Tag: Small business

Eco Products That Are Tax Deductible

Eco Products That Are Tax Deductible

If you are wondering if eco products are tax deductible, maybe this will help you.

There are plenty of things that can help you save money if you go green. In 2011 you could write off home energy efficiency improvements. The tax credit was for 10 percent of how much you paid for the equipment and it could be up to $500 for asphalt or new metal roofs, energy efficient doors, retrofits that seal home air leaks, and skylights. For those who purchase a plug in hybrid or electric vehicle you could get a tax break. Also in 2011, if you purchased a Chevy Volt or Nissan LEAF you could’ve gotten a $7,500 tax credit.

Even if you did not make any purchases that were eco-friendly last year, you could’ve received deductions for donations you made to company’s like Goodwill or The Nature Conservancy. You can do this by keeping the donation receipt that the company gave to you. For instructions on filing for a tax credit or deduction you should look through the Internal Revenue Service’s guide to charitable contributions.

Nissan Leaf at the 2009 Tokyo Motor Show (LHD).
Nissan Leaf at the 2009 Tokyo Motor Show (LHD). (Photo credit: Wikipedia)

As for some of the things not covered by federal tax credit are: ceiling fans, dehumidifiers, ovens and ranges, refrigerators, toilets, window treatments, whole house fans, compact fluorescent light bulbs, light fixtures, programmable thermostats, and clothes washers and dryers.

So if you are interested in saving money this next tax season on eco-friendly products that you purchased, check the guidelines on the IRS website.

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10 Tax Tips For Small Businesses

Come tax time, owning a small business can be even more overwhelming than it normally is. Taxes can be confusing for any business owner, but may be more manageable if you keep these ten tips in mind.

  1. Keep a log of all of your business’ expenses. This can be a daily or weekly log, but it needs to be thorough. Detail the date of the expense, whom or what the money was paid to and the exact amount of money that was spent. Should you receive any confirmation numbers or other pertinent information in regards to an expense paid, be sure to attach it to your expense log so that it is easy to find come tax time.
  2. Know what you can and cannot deduct on your tax returns. Most small business owners end up losing money because they are not taking all of the deductions that they are legally allowed. A business owner can deduct for expected things such as home offices, travel time and insurance, but most don’t know that they can also claim deductions for things such as entertainment and meals. Be sure to keep receipts for your deductions as you will need to know the exact amounts that you have spent.
  3. Although deductions are great, be sure not to trap yourself. Try not to claim more in deductions that you actually earned as income in a tax year. This raises a red flag to the Internal Revenue Service (IRS) and may cause you to be audited. In the event that you are audited by the IRS, those receipts from the above will come in very handy.
  4. Save for retirement. Nobody wants to work his life away. You must earn income every year in order to qualify for a tax-deductive small business retirement plan.
  5. Don’t forget to save information about the equipment you buy for your business. A small business that spends less than 2 million on equipment may be eligible for up to $500,000 in deductions on that equipment. Repairs can also be tax-deductible on your return.
  6. Pay your payroll taxes. This may sound obvious, but many small business owners spend the taxes they withhold on payroll for other items for the business. This could leave you with a big bill come April 15. It is best to pay taxes quarterly.
  7. Look into health insurance credits. If you provide health insurance to your employees, you may be eligible for a tax credit. Check with a CPA for eligibility requirements.
  8. Hire a veteran. Veterans are in dire need of jobs and can benefit your business in many ways, including on your taxes. Certain veterans will allow you to be eligible for an expanded tax credit if you hire them during the tax season.
  9. Donate to charity. Not only is it a great community builder, it will benefit your tax return. Keep records of any non-cash items that you donate to charity. It will earn you extra tax credits with the IRS.
  10. Don’t be afraid to ask for help. If you are at all confused, it is best to call a professional CPA. It is better to pay for a CPA now than to mess up on your tax return and pay the IRS much more than the CPA would have cost.

Taxes don’t have to be confusing. Do some research and decide if it is more beneficial for you to prepare your return yourself or hire a professional. Either way, do not hide them in a corner and hope they go away as they will not!

[photo credit]

Michele Golden is a driven blogger and artiat from Vermont. Shes loves helping people save money, and make better decisions for their future. When she isn’t blogging shes studing to be a registered financial advisor or stock broker, whatever pays the bills.

End of Year Accounting Tips for Beginners

In 1752 the English New Year was moved from the end of March to the beginning of January.  Thankfully, the Georgian authorities saw fit to leave the Financial New Year where it was.  I love the 18th century Georgian authorities.  If it wasn’t for them I’d have to deal with the New Year Hangover and the Financial New Year Hangover at the same time.  Like many self-employed people, the end of the financial year, and tax return deadlines finds me in a bad mood, usually late at night with a large pot of coffee and tons of paperwork to spill it on.  When you’re self-employed the focus is on the day job – working to earn money and delight clients.  Paperwork can wait – but it can’t wait for ever.  There has to be an easier way and if, like me, you’re a persistent ‘deadline surfer’ the following might help.

