3 Habits to Improve Productivity

Most business owners when they first start out are excited to be their own boss.  They’ll be their own best boss ever!  When in reality, they wind up being their own slave driver because they’re passionate about what they do, and that’s what it takes to get things done.  Those days, weeks or even months of burning the midnight oil can take it's toll on anyone, and could actually be diminishing your productivity.  Keeping healthy and reasonable habits amid your demanding lifestyle could help make the most of your efforts and keep you sane in the process.

1. The early bird really does get the worm.

     Staying up late to get work done may seem like a good idea, sometimes it seems easier to stay up later than wake up earlier.  However, not all 8 hour time blocks are created equal.  Staying up late creates more obstacles to productivity, even biological reasons, like your body producing melatonin once the sun goes down to make you sleepy.  Waking up early gives you the advantage of mental clarity and energy for your work day.  Staring at a computer screen in the dark, or even worse, taking work to bed with you, interrupts your work AND your sleep so you don’t get good results from either.  Your brain needs it’s rest and recuperation time to be able to handle tomorrow’s tasks.  Unapologetically enforce your own bedtime.

2.  Straighten out your goals before meeting others'.

     How often do you wake up to missed phone calls, urgent emails and even before your coffee is done brewing, you have already jumped into work like yesterday never ended?  Take a moment for yourself to get off the phone call/email treadmill.  Take 10 deep, slow breaths or heck, light a candle and mediate, whatever it takes to get you focused on the goals YOU want to achieve for the day.  It may seem too simple to matter, but taking a moment for yourself is stress relieving which helps you better handle the day ahead.  Focusing your energy on specific goals you set for yourself also helps drive your day more productively rather than just reacting to what’s going on around you.  Take the wheel.

3.  A healthy mind starts with a healthy body.

     Everyone hates this one.  But the simple fact is that exercise consistently keeps you feeling great physically and emotionally while boosting your energy level.  Yes, it’s hard to tear yourself away from work, but at least 30 minutes a day isn’t that big of a sacrifice for the payoff you reliably get.  It keeps you balanced and energized and your brain functioning at top capacity.  An added bonus, it will most likely help you know when bedtime is as well.  

     Incorporating these things into your daily routine might be difficult at first.  The temptation to fall back into your long but only partially productive hours can seem easier, but only because you’ve been practicing bad habits for too long.  Think of your new habits as an investment in your business.  If you’re not doing well, how will your business thrive?

     

New At Being Self Employed? Be Aware of Self-Employment Taxes

Did you just start your own business or become self-employed? First things first, I think congratulations is in order! However, there are many things to consider when you’re working for your self, one of them is of course taxes and more specifically self-employment tax. For those new to this concept there are a few things that you need to know, self-employment tax has been put in place to cover social security and medicare totaling 15.4% of your income earned for 2014. For previous years, the rate varies. Anyone who makes under $177,00 will pay this tax, however if your earning over that amount you’ll have to pay an additional .09% medicare tax on income earned. 

Something else to consider:

"You can deduct the employer-equivalent portion of your self-employment tax in figuring your adjusted gross income. This deduction only affects your income tax. It does not affect either your net earnings from self-employment or your self-employment tax." (From the IRS.gov website) 

Anyone earning over $400 must file for self employment tax unless you’re a Church Employee, in that case you must file if you earned over $108.28.

So you have set aside every month, or quarter, an amount that equals in what you owe in Self-Employment taxes, what do you do next? You'll need form 1040-ES in order to complete this process. 

No one said that being self-employed was easy but these are some of the things you need to be aware of when filing and preparing your taxes for this and next season.

For complete information about self-employment tax please visit the IRS.gov website by clicking here

Streamlining Your Business

Congratulations! Your business has made it another year.  Your effort was spent finding out what works, what doesn’t, what you can offer, what’s cost effective, how to handle bumps in the road, the right size staff for your budget and company, and the plethora of other things on your plate this past year.  Now it’s tax season and you’re stressing about everything you didn’t keep up with, record and document.  I’m sorry, its gonna be a doozy.  However! And there is a however.... The Silver lining is another year’s experience.  Whether that’s a tacky or blindly optimistic approach, now that you have the major kinks out of your plan and a few more things figured out, this year is the time to fine-tune your operation. 

Start with the Basics

Assess your bank.  One of the major things you have going for you as a small business owner is your cash.  Many entrepreneurs and people in general don’t have a clue how much they’re paying in service charges to the bank every month and exactly what they’re paying for.  Request an analysis statement that breaks down your generic monthly service charges.  You can then decide whether or not you need them, and if you can reduce costs in this area and take your savings and cash flow to the next level.  It might even be beneficial for you, if it’s within your budget, to request other services your bank may provide to keep your finances organized.  However, if you have taken the step to have someone else do your accounting for you, those services may already be rendered by him or her.  Banks are still business and don’t like losing clients, so small negotiations with your banker could have positive results.

