Category Archive : Business

Both in times of economic growth and recession, the need is heard for governments and especially banks to make loans to small businesses to stimulate and expand the economy. Well, understanding that our economy is based on credit, I don’t see anything wrong with these sentiments. However, what you don’t hear often enough is about small businesses that won’t, and in most cases simply can’t repay the loan once it is obtained. Let’s not even talk about reward. This part of business loans does not get enough attention as it should. Not in a way that I would scare or intimidate people start and operate business with commercial loans, but somehow … yes. This is why …

Know what you’re really getting into by getting a business loan

Oh, let me count the ways … not really, but maybe one day. However, for now, please understand that if you apply for and obtain a business loan, YOU MUST PAY WHAT YOU OWE WITH INTEREST. Common sense can be said, but not so common, I would answer. Business loans from a bank with or without government guarantee THEY ARE NOT GRANTS. Not to sound contrary, but one way or another, it will pay off. Okay, even in the event that the bank or loan source has to take a loss, trust me, the probability of getting a business loan in the short term is really low. I’m not saying impossible, but very close to my friends.

Why is business loan repayment important?

Reports and credit rating… I need to say more. Both personal and business credit scores and reports are significantly affected by your ability to pay on time and as agreed. Once again, our economy is built and runs on credit. This is another way of saying that it is trustworthy and operates with integrity. Heck, if you don’t pay people let alone the bank on time and as agreed, then you are not operating as a trustworthy person. Now, there is an understanding that life happens and unfortunate events happen to the best of us. I would dare to affirm that there is mercy for the person who communicates these life events in a proactive way rather than running up the hills and hide.

Understand and take seriously that business loans are MONEY NOT FREE. Learn the details and full scope of what you are signing up for and plan accordingly in case life happens.

Finding small business financing may take some perseverance, but finding genuine local small business loan information has never been easier. Today’s business owners can use the Internet to select and locate the best financing for their situation, starting with government-backed small business programs administered at both the state and local levels. These are the main places from where you can start your search.

One of the first steps in finding small business loans in your area is to check the lenders that are approved by the local Small Business Administration or SBA. This initial process will help you identify banks and private lenders that work with small businesses because not all banks and lenders do. These SBA-approved lenders offer federally backed financing through various programs. In addition to that, you can visit the official SBA website to find out the approved lenders or banks.

Business USA Access Financing Wizard business loans and financing options are based on your zip code, business purpose, ownership, and industry details. There are also check boxes to determine eligibility for special loans for local small businesses, such as minority or women-owned businesses.

There are hundreds of locations available throughout the US and its territories where you will get your local Small Business Development Center, which is one of your most valuable resource options. A good partnership between the state economic development organization and local universities, with partial funding from the SBA, local SBDCs provide information on all aspects of running a small business, including accessing local small business loans. You can find your closest office through the SBA’s local support page, which lists all offices by state and territory.

SBA financing isn’t the only game in town when it comes to local small business loans. Your local bank or credit union can offer financing that meets your requirements. You should call them because they are familiar with how you control your personal finances if you have an account there. In addition, they are familiar with state, city, and regional loans or grants. In addition to this, don’t forget to contact your city’s business development groups and your local chamber of commerce. They may have additional information on small business loans. Also, it is advisable to speak with a trusted financial advisor before making any decisions.

Internet is the best option for information. Therefore, you can also use the Internet to gather information about your loan needs. Research the top-rated lenders in your area and collect their contact information. If you can’t find a local credit organization with a good rating, expand your research area. Contact them by phone and schedule a meeting with them. They can offer you the most useful information about your required loan. Also, they can inform you that you are eligible for that loan program or not.

Generally, a personal loan is not guaranteed. It means that you do not need to provide collateral when you apply for a loan. The lender offers you the loan based on your credit and your requirements. You can easily get approved for the loan, if you have good credit. You can also be offered a lower interest rate. Visit a financial institution or search online for a personal loan.

Below is a list of some of the benefits of such a loan.

