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January 18, 2020

Expenses Before the Business Functions Are Start-up Costs

That’s what the Tax Court told an accountant who paid more than $300,000 to get farm property ready for producing maple syrup and harvesting blueberries. He wanted to deduct the cost as a business expense, but the court said they were start-up costs. He hadn’t performed any function for which the business was organized (i.e., collecting syrup and harvesting blueberries). “Cultivation of plants is an essential part of a trade or business involving production of commodities from those crops.” Once the business begins to function, start-up costs (see business start-up and organizational costs) can be deducted (generally amortized over 15 years).

Remember — The Guide to Self-Employment (2nd edition), Small Business Taxes 2020, and 1001 Deductions & Tax Breaks 2020 are NOW available on Amazon.

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Resources For Your Business
  • According to the American Institute of Stress, 80% of workers feel stress on the job. This stress causes problems for both the employee and the employer. For example, 62% of workers experienced neck pain by the end of the day and 44% had stressed-out eyes. It’s been documented that stressed workers have lower productivity and increased absenteeism; 19% have quit a position because of stress. For the sake of your employees and your company, think about how you can help employees reduce their work-related stress. 1. Set realistic job expectations Many employees feel overworked and underpaid. In a quest to […]

  • Business owners who are self-employed usually pay their taxes in four estimated tax payments for the year. The final installment for 2019 is due on January 15, 2020. The first installment of estimated tax for 2020 is due on April 15, 2020. Figuring estimated taxes correctly is important so you don’t overpay and have to wait for a refund or underpay, which can result in penalties.  In the past several years, some owners have deliberately underpaid estimated taxes because the IRS penalty was so low. But with interest rates rising, this strategy is going to be costly. Here are some […]

  • According to one scholarly paper, which examined the effects of employment on influenza rates, “the spread of the influenza virus is linked with higher employment, particularly in industry sectors with the highest levels of interpersonal contact.” In effect, recognize that if an employee infected with the flu comes to work, he or she could infect others. Instead of losing productivity from the employee who brought the flu to your workplace, now you have lost productivity from other employees. What can you do? (The following is adapted and updated from a blog post 6 years ago.) Encourage healthy workplace practices Staying healthy […]

  • There are many new rules for qualified retirement plans and IRAs that impact your business in the coming years. These new rules are contained in the SECURE Act, which is part of the massive spending measure (P.L. 116-94) signed into law on December 20, 2019. (A roundup of other business-related tax changes in the spending package was discussed in a previous blog post.) Some rules take effect on January 1, 2020, while others don’t start until after 2020. Multiple employer plans (MEPs) Two or more unrelated employers can join together in a pooled employer plan. This new option will allow […]

  • “I can’t change the direction of the wind, but I can adjust my sails to always reach my destination.”   – Jimmy Dean. No one knows how the economy will change in the next 12 months. Most are predicting a good 2020, but some are cautioning about recession. We know from past experience that the experts don’t know any more than we do. Recall the dire predictions of a recession at the end of 2018 that drove the stock market down in December 2018. And it turned out that 2019 was a boom year. Because economic conditions always change, it’s essential […]

  • A while back Unum polled employees to determine which benefits they valued most. In today’s tough job market, small employers are challenged to offer a number of benefits in order to compete for talent with other employers…large corporations and small businesses. Nonetheless, there are many desired benefits that won’t break the bank. Here are the top 15 fringe benefits in demand and the tax and practical implications of offering them so you can decide which of these benefits to offer now. Paid family leave The poll found this employee perk to be the top one desired, with 58% identifying it […]

  • While few keep them, it doesn’t stop us from making them every year. Here are my 10 favorites for business owners. (This is an expanded version of an earlier post.) 1. Delegate more Mary Kay Ash said “Delegate your work. Stop spending dollar time on penny jobs.” In other words, spend your precious hours generating revenue. So, if you are in a service business and charge $100 per hour, don’t spend an hour on work you can pay someone else to do at $30 or $50 per hour (and probably do it better than you). For example, you may engage […]

  • The number of self-employed individuals is growing substantially. FreshBooks’ Women in the Independent Workforce, 2nd annual report says that between 10 and 12 million women are expected to join the independent workforce in America over the next 5 years. The Bureau of Labor Statistics projected a 7.9% growth rate in self-employment over a 10-year period. Upwork and Freelancers Union reported in Freelancing in America: 2018 that there were 56.7 million Americans who freelance. My latest book — a revision of one published in 2013 This book is intended to help self-employed individuals understand back-office obligations, including taxes, banking, and insurance. […]

  • The massive spending measure (December tax package), Further Consolidated Appropriations Act, 2020 (H.R. 1865), which was signed into law on December 20, 2019, makes an estimated $426 billion in tax cuts. Some of these tax cuts relate to 2018, for which returns have already been filed. Some relate to 2019, which will come into play when returns for this year are filed in the 2020 tax season. And some don’t kick in until 2020 or beyond. Here is a roundup of some of the key business-related tax changes in the new spending measure to note: Reinstatement of expired provisions A […]

