Do You Owe Business Taxes to the IRS in September?

Business taxes and personal taxes are similar in some ways. But one major difference revolves around estimated tax payments to the IRS throughout the year.

When Are Estimated Taxes Due?

In general, small business owners and those who earn self-employment income are on the hook for paying estimated taxes. While you may be able to make these payments on an annual basis, they are traditionally due to Uncle Sam four times per year. The deadlines for estimated taxes fall on January 15th, April 15th, June 15th, and September 15th.

The September deadline is quickly approaching. This particular due date is for estimated tax payments for the third quarter of 2015, covering the beginning of June through the end of August.

Do I Owe Estimated Taxes?

The concept of estimated taxes harkens back to a keyword in this term – estimated. These estimated taxes are levied on small business owners, 1099 independent contract workers, and others who do not have taxes withheld from the income they earn. For that reason, these tax payments made to the IRS are more of an estimation of what a taxpayer would owe rather than a precise amount that would otherwise be withheld from a W-2 paycheck.

The basic group of taxpayers who owe estimated taxes includes those who have income outside of wages or salaries. This includes Schedule C self-employment income, as well as earnings from capital gains, interest, and dividends.

How Do I Make Estimated Tax Payments?

In order to file and pay estimated taxes on a quarterly basis, Form 1040-ES must be submitted to the IRS by each estimated tax deadline. Of course, any money you owe must also be included when filing this tax form.

If you owe estimated taxes this month, they should be in to the IRS on time. Otherwise, you may be required to pay a larger amount when April 15th rolls around. You could also be on the hook for late payment penalties. There are some options on making these quarterly payments all at once every year, but be sure to find out if such options would work for you, or if it makes more sense to pay them each quarter.

To handle your business taxes and other accounting needs, turn to the tax pros at 1-800Accountant. Call 1-800-222-6868 or check out www.1800accountant.com for details.

5 Tips on Running a Successful Franchise Business

Taking the plunge into your own business venture can be scary – even more than the best haunted house on Halloween night. But if you find an established brand that offers small business owners the opportunity to open a franchise under its name, a little bit of work has already been done for you from a branding standpoint. However, this doesn’t mean it’s that much easier to succeed.

So in honor of Franchise Appreciation Day this week, consider these 6 tips on running a franchise business that has a good chance of prospering in the future:

1. Thoroughly research the franchiser.

Before actually launching a new franchise business in your town, conduct thorough research on the business with which you plan to become a franchisee. This business is commonly called a franchiser. Determine the biggest selling points of the franchiser’s products or services. Learn about any current locations that are already open – and how successful those franchises have been. Get to know the top dog or CEO well, and get an in-depth lowdown on his or her plans for the company. The last thing you’d want to do is get into a bad situation, so do all possible research on your part to ensure you are diving headfirst into a desirable business environment.

2. Lean on your franchiser for support.

Many entrepreneurs and small business owners choose the franchise route because a business model is already in place for them and has been shown to work. With that said, don’t hesitate to lean on your franchiser for any support you need. That’s why they are there – and why they want others to open up shops like their original one.

Take advantage of all the resources provided by your franchiser. These may include pre-opening training courses, financing, technical support, marketing, and franchise consulting. These forms of support are not always available to entrepreneurs who start ventures themselves, so utilize them to the fullest extent.

3. Make networking a priority.

Regardless of your industry, franchise business owners should make every effort to be involved in networking. Join your city’s chamber of commerce, which should be an ardent supporter of all local businesses. Network with other entrepreneurs in your local area and industry. Make it a point to find other franchisees out there so you can get the scoop from them on how they’ve succeeded under an established company name. You may not feel comfortable talking with competitors, but there are so many business-minded professionals around you who can give you some tips and tricks for your franchise.

4. Ensure your business taxes and finances are in good working order.

No matter what type of business you operate, it’s critical to keep close tabs on your business taxes and finances. Make sure you file your corporate return on time if you own such an entity. Don’t forget about estimated tax payments, either. Finally, IRS business tax deductions can help reduce your business tax liability considerably. These include deducting startup costs, the vehicle deduction, the home office deduction, and the meals and entertainment deduction.

