15 Essential Financial Planning Tips for Entrepreneurs

15 Essential Financial Planning Tips for EntrepreneursWhether you’re a new entrepreneur or an old hand, money occupies a prominent role in your business. Failing to get – and keep – your finances in order can doom your company or consulting practice in the long run. While each entrepreneur has their own set of unique financial challenges, there are several areas where nearly all entrepreneurs can draw from a general well of wisdom.

1. Pay yourself first, Uncle Sam second.

No doubt, you’ve heard the expression “pay yourself first.” That’s good advice for everyone. However, entrepreneurs must remember that with no employer-initiated tax deductions to count on, they must also make provisions to cover self-employment taxes.

2. Hire pros, but know what they’re doing.

You didn’t go into business to spend hours working on spreadsheets. That’s why you hired a Certified Public Accountant. However, you should still understand the basics of keeping the books, if for no other reason than to be able to answer your accountant’s questions at tax time.

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Tax Stats 2014 (Infographic)

The 2014 tax season is here and here at MyCorporation, we’re taking a closer look at taxes in the United States and throughout the world in our latest infographic. Curious about where your tax dollars go? How the state corporate income tax rates vary throughout the U.S. and how they’re compared from all around the world? And what do we plan on doing with our tax refunds this year, anyway? Find out the answers to these questions and more below!

Tax Stats 2014 Infographic

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3 Different Ways You Can Pay Your Taxes

3 Different Ways You Can Pay Your TaxesThis post is brought to you by GoDaddy Online Bookkeeping (formerly Outright) the simplest way to manage your small business finances online. Sign up today for a less taxing tax time!

Think there’s only one way to pay your taxes when you have an amount due? Sure, in years past that was the case. You could send a check along with your filed tax forms and that was pretty much the extent of it. Paying taxes was part of the reason why tax time was such a pain for every hard working person in America.

Now, though, technology has made it where you have lots of options when it comes time to fork over your hard-earned money. However, you can’t utilize them if you don’t know what they are, so we thought we would take a quick look at your options to help you out. One of these should help you comply with your tax obligation with no problem.

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5 Tax Deductions for Your Small Business

5 Tax Deductions for Your Small BusinessIt’s the season to get your paperwork ready for Uncle Sam. As you prepare for April 15, be sure to remember the available deductions you can take advantage of as a business owner.

Your taxable profit will be lower the more deductions you take, so it’s in your best interest as a business owner to maximize them, so long as they adhere to the IRS deduction rules.

1. 401(k)

Most “small” businesses do not provide a 401(k) as a benefit for their employees, but if you can, you have a distinct advantage when hiring. And, a 401(k) plan has several tax advantages. First, your business is generally permitted to take a tax deduction for its contributions to the plan when the contributions are made. Those can be made as a simple match—or—in the form of profit sharing.

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Should Your Business Buy or Lease a Company Car?

Should Your Business Buy or Lease a Company Car?When it comes to obtaining a company vehicle, you have a couple of options available to your business – you can opt to either buy or lease. Let’s examine these options in detail.

Buying a car

If you decide to buy a car, keep taxes in mind. Writing off the costs on your taxes can be done in two ways – actual costs or mileage – and there are limits on how much you can take in a given year. If you choose actual costs, you have to do that every year you claim the vehicle; you cannot change your mind later. There are different amounts you can write off depending on the type of vehicle you own, too, whether it is an electric car or an SUV. If you’re looking to invest in a hybrid vehicle for your business, be sure to keep in mind that it will no longer qualify for a tax break.

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5 Filing Tools Entrepreneurs Need for Tax Season

5 Filing Tools Entrepreneurs Need for Tax SeasonJust like the annual trip to the dentist, tax season has crept up on us once again. To take the analogy a step further – if you have brushed, flossed, and rinsed as you should, your visit to the dentist will be quick and pain-free (both physically and financially). However, if not, the pain will long and agonizing. Similarly, if you have kept your accounting records in order the whole year with a constant eye on the upcoming tax season, preparation of your accounts will be pain-free (both from a time and cost factor). If not, the auditor may come to pay you a visit.

Thankfully, these days there are numerous tools to ease the burden of preparing all your tax season documentation. The following are five tools that will help you through the tax season with a minimum of fuss.

1. Salary Calculator – If you haven’t been using a salary calculator to assist in calculating what is left of your gross salary after taxes or to extrapolate weekly, monthly, or annual wages from an hourly wage rate, then you have been wasting your time. There are salary calculators freely available online. They are easy to use and are an excellent basis for preparing your tax return.

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Don’t Fret Because It’s Tax Season Again!

Don't Fret Because It’s Tax Season Again!Let’s just start out by being completely honest with each other, shall we? We all hate, hate tax season! Either we completely despise it or we run around in circles with our hands flailing about just thinking about it. I hated filing my returns too. I procrastinated until the last minute on the dreaded date – April 15th. I felt like there was ticking time bomb, ready to explode somewhere, but let me just wait till 10 seconds on the clock and do something trivial while time flies by. Have you ever felt the same thing? Don’t worry though, tax season does that to you.