Make a Comparison. It’s great that your company has grown and is continuing to, but do you know how your business stacks up to growth within the industry?  Before you do a whole lot of legwork, your accountant most likely has all the industry statistics and data comparison points on file that a lot of entrepreneurs aren’t taking advantage of.  Have these numbers available for your future strategy meetings and make your bench mark this year!

Automate It.

 

Be advanced.  Do you have small bills that stack up every month?  Instead of paying a $20 dollar monthly bill, pay $120 in advance for 6 months and save time paying all your little bills, not to mention saving money in stamps and accidental late fees!  The little bit of effort has a big payoff in stress and time management.  If your business has busy seasons and slow seasons, it’s a good idea to implement this tactic during the slow seasons when you have a little looser of a belt.  That way it’s already taken care of when your belt tightens again.

Use your (other) brain. Most likely your phone is a priceless asset in time management and helping you keep track of your company day to day.  What about month to month?  Save yourself the stress of remembering dates and funds or late invoices.  Do you have an accounting package that handles your bills?  Automate the process.  Your accounting software can generate invoices, send email alerts of late payment notices to your clients and handle electronic transfers (along with your bank).   

Keep it on Schedule.  Making a schedule for multiple employees can be a nightmare.  Did you know there are software packages that make scheduling less of a headache?  Asgard System's Time Tracker, TimeClock Scheduler and TimeCurve Scheduler among others, are a few software options that have to ability to track employee hours, alert you of any scheduling conflicts and even make payroll easier in some cases.  Some of these websites offer free trials as well.  You can spend more time building your clients than laboring over the schedule on a weekly basis.

Same Sex Couples May Want To File Tax Amendments in Virginia

The deadline for filing an amended Federal and State Tax Return for same sex marriage couples is this tax year.  The deadline is April 15, 2015.  Even if you currently live in a state where same sex marriage is not recognized you are still able to file a current and amended return if you were married in a state where it is.  Like any marriage, there are benefits and penalties for filing together.  You are not required to re-file but it may be wise to calculate whether or not filing an amended return for years 2011-2013 is worthwhile.
   
One reason to calculate the value of re-filing for previous years is if you and your spouse have a differential of incomes.  If you or your spouse don’t work, or make substantially less than your spouse, it is likely there will be a benefit.  However, if you and your spouse both work and have similar incomes, there may be a “marriage penalty” depending on the current tax rate.  Another reason to tabulate if you’d come out ahead with an amended return is if you had capital losses for the year.  Filing jointly may limit your deductions for those losses.
   
When filing an amended return, you need form 1040X for each year you’ve decided to re-file.  The key for filing an amended return is to provide as much documentation to the IRS as to the reason you are re-filing.  The more information you can give them the better.  Keep in mind that this rule does not apply for domestic partnerships or common law marriage. Again, the pending deadline for filing an amended status is April 15, 2015 if re-filing for year 2011. For information on filing an amended return, go to Tax Topic 308, Amended Returns, at http://www.irs.gov/taxtopics/tc308.html

Christmas Came Early - Know Your Tax Return Today!

Most people have a steady paycheck that they rely on, this can be true for many people along many different industries. A good tip that I offer my clients is to look to the past to know what will happen in the future. Taxes don’t really change much so as long as you have a consistent paycheck and your deductions are the same as last year’s then you should have a pretty good idea of what your tax return is going to be next year.

Have things changed since last year? Did you make any significant lifestyle changes such as: getting married, buying a house, retirement, new employment? If the answer is yes to any of those questions, then your taxes will be probably much different and you’ll need someone to help you ensure you are getting all the deductions needed.

Most simple taxes can be done and filed on your own, however if you have one of these big changes happening in your life you may to make sure that you have a tax accountant or an expert to ensure that you get the maximum deductions. Some people like to think that they can take shortcuts and save money by doing it themselves, however - hiring an expert can save you more. Sometimes covering way more, typically taking care of the fee you’re paying a tax consultant and also a bigger return.

Give A Little, Get A Little

As the end of the year approaches and we are in mid-holiday season, we may be in the giving spirit and even though we typically do this as a selfless act, it doesn’t mean we can’t benefit a little from it. Picking a charity and donating money or physical goods is always a great idea, however it may be smart to pick a charity that will provide a tax write off. This will be especially useful if this year has been a particularly good one for you or your business and you have a little bit to give away.

Charity Navigator shares some really great pointers when it comes to Tax Benefits to Giving:

• A gift to a qualified charitable organization may entitle you to a charitable contribution deduction against your income tax if you itemize deductions. 
• A contribution to a qualified charity is deductible in the year in which it is paid.
• Most, but not all, charitable organizations qualify for a charitable contribution deduction.
• There are limits to how much you can deduct, but they're very high.
• Rules exist for non-cash donations.
• Remember to document.

Not sure if the organization that you’re donating to is eligible? Here is a list of the places that may get you a tax deduction!

