The future of the ACA
The future of the ACA (sometimes called "Obama Care") is an open question, so paying close attention to new health legislation is paramount. You must pay attention to running your own company or caring for your own family. Let a Certified Public Accountant who's well equipped to follow and understand these changes, help you keep track of it all.
I have had the opportunity to work with one such CPA, Tanya Higginbotham, who is the Managing Member of Accountability Team LLC.
Recently mentioned on the Accountability Team LLC website is the importance of meeting the individual mandate, keeping good records of your coverage, and careful preparation of your taxes in light of any ACA compliance issues.
The ACA has caused some confusion. Each year since it passed, clients are "surprised" to find that they have to pay a penalty for not having insurance that complies with the ACA. Also, anyone on a subsidized Obama Care health plan may have to pay back some or all of their premiums if their family income increased from bonuses, raises, new jobs and the like. When these increases happen, the taxpayer may have to repay some or all of the ACA subsidy.
This work in reverse too. If your family suffers a job loss or other reduction in income, and you don't contact the marketplace to increase your subsidy, you may be entitled to pay less taxes, or even get a larger refund.
The Employer Mandate Might Not Apply to Small Businesses
If you have less than 50 Full Time or Full Time Equivalent (FTE) employees, you won't be required to provide coverage for your employees. If you have a fluctuating workforce, and your numbers draw near to 50, pay close attention and keep good records. There is a formula that determines if certain non-full time hours add up to additional FTEs. Trust your CPA to get this right.
If you have less than 25 employees making less than $50,000 and you pay at least 50% of their premium through the SHOP marketplace, you could get a tax credit.
For a more detailed look at this topic, visit Affordable Care Act – Obama Care on Tanya's Accountability Team LLC website.
When you're ready to prepare your taxes, or make plans for next tax season, give her a call at 813-689-6413
Choose a business structure
One of the first things that must be considered when starting a business is what type of entity that business will be. This decision will have an impact on your personal and business taxes and the liability that you and your company have for each other's debts and judgments.
Only corporations and LLCs can chose to have the IRS treat them as S-Corps. An S-Corp allows the profit of the company to pass through to the owner, but any owner who actually does valuable work for the company must pay self employment tax on the portion of their pay that is a direct result of their labor. This must be a "reasonable salary".
As the owner of TecBrat.com LLC, I have the pleasure of working with Business Coach, Cynthia Alloway, of Common Sense Business Solutions.
In addition to helping you to grow as a professional and teaching you to make good business decisions, Cynthia can help you identify and avoid scams that might cost you some of your hard earned profits.
Here are just a few of the scams we've seen over the years:
Labor Law Compliance Posters
There are federal and state requirements for displaying labor law notices. There are posters that conveniently combine all the right notices for your location, and update every year. You are not required to purchase these posters. You can print your own from the various municipal websites, and some payroll companies will offer them for free as a convenience to their customers. Don't be tricked into paying high fees for something you can get for free.
Corporate Minutes Compliance letter
At lease two companies. "Compliance Services" and "Corporate Records Service", have been attempting to fool small business owners in Florida into paying $125.00 to $250.00 to file their corporate minutes. The mailing is made to look like an official state document. Corporations are required to keep minutes of their annual meeting, but there is no requirement in Florida to file these minutes. This is likely an attempt to confuse business owners because there is an "Annual Report" that must be filed, but it's rather simple and can be done at sunbiz.org.
Domain Name Trickery
Modern businesses rely on their websites. One of the first things we have to do for a website is to register a domain name. Domain registrations must be renewed, either every year, or every few years, depending on the length of the original registration. When the domain is nearing expiration, this information is publicly available and the scammers will send a "renewal" letter. They'd like you to think it's your current registrar and your just renewing, but you'd actually be switching from your current registrar to them. Be sure to read your renewal notices carefully.
Domain Name Trickery 2
Do you really need a .cn or .asia domain name? You may receive an email claiming to be from a Chinese domain registry asking if it's okay for some other company to register a domain name similar to yours, but with ".cn" or ".asia" at the end. It starts out like you are being given an opportunity to prevent this. It then turns out that the only way you can prevent it is if you register the names yourself, at great cost to you. You can safely ignore these emails. If you have a real need for a ".cn" or ".asia" domain, check with your registrar, technology specialist or business coach to ensure you purchase them from a reputable registrar.
