loans, the borrowers can take up money for any purposes that arise in the business of the borrowers. any needs like payment of labor, packaging of finished goods, getting raw materials, purchase of new machines etc can all be fulfilled with the money that is borrowed through these loans.

The borrowers while taking up these loans should rather research well for the lenders of these loans. It is very important to determine the reputation of the lender as there should be no problem in the way of the business of the borrower. Also, this research can help the borrower in getting lower rate deals as there are numerous lenders in the market who are ready to lower their rates.

The borrowers with adverse credit can also take up these loans for their needs easily. The rates that are charged for them on the borrowed money are higher than usual but it is still worth taking up the loans as there is a great chance to restore your good credit by timely repayment. Moreover low rate deals can be researched for easily through the online mode.

With small business loans, the borrowers can get money for their plans and aspirations easily. No collateral is required for the money and bad credit is also not an obstruction.

Starting your own business

Starting your own business

About two years ago, my husband and I decided to research what starting your own business would be like. He knew his industry and area of expertise incredibly well and we had known several people who successfully started their own businesses and loved it. Starting your own business sounded like a great idea and something that we figured we could accomplish. My parents advised us to slow down and think before we got in over our heads or signed on any dotted lines. We figured, we were grown up and knew what we were doing. Afterall, I had just turned 30 years old - I was capable of knowing what starting your own business would entail. Now that I look back, I realize that I should have listened to my parents when they gave out advice on starting your own business. I would still have supported my husband 100% but we definitely would have done some things incredibly differently.

Starting your own business isn't just a decision that you make overnight. Trust me on that fact and don't let anyone tell you otherwise. You need to realize that starting your own business will affect your life in every way possible and could really dampen your personal financial situation greatly for the first few years. I never thought about the fact that starting your own business doesn't mean that the profits are going to start rolling in. In fact, even if your starting your own business starts off as a huge success, that doesn't mean that you can even touch your profits right away. There are so many more expenses involved in starting your own business than I would have ever guessed. While the profits were steadily moving in for us starting on the first day, our business loan and overextended credit needed to be taken care of first. We had many people tell us that starting your own business usually means that for the first several years, there really isn't a profit. We laughed at that thought and just
assumed that people were trying to discourage us. It is now two years later and while our business is successful, it isn't always easy to pay yourself. The bills and loans need to be paid first.

When starting your own business, get some professional advice. Talk to someone who knows what starting your own business is about. Perhaps that would be a family member or a professional - someone can help you know all the ins and outs of starting your own business. It isn't as easy as it sounds. Starting your own business is terrifying and rewarding. Make sure that in starting your own business, you have an excellent business plan whether you're trying to borrow money or not. Having a business plan helps you figure out what your goals are when starting your own business. You should also know what amount of money will be needed when starting your own business. We underestimated greatly and ended up putting entirely too much on our personal credit cards. That's a terrible idea when starting your own business. Think ahead.