  • Lower interest rate: If you have good credit, then you can take advantage of personal loans with lower interest rates. About 15% APR on a credit card balance is paid by people with a lower credit card balance. But if you have good credit, you have to pay only 6% APR. When making a big purchase, it is considered a big difference.
  • Use It For Many Purchases – You can use your cash to make any purchase. Such a loan can even be used to buy a vehicle, start a business, or renovate your home. Other types of loans may impose restrictions on the use of the fund. But the conditions for using a personal loan are flexible and can be used for any purchase.
  • Consolidate debt: High-interest debt can be consolidated through a personal loan. Several smaller, high-interest debts, such as credit cards and student loans, can be paid off with a larger loan. You can save money on interest by consolidating your debt using this loan. Your debt repayment plan can be best managed by combining multiple loans in one place.
  • Improve your cash flow: Your cash flow can be smoothed by using a personal loan. You can get a personal line of credit by using your personal loans. You have to pay a low interest rate in this alternative form of use. It is not necessary to raise an emergency fund for the future. The borrowed amount can be repaid by accessing your line of credit.
  • Increase your credit score: Your credit score is counted according to your different types of accounts. One type of credit is represented by credit cards. In this case, you can use your credit score to manage your loans. Your score can be slightly increased by adding installment loans to your credit report.

Therefore, save a large amount on all your purchases by using a personal loan. Always remember to compare different loans before borrowing any amount.

If it were up to individuals to decide, many people would not take credit for any reason; be it personal or business. While the negative aspects of a debt are primarily felt when the borrower is unable to pay, it is hardly a premeditated scenario. When a financial institution considers that a borrower’s credit rating is good or at least decent, most credit facilities are willing to offer credit facilities. There’s a lot of talk about what a good credit score is, and for most people, strategizing how to get there is a daily struggle.

A borrower may feel pressured to repay a line of credit and may feel that too much is being denied to look good to the banks, but it is all worth it. It may not seem like a huge benefit to yourself, but maintaining a good credit score is good for a person, at least when it comes to future financial assistance. Is it possible to have more just because more effort has gone into paying off a loan, mortgage, or credit card debt? The honest answer is YES! A fairly decent credit rating is good, but getting a good rating is even better considering the many areas that can benefit;

Favorable mortgage rate

Due to the fact that mortgages are paid off over a long period of time, a homeowner can spend less money on interest if he pays the facility in a shorter period of time. The interest is paid even lower if the borrower’s credit score is high. According to data published by MyFico.com, a consumer with an average credit score of 760 or higher would obtain a mortgage at an interest rate of 3.74%, while another whose score is around 700 would obtain the same ease with an interest of the 3.96%. What is a good credit score? A cheaper mortgage!

Cheaper auto loans

A car is a necessity and if there is a way to get it for a lower price, then getting your credit score is one of them. On average, auto loans come in around $ 26,000, and considering that the average car owner will pay it back in five years, interest rates definitely make a difference in the amount of money paid. You can expect to save an average of $ 598 over the entire period with a good credit score. What’s a good credit score if you can’t get him a cheaper car?

Credit card rewards

Plastic money has been gaining popularity over the past decade, and although some people see it as a source of cheap credit, the amount of money spent on the card as interest depends on the borrower’s average rating. The best credit card for good credit offers an annual percentage rate as high as 17% or as low as 13%. The general assumption that lenders make is that a well-rated borrower will pay off his debt quickly and the balance is likely to be low at any given time. By marketing their credit card service as the best credit card for good credit, some lenders will offer 0% interest on credit for the first year to potential customers with a notable score. This means that people whose credit score is considered low or average will have to pay an interest rate during the first year of service. Other benefits that the best credit card for good credit owners can get from maintaining good credit scores are free airline miles, loyalty points for using the card, and cash back rewards.

Low interest on student loans

Some people can finance their own education with savings, sponsorships, or even through programs like work-study. These facilities are not always available and the need to obtain financing from a credit institution may arise when the opportunity to go back to school presents itself. Loans made to finance education are made on the basis of creditworthiness. The higher the credit, the less risky a loan is considered to be, and to account for this risk, lenders offer appropriate interest rates.

Commercial financing when needed

Starting a business definitely costs money and for many entrepreneurs, the only obstacle between them and prosperity is a financial partner who believes in the validity of their business idea. A startup lacks a strong business credit history, and lenders find it easier to consider a consumer’s score when assessing credit risk. Therefore, maintaining a good credit score is not only good for accessing financing, but also for qualifying for services with low interest rates.

Open your wallet right now and you will likely find a credit card. Credit cards have evolved from a “businessmen only” item to an item for everyone now. For those who want a “businessman” approach, look to American Express. Although this may seem like a cliché, American Express seems to be more aimed at businesses than the average buyer. The main reason for this is that American Express is not as widely accepted as other cards like MasterCard and Visa. This may be due to the fact that American Express is more of a “professional” card.