If a franchise business must pay royalties to a franchiser based on sales, these franchise fees should be deductible on your tax return. However, franchisees generally cannot write off initial franchise fees that are paid to become the franchisee of a business.

As for business finances, franchisers often require payments every month or quarter in the form of a specific percentage of gross revenue earned by the franchisee. Be sure to make these regular payments on time, and always give up the requested amount each time that you signed off on when setting up your franchise business. In addition, maintain solid bookkeeping and payroll records.

5. Remember that it’s all about the customer.

While the phrase “The customer is always right” applies in most scenarios, the philosophy that customers are the backbone of any business is 100% on point. This is why running a successful franchise involves taking good care of your customers. Getting repeat customers and referrals from those who like what you offer can serve as an integral source of revenue for your franchise. Make sure you handle all customer requests swiftly, and be sure all of your employees or contractors are trained to do the same since they may deal with customers more directly.

If you’re just an entrepreneur, or if you’re one of the millions of established small business owners out there, turn to 1-800Accountant for all of your business tax needs to ensure you stay compliant with the IRS. Call 1-800-222-6868 or check out the “Services” page on www.1800accountant.com.

Now We’re Talking: Tax Tips for Public Speakers

Public speaker

Photo credit: 123rf.com

Do you run your mouth – but in a professional way as a public speaker?

If so, we’d like to recognize all those who spread positive messages with the spoken word in honor of Professional Speakers Day. These tax tips for public speakers can save you money:

Consider establishing a formal business entity.

If your public speaking work is done under a sole proprietorship, consider setting up a formal business entity like an LLC, an S corp, or a C corp. Not only will this give you added credibility, but also it will open the door to more IRS tax savings. Plus, it can help you separate your personal and business finances and activities.

Don’t forget about estimated taxes.

You must file quarterly estimated taxes, whether your public speaking work is conducted as a 1099 independent contractor or is done under a formal business like an LLC, S corporation, or C corporation. Estimated tax deadlines are January 15th, April 15th, June 15th, and September 15th.

Carefully document the locations of your speaking engagements.

Keep close tabs on exactly where you are doing business as a public speaker. Traveling to different cities, states, and even countries can be a significant part of being a public speaker who talks to a variety of groups. In these cases, you might be on the hook for filing additional state income tax returns based on where you earn income as a speaker each year. If you travel abroad, there could be unique income tax requirements as well.

Save your receipts.

You might not have a huge mound of receipts piling up in your closet as a public speaker. But if you get receipts for any business expenses you incur to conduct your trade, be sure to document and save all of them. Receipts help small business owners provide to the IRS that they’re indeed eligible for business tax deductions on relevant expenses.

Use the vehicle deduction

Mileage for driving to speaking engagements can be one of the top expenses for public speakers who frequently travel by car.

Maintain a mileage log for your speaking-related business trips to fully document this information. You can claim either mileage (57.5 cents per mile) or actual expenses (gas, tolls, insurance, maintenance, etc.) as a write-off on your income tax return.

Claim other travel deductions.

Many professional speakers travel regionally, nationally, or even abroad. These trips can certainly take a bite out of your budget. You can deduct airfare, lodging, rental cars, cab fares, and any other expenses related to traveling in order to conduct your trade as a public speaker.

Claim any additional tax deductions for public speakers.

As a self-employed public speaker, you can write off a number of business expenses when filing your taxes. These include

  •  Office supplies, i.e. pens, pencils, paper, notebooks, scissors, stamps, paperclips
  • Equipment, i.e. desktop computers, laptops, tablets, cell phones, land lines, printers, fax machines, copy machines
  • Rent and utilities of a separate office space
  • Home office expenses, including power, water, Internet access, home phone service for business purposes
  • Meals and entertainment, i.e. restaurant bills, sporting events (only 50% deductible – and only when business is discussed before, during, or right after the meal or event)
  • Subscriptions to relevant publications for public speakers, i.e. magazines, journals, newsletters, online websites
  • Fees for accounting, legal, and other professional service providers
  • Marketing/advertising expenses

Handle “miscellaneous deductions” with care.