• Churches and other religious organizations;
• Tax exempt educational organizations;
• Tax exempt hospitals and certain medical research organizations;
• A government unit, such as a state or a political subdivision of a state;
• Publicly supported organizations such as a community chest;
• Certain private foundations that distribute all contributions they receive to public charities within two-and-a-half months after the end of the foundation's fiscal year;
• A private operating foundation which pools all of its donations in a common fund;
• Certain membership organizations that rely on the general public for more than a third of their contributions.

We’re always on the lookout for ways to improve the quality of life or friends and customers, but if you have any additional questions make sure to get in touch with Accounting Works!

If you’d like to read the full article by Charity Navigator click here

Accounting for the New Year

It’s the holiday season and everyone seems to be preoccupied with holiday parties, shopping and merriment all around; this is all great and I am probably one of the people that loves this season more than anyone else. However, tax season is not far from now, only a couple of months away if you really think about it. As a business owner or even as an individual how are your finances right now? Do you know where you stand as far as profits and losses for the year?

These are questions that you should be asking yourself right now, not next year. Once the fiscal year closes, it may be too hard to get tax write offs by making business related investments. If you have employees, you should make sure that you have all your numbers in order because you’ll be providing them with the right tax documentation so they can file in a timely manner. This is something that you should not be left as a last minute task, this needs to be present on your mind right now.

Zoho Books offers a great little cheat sheet for those who may need a little bit of a reminder on the things you’ll need to do before the year closes:

• Reconcile your bank accounts
• Complete your invoicing
• Record all your supplier bills
• Write off bad debts
• Get to the bottom and look for outliers
• Record your depreciation
• Handle prepaid expenses
• Close out the owner’s draw
• Get started with 1099s now

I know getting a lot of these things done before the end of the year can be a little bit overwhelming with the holidays being right around the corner but trust me on this one, you’ll be very happy that you got these done once tax season comes around.

To read the full article provided by Zoho Books, click here.

Saving for Retirement - A Guideline

One of the questions that comes to mind when dealing with clients is retirement. It doesn’t matter whether you are self-employed, work for someone or have your own business; you should  know how much money you will need for your retirement. Most people’s long term goal is not to retire when they are older but instead to retire at a young age. 

Most people will retire around the age of 65-67 so we will use that marker to explain how much money you should have saved by that time. 

We found a very useful graph from BenefitsPro that details some minimum mile marks for retirement based on one’s age. 

In order for this logic to make sense the following financial assumptions are being made: 

• Retirement age of 67
• Living until the age of 92
• 3% employer contribution, which would have to be adjusted if you’re self employed or own your own business
• 5.5% average annual portfolio growth rate

This is by no means an absolute saving solution for everyone because each person’s lifestyle varies greatly, but instead it should be used as a way to remind yourself whether you are on track to retirement. 

As always, we’re available for clients and anyone who has questions on how to run your finances as efficiently as possible whether you are a big or small business. 

-Stephen

(804) 915-7040

To read the full article from BenefitsPro click here  

Black Friday & Tax Deductions for Your Business

Black Friday is here, and with it a very crazy shopping season. You may be spending quite a bit of money on different gifts but one of the biggest selling categories during this season is electronic devices such as computers, tablets and smartphones.

When you are making your purchases this season, think of what are some of the things you could purchase for your office or work. Big ticket items like electronics, sometimes cost hundreds of dollars and could hold a tax write off. However, you need to be careful if you use these items for personal use since this could potentially get you in trouble with the IRS if you claim them as a deduction.

We found an excellent article by Entrepreneur magazine that details what consists personal use since this can sometimes be a gray area.

Some of the highlights from the article include:

"Tax Write-Off: Cell Phone Bill

If you use a cell phone as part of your business, this could be a big deduction for you. So don't make the mistake of mixing business with pleasure by sneaking too many personal calls onto your cell phone bill.


* Expert Opinion: "Because of the way a cell phone can be used, it's come under scrutiny, so people need to keep good records and keep their actual telephone bill so they can demonstrate that a majority of the calls were business calls,"

 * How to Do It Right: Take a look at your cell phone bill to make sure you receive an itemized report. Because cell phones are considered listed property, you need to keep detailed records of their use. In the case of a land line, it's a good idea to have a separate phone number for your business since the IRS won't let you allocate the cost of a single phone in your home to your home office.

Tax Write-Off: Home Office Computer


It's not a good idea to mix your business world with your personal life. So experts recommend never using your home office computer for personal tasks if you can help it.

* Expert Opinion: "If this is the only computer in your house, you'll have to calculate the percentage of total time you use it for business purposes,"

* How to Do It Right: Ideally, your best option is to purchase a laptop and dedicate it to being your personal computer. This way you can avoid any messy situations come audit time."

In other words, it’s never really a good idea to mix personal use of electronics when it comes to taking them as a tax deduction, but if you choose to get something with the intention of using it exclusively for work then by all means we encourage you to save some money this Black Friday and hopefully get a nice deduction once tax time comes around.


For more tips and tricks don’t forget to visit
www.AccountingWorksSolutions.com
or give us a call at
(804) 915-7040


To read the full article from Entrepreneur Magazine click here