American Express has many different versions of cards for different people. The blue card, which has no fee and has the rewards of membership. Then there is the “Gold Delta SkyMiles Credit Card”. This card allows you to earn Delta SkyMiles, which you can then redeem for flight awards with Delta. The “Preferred Rewards Gold Card” is as follows, which has no spending limit and allows you to pay in full. The next card is the “Platinum Business Credit Card”, which allows you to pay over time and is fee-free for 12 months.

American Express is also useful for small businesses, as it has tools that include an open forum where you can discuss with other small business owners. You can also get tips on managing your small business finances. This, coupled with a good mindset, can help you achieve good business if you have a small business. However, what if you are running a larger corporation and not a small business? American Express also offers corporate card programs! (See their corporate page for more information). They also have business travel solutions, which can be used to help you when you travel.

Are you a merchant? Try American Express business tools. With this, American Express can help you run print ads such as magazines and newspapers. You can also get gift cards, which are prepaid credit cards that have a spending limit so you can safely gift money to other people. Lastly, merchants have free access to customer service for help with any issues they may have.

Like Visa, American Express has also introduced “prepaid” cards, which work much like a gift card that can be used anywhere American Express accepts. This allows parents who want to give money to teenagers who cannot easily lose an alternative. Prepaid cards can also be reloaded and have many of the same advantages as a regular American Express, minus a checking account and a PIN number. Unlike Visa, American Express offers “special” cards, obtainable in the “birthdays, dinners, movies, kids, teens, boyfriends, and thank you” varieties.

In general, American Express is a good option if you are a small business / use your credit card online / etc. However, if you are looking for a good option for a personal credit card, you would look to Visa as they have reliable customer service as well as being very easy to use. (Although the same could be said for MasterCard). American Express is overall an outstanding card, which has a good track record and I highly recommend it to new businesses.

The average American household has more than $ 15,000 of credit card debt. Many of these families are struggling to make the minimum monthly payments and some are using plastic to cover daily living expenses such as food, transportation costs, and medical copays. Despite improving economic conditions, more and more credit card users are receiving phone calls and letters from creditors informing them that their payments are past due.

If you have too much debt and stress, now is the time to stop this destructive cycle and get the help you need from a debt reduction program. This article teaches you the principles of debt settlement, one of the most popular forms of debt relief.

What is debt settlement?

Debt settlement, also known as debt arbitration, debt negotiation, or credit settlement, is a debt relief approach in which negotiators communicate with creditors on your behalf to settle your debts in reduced, agreed-upon amounts. . Only unsecured debt (credit cards, medical bills, and personal loans) can be negotiated. You cannot pay off mortgages, rents, utility bills, cell phone and cable charges, insurance premiums, auto loans, student loans, alimony, child support, taxes, or criminal penalties.

Once you enroll in a debt settlement program, your negotiation team opens a trust account for you. You must deposit up to 50% of your unsecured debt in the account over a period of 24 to 60 months. This money is used to pay off your debts with creditors. Because the average debt settlement company is for profit, you also have to pay the company a 15-25% service charge. This fee is based on the original amount of your unsecured debt or the negotiated amount, depending on the debt settlement company.

Most debt arbitration firms use a third-party escrow service to “store” the money that they will then use to fund the settlements they negotiate for you. The most common escrow company is Global Client Solutions. Sending money to your trust account is usually done through ACH on the same day each month. If your checking account is with a bank where you also have a past due loan or credit card balance, it is suggested that you use a different bank for your debt settlement program.

Here are three things a debt arbitration company should tell you before you enroll in their program:

1. You must be provided with a written “initial estimate” of all costs associated with settling your debts in reduced, agreed-upon amounts.

2. You must be given an “estimated time” to reduce your debt.

3. You should be informed that debt settlement can negatively affect your credit score.

Here are some examples of what a debt settlement company cannot tell you:

“We can eliminate 50-70% of your debt.”

“We can pay off your debt for pennies on the dollar.”

“We can cut your debt in half.”

“Debt settlement will not affect your credit score.”

“Calls and letters from creditors will stop once you enroll in a debt settlement program.”

“Debt settlement does not affect your taxable income.”

“Once you join a debt settlement program, you no longer have to communicate with your creditors.”