  • The 2020 Edition Book Review For more than 25 years, I’m proud to say my tax book for small businesses has been the go-to guide for owners and their tax advisors. The 2020 edition for preparing 2019 returns as well as tax planning for 2020 has been updated to incorporate new laws, court decisions, and IRS pronouncements. As has been my practice, I’ve written my own book review to explain the purpose of the book, what’s new, and what’s ahead. Why small business owners need a tax book If you’re like the vast majority of small business owners (86%), you […]

Multimedia

Resources For Your Business

Getting Out of Your Commercial Lease

Successful Tax Planning Strategies for Your Small Business - Interview by Jim Fitzpatrick

Book Interview -- Smooth Failing

Book Interview -- J.K. Lasser's Small Business Taxes 2019

#TWEETCHAT CALENDAR
TODAY'S TWEETCHATS

January 19, 2020

UPCOMING TWEETCHATS

Events in January–February 2020

barbara’s books

  • This e-Book was created for Uber and Lyft drivers as their GPS -- to help them get where they want to go in their business, safely and securely. Do you enjoy driving and being your own boss with flexible work options? Are you looking for a part-time (or full-time) activity that earns good money? Maybe you’ve already discovered that there are great opportunities for making money with your car, and you’re a business owner driving for Uber, Lyft, or other platform. Or, you’d like to become an Uber or Lyft driver but uncertain how to begin. This guide, "The Uber and Lyft Driver's Guide to Running Your Business," is your answer!  
  • Maximize your bottom line with the nation's most trusted small business tax guide

    J.K. Lasser's Small Business Taxes 2020 is the small business owner's ultimate guide to a money-saving, stress-free tax season. Providing straightforward advice from the nation's most trusted tax expert on small business taxes, this book gives you the answers you need quickly, with clear, concise guidance. Updated to cover changes from the Tax Cuts and Jobs Act and other legislation, this edition also includes an e-supplement covering additional developments from Congress and the IRS to keep you fully up-to-date.
  • A complete list of individual tax relief opportunities

    J.K. Lasser's 1001 Deductions and Tax Breaks 2020 is the complete and thorough guide to reducing your tax burden. By listing every possible deduction and credit available to individual taxpayers, this book can help you achieve substantial savings on your 2019 tax return. Updated and expanded to cover new and changing tax law, this edition also includes an e-supplement covering the latest developments from Congress and the IRS to keep you fully up-to-date. Stop overpaying and gain peace of mind as you find the answers you need for your specific tax situation. Mine your paperwork for write-off opportunities, and claim your tax breaks correctly; easy-to-follow instructions give you clear guidance through the maze of worksheets to help you reclaim what is legally yours.
  • What every self-employed person needs to know about their taxes!

    If you’re self-employed, chances are the majority of your time is spent finding new customers or clients, servicing existing ones, and handling each and every aspect of your business. Freelancers, independent contractors, gig economy participants, and other individuals working for themselves need to be aware of their responsibilities when it comes to paying their taxes. Even if you have an accountant or use tax preparation software, you may not be aware of all the deductions and credits you are entitled to. That’s where the experts at J.K. Lasser come in. The second edition of J.K. Lasser's Guide to Self-Employment helps you file your taxes correctly, accurately, and on time. Using clear, jargon-free language, this bestselling guide explains the legal and financial implications of self-employment and shows you how to keep as much of your hard-earned money as legally possible. A reader says: "This book, Guide to Self Employment, is an excellent tax resource for all freelancers & self employed people, including small business owners. Barbara Weltman is a knowledgeable tax attorney & small business specialist."
  • Presenting a recently-launched, updated, paperback edition!  Barbara Weltman takes an inspired look in Smooth Failing at the hard lessons learned when things go wrong. Through extensive interviews with entrepreneurs whose ventures failed for a variety of reasons — some stunningly unexpected, some painfully inevitable — Barbara gleans valuable insights about the small mistakes that can lead to large scale catastrophe.  Smooth Failing seeks to save readers from similar disaster — while empowering those who are learning from failures and adversity to bounce back stronger and wiser on the often rocky road to success.
  • Small Business Survival Book

    12 surefire ways for your business to survive and thrive! Owning a small business can be a fulfilling and financially rewarding experience, but to be successful, you must know what to do while the business is up and running, and, most importantly, what to do when the business runs into trouble. This book is definitely part of what you need to succeed!
  • As Vicki Raeburn of Dun & Bradstreet notes in the forward, "...the successful creation of credit by small business has a significant effect on one of the most important business drivers, namely cash flow. ...     [This book has] the information needed to understand and build business credit."

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    -An eBay Radio listener - purplejaime1976

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