It is commonly accepted wisdom that tax rules are complicated. This belief is well supported by the conflicting tax rules that apply to business owners, depending on their participation in the business. Let me try to make some sense of these conflicting rules. Overview Business owners may be active in their business. This means they are hands-on and are involved in day-to-day activities. Other business owners may be mere investors, adding their capital but not their labor. The following are various rules that take into account whether owners do or do not work in their businesses. Qualified business income deduction […]

When the polar vortex shut down offices and various government activities (including postal delivery in some mid-West states in late January), it prompted some businesses to allow employees to work from home. If it worked during this bad weather, couldn’t it work just about any time? It’s clear that technology has enabled employees to work remotely. The question to answer is whether this is a good idea and, if so, how to make it work. A business decision Some businesses…retail stores, restaurants, hair salons…can’t offer employees the opportunity to work from their homes. But many other types of businesses can. […]

Valentine’s Day is a time for romance. As actress/singer Pearl Bailey said: “What the world really needs is more love and less paperwork.” But in this era of the #MeToo movement, there is the potential for sexual harassment violations within a company. Can you or should you set a dating policy? About office romances It’s a fact that office romances are common. Vault’s 2018 Office Romance Survey found that 52% of workers said they’d had at least one office romance; “hookups” were the most common type. But the survey also found that views about office romances are changing. According to […]

Being a leader means displaying certain key qualities. This is the second in a series of posts on leadership qualities; it focuses on confidence, courage, and inspiration. As Napoleon said: “A leader is a dealer in hope.” It’s up to small business owners to inspire their staff to do great things. Why confidence, courage, and inspiration matter Ask employees what they want from the owners of their company or their managers and you’ll find that they want to know their higher-ups are passionate about what they do. This helps employees feel they are part of something that matters. And when […]

The tax law is not static. Since the publication of this book, the IRS has provided guidance on some of the changes for 2018 returns that were made by the Tax Cuts and Jobs Act of 2017 (TCJA). And there’s been additional legislation, court cases, and other IRS pronouncements that affect 2018 returns as well as planning for taxes in 2019. Here are the key developments, some of which can apply to your 2018 return while others impact your 2019 withholding and estimated taxes. At the time this Supplement posted, Congress had not yet addressed the tax rules that expired […]

The determination of whether a worker is an employee or an independent contractor has wide-ranging ramifications for both the company for which work is being performed and the person doing it. The matter of worker classification is ongoing because there is no single definition that can be relied upon. What’s more, the determination of worker classification may depend on where your company is located. Here’s what we know and what we need to know to avoid problems for our businesses. IRS criteria For purposes of federal wages withholding, FICA taxes, and federal unemployment tax, the IRS has a general rule. […]

According to Doodle, a company providing scheduling software, business meetings are a waste of time. It’s projected that in 2019, this will cost businesses $399 billion. It surveyed 19 million business meetings in the U.S., U.K., and Germany. With that said, some business meetings are needed, but there are ways to make the necessary ones successful. 1. Is a meeting necessary? Despite the conclusion that meetings are a waste of time, they are a necessary fact of business life. Meetings are important to employees where team efforts are used for project and other business functions. Brainstorming at meetings is often […]

The tax law is not static. Since the publication of this book, the IRS has provided guidance on some of the changes for 2018 returns that were made by the Tax Cuts and Jobs Act of 2017 (TCJA). And there’s been additional legislation, court cases, and other IRS pronouncements that affect 2018 returns as well as planning for taxes in 2019. For small business owners, it is important to take action based on what is known now, and to watch for any tax changes that may affect your business and personal taxes in the future. Pay attention to what is […]

Sales tax is a cost imposed on a company’s customers for the goods and services it sells. It’s up to the company to collect the tax from these customers and remit it to the state. And they must file sales tax returns to report their sales and tax collections. There are about 10,000 different sales tax jurisdictions within the U.S., factoring in rates of the states and various localities (e.g., counties and cities). Rate changes for 2019 Sales tax rates have changed this year in some locations. Usually, the rates go up (for example, in Alabama in some cities, Colorado […]

The federal government “shutdown” ran from midnight on December 22, 2018, until January 25, 2019, a total of 35 days. During this time, many small businesses struggled; federal contractors weren’t being paid, pending SBA-guaranteed loans weren’t being processed. These and other issues affected small businesses and reveal some important lessons for us all. After all, a government shutdown is not too different from a natural disaster that forces a business to close for a period of time. 1. Don’t ignore the indirect impact Even though your business hasn’t been directly impacted by the shutdown, you may feel an indirect impact. […]