If you are considering debt settlement, here is what you need to know first:

1. Debt settlement will not solve your careless saving and spending habits. The only way to achieve lasting financial freedom is to apply the dynamic laws of financial recovery to your daily life. These smart money principles will help you establish spending and saving habits that are built on a solid foundation. They are covered in a separate article titled “The Dynamic Laws of Successful Financial Renewal.”

2. Debt settlement should not be confused with bill consolidation, another form of debt reduction. Invoice consolidation, also known as interest rate arbitration, takes your credit cards and high-interest loans and consolidates them into a low-interest loan that you can afford. In other words, you are applying for a loan to pay off many others. Invoice consolidation does not reduce the outstanding balances you owe to creditors. Just lower your interest rates.

3. One of the main reasons people choose debt arbitration is to avoid filing for bankruptcy protection. Here are five reasons why the consequences of bankruptcy can be overwhelming:

Bankruptcy stays on your credit report for 10 years and negatively affects your credit score.

Bankruptcy will follow you for the rest of your life. For example, many applications for loans, credit cards, and jobs ask if you’ve ever filed for bankruptcy.

Bankruptcy cannot eliminate alimony and child support obligations, as well as criminal penalties.

Except in very limited circumstances, bankruptcy cannot kill student loans.

Bankruptcy cannot prevent a “secured party” from repossessing the property. According to Nolo.com: “A bankruptcy discharge eliminates debts, but does not eliminate ties. So, if you have a secured debt (a debt in which the creditor has a lien on your property and can debt), bankruptcy can eliminate the debt, but it does not prevent the creditor from repossessing the property. “

4. If your unsecured debt is $ 10,000 or more, debt arbitration could save you more time and money than bill consolidation. Here’s why: With debt settlement, your unsecured debt is reduced by up to 50% and you won’t have to pay additional interest on the remaining balance. This is not the case with invoice consolidation, where there is only a reduction in interest rates. As a result, a debt settlement program may have a shorter repayment term than an invoice consolidation one.

5. There is no public record that you have ever paid off your debts.

6. With debt arbitration, reduced balances appear as “paid in full” or “paid as settled” on your credit report.

7. Debt settlement negatively affects your credit score.

8. Never let a debt settlement company pressure you to join your program.

9. Don’t hire a company that isn’t interested in your specific financial needs.

10. Before enrolling in a debt settlement program, review your budget carefully and make sure you can afford the monthly payments. Don’t be surprised if you have to eliminate certain nonessential expenses.

11. During the debt settlement process, calls and letters from creditors may continue. Enrolling in a debt settlement program does not automatically stop “legal collection activities.”

12. Debt arbitration can be a gamble because some creditors may refuse to negotiate. In such cases, you are responsible for paying the outstanding balance on the creditor’s terms.

13. As we mentioned earlier, only unsecured debt, such as credit cards and personal loans, can be negotiated at reduced amounts. You cannot pay off mortgages, rent, utilities, cell phone and cable bills, insurance premiums, auto and student loans, alimony, child support, taxes, or criminal penalties.

14. You could suffer tax consequences. For example, if you owe $ 25,000 and accept $ 15,000, the difference of $ 10,000 is considered taxable income. The creditor must send you a 1099-MISC reporting a “discharge of debt income.”

15. A debt settlement company cannot represent you in court unless it is also a law firm.

16. Debt arbitration cannot prevent your home from foreclosure or car repossession.

17. Despite warnings from the Federal Trade Commission (FTC), some debt settlement companies continue to engage in unfair business practices. The Federal Trade Commission advises: “Before you enroll in a debt settlement program, do your homework. You are making an important decision that involves spending a large amount of your money that could go toward paying your debt. Enter the name of the company “.

Here are some factors to consider when choosing a debt settlement company:

1. How long has the company been in business? How much consumer and business debt does the business handle each year? How many people, families and companies does the company advise each year?

2. Are you assigned to an experienced financial advisor to ensure that your debt settlement program runs smoothly from start to finish?

3. Is the debt arbitration firm a member of the Online Business Bureau and your local BBB? What are your qualifications with both offices? What kinds of complaints have been made about your services?

4. Is the company an active member of TASC, (Association of Settlement Companies)? TASC requires all of its members to maintain a strict set of standards when doing business with consumers and businesses.