Avoid listing a significant amount of expenses under “miscellaneous deductions” on your income tax return. This could be a red flag that you do not have the proper documentation on file to prove these write-offs to the IRS.

more tax tips for public speakers – and for all other professions – by teaming up with the business accounting professionals at 1-800Accountant. Call 1-800-222-6868 or visit www.1800accountant.com.

Cutting Your Taxes: Tax Tips for Beauticians & Barbers

There are many tax tips for beauticians and barbers that can help you keep more money.

There are many tax tips for beauticians and barbers that can help you keep more money.

If you’re a beautician, hair stylist, or barber, you’re probably used to cutting hair on a daily basis. What you may not be an expert at is how to cut your taxes and keep more of your money. Consider these tax tips for beauticians and barbers to help reduce your next tax bill from Uncle Sam:

Consider setting up a formal legal entity for your business.

If you run Jodie’s Hair Salon, having a formal name is one thing. But you should consider establishing your salon as a formal legal entity, such as an LLC, S corporation, or C corporation. Business entities allow their owners to take advantage of more IRS business tax deductions, give them added credibility, and can also reduce the chances of an audit.

Claim all eligible tax deductions for beauticians & barbers.

As a self-employed professional in the beauty industry, you may be eligible to claim these deductions on business expenses when filing your return:

  • Property rental costs for your salon
  • Maintenance expenses for property, i.e. utilities, a cleaning service, structural repairs
  • Equipment, i.e. computers, cash registers, furniture, lighting fixtures, barber chairs, scissors, razors, hygiene supplies, hairdryers, window displays, office supplies
  • Cost of goods sold, i.e. hair care products, shampoo, conditioner, hair gel, hairspray, etc.
  • Employee salaries, insurance, retirement accounts, sick leave, vacation pay, awards, bonuses, etc.
  • Depreciation on property
  • Fees for accounting, legal, and other professional service providers
  • Property insurance, liability insurance, etc.
  • Marketing/advertising expenses to spread the word about your hairstyling services
  • Business gifts to customers (limited to $25 per recipient per year)

Remember that tips are considered taxable income.

Cash tips you receive from your customers are considered taxable and are subject to federal income taxes, along with Social Security and Medicare taxes. Tips are also subject to taxation through your state income tax – if you operate your business in a state with such a tax.

Account for property taxes.

If you operate a beauty salon or barber shop in a space that you’ve purchased, you are likely on the hook for property taxes. These taxes can take a big bite out of your budget, especially if you operate your salon in a high-traffic area or downtown in a major city.

Account for possible sales taxes.

Generally speaking, a service like a haircut is not considered taxable. However, if you sell hair care products like shampoo or hairspray, you’ll need to collect sales taxes from your customers who purchase these items from your business. Be aware of your local area’s sales tax rates. If you have multiple salons, these rates could vary by location.

Get more tax tips for beauticians and barbers – along with tax tips for all professions – by working with the accounting pros at 1-800Accountant. Call 1-800-222-6868 or check out the “Services” page on www.1800accountant.com.

Photo credit: The photograph included in this blog post is used with permission via the Flickr Creative Commons license.

What Kinds of Small Business Marketing Costs are Deductible?

Social media marketing is one of many types of marketing you can deduct as a small business owner.

Social media marketing is one of many types of marketing you can deduct as a small business owner.

Opening the doors to a new small business and spreading the word about it is not cheap. Fortunately, the IRS allows entrepreneurs to claim marketing expenses as a tax deduction when filing their taxes each year. No matter what type of startup venture or established company you operate, you should be able to deduct the following types of small business marketing expenses:

- Print advertising

Let’s say you run a small ad for your small business in your local daily newspaper. Maybe there’s an industry-related publication in which you buy ad space. Perhaps you print out marketing collateral or have business cards made to promote yourself. Whichever options you choose, you can write off print advertising costs as a tax deduction when filing your taxes with Uncle Sam.