Domain Name Trickery 3
Extra TLDs. By now, we've all seen ".com", ".net" and ".org" domain names. These suffixes are called the "top level domain" or "TLD". For most industries, ".com" is the only one that matters. You might choose to register ".net" just to prevent others from using it, and if you run a non-profit, you might consider the ".org". But, the scam is that someone will send you a letter that looks very much like a renewal notice, but it's actually an offer to sell you your domain name, but with a different TLD. These "offers" are usually at greatly inflated prices. Like I said about the Chinese domains, if you have a real need for an additional TLD, ask your business coach or technical advisor.
Cynthia has been helping businesses for over 20 years, so she is familiar with these and other ways that disreputable individuals and companies will try to separate you from your cash. If something looks like a scam, it probably is. If you're not sure, ask Cynthia.
If you run a small business, you might ask yourself if you really need to hire a CPA.
The first thing many people think of when it comes to CPA services is tax preparation. It's important to know that while anyone can act as an accountant, even someone without so much as a high school diploma or GED. A Certified Public Accountant is one who has completed thorough training and passed a rigorous state exam to ensure they are qualified to serve you according to skill and knowledge. CPA's are required to complete 80 hours of Continuing Education Units (CEU's) every two years in order to maintain their license. The 80 hours must include 20 hours of accounting and auditing, 4 hours of a Board approved ethics course, and no more than 20 hours in behavioral subjects.. They know how to minimize your likelihood of being audited, have the experience to deal with an audit, and are able to represent you directly to the IRS. A non-licensed accountant, even one with a PTIN, has limited practice rights.
Beyond tax season, a CPA knows business. A CPA knows finance.
A bookkeeper and an accountant can keep your accounts straight, and let you know if you're profitable or not, but a CPA can analyze your records, identify excessive costs and opportunities for increased profit, and in general help you make better financial decisions based on years of study, experience and understanding.
I can't tell you that your small business absolutely must hire a CPA, but I can tell you that there are reasons to give it your serious consideration.
If you are running a small business or large international corporation, profits are a direct indicator of the health of that business. It is, therefore, essential that you are maximizing your profits where possible. This is where a business coach can help you uncover areas where you can either increase revenue or decrease expenses, both of which have a direct impact on profitability. We will now take a closer look at these two important aspects of profitability.
Let’s start with increasing revenues and there are a few approaches to doing this. A business coach can help your business in any of these areas.
We will now look at the other impact on profitability, decreasing expenses. Again a business coach would be invaluable in any of these areas. There are many ways to decrease expenses, but we have narrowed them down to a few important areas as shown below.
The above strategies have an immediate impact on your bottom line, but there is another area you should look at when trying to maximize profits and that is Outsourcing. Human resources are probably the biggest expenditure for any business. There are certain tasks that can be easily outsourced for a fraction of the cost of a full time employee and you can pay for the services as needed. For example, press releases, website design and content and design projects can all be outsourced for a fraction of the cost of an internal team. Outsourcing can increase profitability if used wisely.
Anyone in business may find a time that they just need someone with a different perspective, or more experience in a particular situation or circumstance. This can happen with a business that is struggling, or to one that is prospering and growing quickly.
An experienced business coach can help you get out of the proverbial weeds by analyzing your finances and finding inefficiencies that can be corrected. They can help create practices and work flows within your business to ensure productivity and reduce redundancy. They can set up accountability measures to ensure that all your great plans are actually put in place and each step in the plan is accomplished. As a business owner, you have to be accountable to yourself, but your business coach can help.
When your business is experiencing rapid growth, a business coach can be your eyes and ears to the world. A business owner might be so occupied with simply helping each customer that the long-term goals of the company become a secondary concern. A business coach is a perfect partner for this type of issue, helping you make hiring decisions and market strategy decisions to best help your company take full advantage of that growth.
A business coach will give advice that not only develops your business, but also develops you. Each of us is capable of doing incredible things. The right mentor or coach can make a huge difference in the realization of those things.