Timing, Tools and Advice

  • Whether you like it or not, you have to make book-keeping a significant priority in your life.  The taxman demands up to date and accurate records and the fines for getting it wrong can be fatal.  So take note; get into a routine with your book keeping and accounting and stick to it.  Diary it into your schedule on a regular basis and stick to the diary.  Treat it as if it was work for a client.
  • There are several important dates in the financial year, make a note of them and keep an eye out for them as they come up.  If you don’t already fill in your tax returns online, register to do so now.  It’s going to become a requirement soon and the deadline for filling them in is currently a whole, delightful three months later than the paper deadline.
  • Accounting software or book keeping software is an investment that you won’t regret.  Double check with your accountant on systems they recommend and check that the cost falls under ‘allowable expenses’.  The accounting software available is usually simple to use and it takes nearly all of the hard work out of record keeping, allows you to keep centralized records, produce professional invoices and it will also cut the time your accountant needs to prepare accounts – saving you even more money.
  • Get help.  There are a vast number of free resources available to small businesses and the self-employed.  HMRC, for a start, are there to help and are more than willing to offer advice and support to new business.  Their role is to collect taxes not crush promising new enterprises who can generate those taxes.  In addition Business Link has specialist advisers and can offer access to courses or seminars to help in many different areas.

Accountancy tasks can be time consuming and for small businesses it’s a task that can take you or your staff away from the real business of making money.  Planning tasks carefully, knowing the key dates in the tax year, employing an accountant and making the most of accounting software will help to keep you feeling bright and fresh in the coming financial year.  You might even want to raise a glass to the memory of those enlightened authorities of the 18th century.

Neil blogs about small business and entrepreneurism, on everything from bookkeeping software to digital marketing.  When he’s not online he enjoys good food, cycling and painting.

 

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Republicans Repeal Tanning Business Tax

Legislation was recently introduced by a committee of House Republicans to repeal the ten percent tax on companies that provide tanning services. The tax, which was introduced under the President’s measures to reform health care, has been widely regarded as being unfair to small businesses.

Michael Grimm, a New York Republican pointed out that middle class Americans and small business owners should not have to pay the bills for Obama’s reform of health care. Grimm went on to say that the tanning tax is just one of several unfair taxes that affect both business owners and customers and ultimately the … Read the rest

Legislation was recently introduced by a committee of House Republicans to repeal the ten percent tax on companies that provide tanning services. The tax, which was introduced under the President’s measures to reform health care, has been widely regarded as being unfair to small businesses.

Michael Grimm, a New York Republican pointed out that middle class Americans and small business owners should not have to pay the bills for Obama’s reform of health care. Grimm went on to say that the tanning tax is just one of several unfair taxes that affect both business owners and customers and ultimately the overall economy.

The tanning tax could adversely affect up to 120,000 people employed by around 18,000 small businesses, points out Phil Roe, a Tennessee Republican. To make his point, Roe stated that just over 3,000 tanning businesses have closed since 2009, because of this tax – a number that represents 15 percent of the overall industry and accounts for 24,000 jobs.

The tax was introduced in July and since then has caused a dispute during debates on health care when discussing both taxes 2010 and 2009. President Obama signed the Act for Affordable Care and Patient Protection (PPACA)in 2010 and supporters of the tanning tax argue that filing business tax such as this helps pay for care under this act.

Repealing the tanning tax is encouraged by the Federation of Independent Business and the organization claims that the PPACA could get rid of 1.6 million jobs by 2014, around 30 percent of which are in small businesses.

401k Investors Want Help With Asset Allocation Strategies.

This article will focus on 401k plan participants expressed desire for help with asset allocation strategies; but, with a twist.

The author just finished reading a white paper prepared by ING Retirement Research Institute released on 3/31/2011. The title of the report is “Shedding Light on Retirement.” 2,600 401k plan participants were surveyed by the Boston Consulting Group on behalf of ING. One commentator took the report and proclaimed that the report indicated plan participants wanted help from their employers with asset allocation strategies. In fact 89% of the respondents said this was the help they wanted.

This is why I always prefer to read source material. Yes, the plan participants did say they wanted this help. However, in looking at the report, there were notable paradoxes in the responses. Specifically, 79% said they want control over how they invest; yet, over half stated they want more guidance, a roadmap, from their employer. In addition, 76% stated they want more investment choices; however, over half said they do not know how to achieve their retirement goals.

ING’s response to this survey was to create a website to help participants with education and offer personal contact, if they wish.

I suppose that is one solution. Perhaps another solution would be for employers to include professional 401k advisors for face-to-face, employee consultations. Survey participants seemed to suggest this is what they wanted; but, will such an offering by employers expose them to the Fiduciary Liability that they were so anxious to avoid when they terminated defined benefit plans?

Perhaps the responsibility is on the employee to realize they are truly on their own to find finance professional for themselves. Asset allocation strategies are not the only thing that 401k plan participants desire.  Many said they need help determining how much money they will need to take them through their retirement years and they also wanted help with an annual checkup to see if they are on track. Perhaps 401k advisors are the answer. The real question is how to deliver the service.

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