- TV and radio commercials

Would you love to hear an excited narrator describe your startup venture in a booming radio voice? Want to see your products come to life via a television spot? These types of small business marketing can be costly, but they remain a very effective way to gain leads and make sales. The good news is that TV and radio advertising expenses are tax deductible. From production to buying ad time on a local or cable station, you can typically claim all of these related costs as a write-off for your business.

- Signage/billboards

If you have a retail location for your bike shop, you’ll probably need some signage on the exterior of your building with your company name and perhaps some other information. You could also have a marketing firm create a billboard ad for your company to be displayed on the side of the road. These types of marketing costs are also deductible.

- Internet/search engine marketing

The Internet is a fantastic 21st-century marketing tool. You may want a “.com” or “.mobi” website for your small business. You may choose to utilize Google AdWords or create banner ads on relevant sites as a way of driving traffic to your own website. Search engines like Google, Bing, and Yahoo offer other search engine marketing tools as well. Most forms of Internet marketing cost something, so you can deduct your online advertising costs since they’re considered a business expense.

- Social media marketing

Do you have a Facebook business page, a Twitter business account, or a LinkedIn business profile? Social media is an extremely effective and convenient way to reach your potential customers online, especially since everyone is browsing the web on every possible device these days. From Facebook ads to YouTube commercials that precede your favorite videos, social media marketing is a big industry. Thankfully, small business owners can write off these costs.

- Promotional events

If you haven’t officially launched yet, you may want to hold a “grand opening” for your new retail store or mom-and-pop restaurant. If you’re established, you may choose to hold events or attend trade shows to make others aware that you exist. Any expenses for promotional events you host or attend to get the word out about your small business are generally fully deductible.

Get more small business marketing and tax deduction tips through 1-800Accountant. Call 1-800-222-6868 or check out www.1800accountant.com.

Image credit: The image included in this blog post is used with permission via the Flickr Creative Commons license.

6 Essential Traits to Look for When Building a Small Business Team

Assembling a small business team is much like building a new house. You have to carefully handpick the materials you’ll need to maintain a successful enterprise over time. The following 7 traits are those you should look for when hiring individuals to join your team in hopes of attaining a prosperous future for your small business:

1. Self-motivated

Seek out those who are self-motivated. This means individuals who can get up each morning with an inner-drive and motivate themselves to work hard each day. We all get down on ourselves at times, which is normal, but adding those to your small business team who are already eager to do great things can be a big benefit.

2. Proactive

The term active is in the word proactive – and for good reason. Someone who is proactive is able to take the bull by the horns and get things done without being hindered by potential conflicts or stress. For example, if a problem pops up with the backend workings of a website, a web developer would immediately jump into action to get it resolved so that a company’s website would be fully functional again in no time. Proactive individuals can make the right decisions when necessary.

3. Innovative

Finding innovative thinkers is not always the easiest task. But hiring these types of professionals is critical to the ultimate success of your startup venture. An innovative thinker is one who thinks outside the box and comes up with unique and refreshing ideas to help a small business grow. Look how far innovative thinking took Steve Jobs in his career.

4. Adaptable

Running any small business or startup venture requires a great deal of adaptability on the part of the business owner. The same can be said for those he or she manages. People who are easily frustrated by change are not the ones you’d want in your business. Find candidates who have proven to be adaptable in prior positions, and inquire in your interviews about how they’ve dealt with change and the need to adapt. You never know what lies ahead on your business path, so being surrounded by individuals who can handle uncertainty is a must.

5. Reliable

Reliability may be the most important trait to be on the lookout for when assembling your staff. Find people who will get to work on time. Find people who will get their work done each day. There is no greater feeling than knowing you can rely on someone to get the job done within a certain timeframe.

6. Loyal

It’s hard to find loyal employees who will stick it out through the thick and thin. The good news is that there are loyal people out there. Do your best to identify and hire these types of workers. Focus on nabbing individuals who are looking to grow into a position and move up the ladder. If you can keep your best employees with you for several years, your chances of long-term success will go up significantly.

1-800Accountant is here for all of your small business accounting and consulting needs. To learn more about how we can help you put your business on a path to prosperity, call 1-800-222-6868 or visit www.1800accountant.com.