I know procrastination can seem like the best idea in the world, but here’s some friendly advice: don’t do it. Just don’t. When it comes to filing your returns, planning in advance really helps. It may even help you reduce your income tax liabilities, because you’re thinking about it more thoroughly than you would if you were filing at the last minute. So, no more last minute fretting. Follow these tips and you’ll do just fine.

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Why Did I Just Get a 1099 MISC in the Mail?

Why Did I Just Get a 1099 MISC in the Mail?This post is brought to you by GoDaddy Online Bookkeeping (formerly Outright) the simplest way to manage your small business finances online. Sign up today for a less taxing tax time!

You probably thought you were done getting mysterious tax forms in the mail, yet this one shows up and ruins your day. You weren’t expecting any more forms at all and were even close to finishing up your taxes once and for all. What are you supposed to do with this thing?

The answer is you must have done some freelance work at some point in the last year, because the 1099-MISC is the form that independent contractors and freelancers receive in lieu of a W-2. Whether or not you remember performing a freelance job or not is irrelevant – it’s time to deal with it.

If this is the case or if you’re still learning about tax documents, we’re here to help! Let’s take a look at what the 1099-MISC is and how you can use it.

What it is

As stated above, the 1099-MISC is what independent business owners like freelancers get at tax time instead of a W-2. But why do you get a separate form? Why don’t your clients just send a W-2 and be done with it?

The answer is in how different parties handle taxes. When you have an employer, they handled most of your tax liabilities for you. They withhold the portion of your taxes the government agency needs and pay it in for you. This doesn’t happen with freelancing. You have the pleasure of paying the necessary taxes to state and federal taxing authorities yourself.

So when April rolls around, employers send a W-2 that has not only your income info but also how much tax they paid in for you. A 1099-MISC, though, only has how much money you made through that particular client. So if you charged someone $1000 to write blog posts for a year, they will send you a 1099-MISC that shows your total income through them as $1000.

What to do with it

You’re probably wondering why you need a tax form to tell you how much you made through clients. After all, you keep good small business bookkeeping records, so what’s the big deal?

Well, this information also goes to the IRS so they know how much income they should expect to see you declare on your income taxes. So don’t file it away just yet.

The first thing you should do with the form is to check your records. Are you sure that 1099-MISC is correct? If you got multiple forms, have you checked that they’re all correct? Verify independently that the form matches your records; otherwise, you’re going to have a big problem on your hands when the IRS comes knocking.

For example, say a client accidentally recorded that they paid you twice for a job. They’ll send you and the IRS a record that they paid you $2,000 this year, while you were actually only paid $1,000. The IRS will expect to see you declare that $2,000 on your income taxes, and will make noise if you don’t.

When you’re sure your 1099-MISC forms are correct, file them away for a few years. Even though the IRS ostensibly has a copy of your 1099-MISC forms, you never know when you might get a “dreaded letter” fro the IRS and need to make your case.

How many 1099-MISC forms did you receive this year? Were they all correct?

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50 States of Incorporation: New Mexico

This week we’re covering the Land of Enchantment – New Mexico! Though admitted to the union in 1912, New Mexico has, for centuries, been home to the native Navajo, Pueblo, and Apache people. With the fourth-largest native population in the United States, New Mexico continues to be an important center of Native American culture. This culture, along with New Mexico’s stunning natural beauty, are the two of the main drivers of one the state’s biggest industries – tourism.

Along with tourism, New Mexico has a rich deposit of fossil fuel and natural gas, and is home to multiple military bases. In fact, federal spending is one of the biggest sources of revenue for New Mexico. The government of New Mexico is always looking for ways to help small businesses grow, and there are loads of tax incentives available to entrepreneurs in the state! But what does it take to start a small business there? How do you form an LLC or incorporate in New Mexico? And are there any special rules you should be aware of?Incorporate in New Mexico

What is needed to start your small business in New Mexico?

Anyone that does business in New Mexico has to register with the New Mexico Taxation and Revenue Department, and be issued a CRS Identification number. Your CRS number is used to collect and pay tax on gross receipts. In addition to registering, all new small businesses should apply for a ‘Doing Business As’ name with the Secretary of State’s office so that they can advertise, collect checks, and open a bank account under their business’s name. If you’d like, we are happy to run a free DBA name search on your behalf!

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Business Basics: How to Start a Non-Profit Corporation

We have written on non-profit corporations before, but as we only dedicated a sliver of a paragraph to how you actually form a non-profit, we felt the topic was worth revisiting. A non-profit corporation is a great way to fulfill a philanthropic pursuit, and if you are looking at dedicating your life to charity, then running a non-profit may be right up your alley. Forming a non-profit corporation is actually very similar to forming a regular corporation.

Non-Profit

Step 1. Find a business name

Your non-profit is going to need a name just like with any other standard corporation. That name needs to be unique and, typically, has to include the a designator like ‘Corporation’ or ‘Incorporated,’ though not all states require that.

Step 2. File your Articles of Incorporation

After you’ve confirmed that your corporate name is available, you have to actually form the corporation by filing what is normally known as your Articles of Incorporation. The forms usually aren’t too complicated, and normally just ask for the names and addresses of the corporation, its registered agent, and its directors, as well as the corporation’s purpose for existing.

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