5. Is the debt arbitration firm a member of Dun & Bradstreet, the world’s source for business information?

This article has taught you the principles of debt settlement, one of the most popular forms of debt relief. Although a debt arbitration program can help you reduce your debt, it does not teach you how to live fiscally. The only way to achieve lasting financial freedom is to apply the dynamic laws of financial recovery to your daily life. These smart money principles will help you establish spending and saving habits that are built on a solid foundation. They are covered in a separate article titled “The Dynamic Laws of Successful Financial Renewal.”

Medical practice financing for medical practice loans is the goal of most new and established medical practices seeking working capital. There are many aspects of medical practice financing that you need to know before you can hope to fund your medical practice! You want to make sure your medical practice gets all the funds it needs in a single practice finance loan to have a successful practice!

Seeking practice financing for your health care practice needs is one of the most important steps in obtaining health care working capital funds to support your practice. Obtain adequate financing to help you purchase expensive equipment or improve your office setup and / or improve the daily cash flow requirements of your medical practice.

Operating a healthcare practice is more difficult than you would have imagined! You need to have a good understanding and control over the business side of the daily cash flow needs of your medical practice! Finding the right lender to get approved for medical financing for your practice is critical to obtaining the funds you need for your healthcare practice!

The good news is that healthcare lenders generally consider doctors a good investment based on personal credit scores! Even in our current tight economic climate for loan businesses, banks are restricting credit and loans are continually being rejected. Finding the right healthcare lender in the medical practice industry has been a challenge for the medical professional.

Specialty health care lenders are still in the business of making profitable loans for your portfolio, so finding sound and reliable medical practices to finance is doable with the right lender. As a general rule, physicians are considered favorable in the banking world for financing their medical working capital and medical term loan practices.

Doctors are considered good credit risks because, on a percentage basis, healthcare professionals have very few defaults. In medical practice financing, dentists, physicians, and all healthcare professionals generally have better personal credit scores, making them good candidates for medical practice loans and term financing.

However, in cases where doctors have had poor personal credit history, it is recommended that the healthcare professional contact a credit repair company to improve their personal FICO credit score before attempting to apply for financing for the medical practice. Medical financing loans can exceed the $ 5 million range, so you must be in good financial condition with respect to your credit history to be eligible for the most attractive loan terms and rates.

Another exception to this rule is in the case of starting new medical practices. Like so much else in our tough economy today, lenders are cutting funding for medical practice start-ups, making it extremely difficult to obtain financing. Currently, lenders view financing for medical practice with less certainty because these services are currently riskier in today’s startup lending world. This does not mean that you will not get funding for your initial medical practice, you simply will not be able to find 100% of the capital you are looking for.

After having been in the medical practice industry for several years, you may want to consider expanding into multiple offices for medical practice growth. Using additional term medical loans for practice financing can help you expand your medical practice to new heights and grow in a larger space, invest in new technology, and make your medical practice more efficient, allowing you offer additional services for your health care medical practice.

To grow a healthcare practitioner practice, the physician must consider the time value of money. So if the doctor can be funded, you need to consider how much additional revenue those funds will bring in. If the revenue from the practice is less than the cost of funds and is positive, then the physician should proceed with financing. The concept of the time value of money comes into play in the sense that the doctor does not have to wait for the funds to be collected from the insurance providers with their current sales, but enters receiving funds sooner than they would have had. the money to get the money. cash flow from medical practice.

So while this may cost more in the long run, the Doctor will get the benefit of earning income sooner and will have a lasting effect on income and your daily cash flow. The cost of funds will end and then the total benefit will be that of the doctors with cash flow financing.

Doctor Financing of the medical practice and Working capital of the health practice

Healthcare Medical Practice Working Capital Financing is ideal for healthcare professionals who want to expand their practice, acquire new equipment, or improve their practice. Healthcare Practice Working Capital Loans and Healthcare Lender Financing come with fast working capital financing, quick and easy terms.

Health care practice working capital funds can be used to provide an existing health care physician with the funds necessary to purchase a medical building or they can use these working capital funds for the building down payment. Typically, a monthly mortgage payment can be the same payment or, in many cases, less than what the doctor or doctor’s office is paying for the rented office space. Therefore, if the doctor or the doctor’s health care practice does not have cash available to purchase the medical building, they can obtain a practice working capital financing to obtain the funds necessary to acquire a building for their existing medical practice. . Practice bank statements and a one-page application is all that is generally needed to see if the doctor, the health care practice, qualifies for working capital funding. This may fulfill the physician’s dreams of now owning an investment property that the physician now owns.

When a physician or physician’s practice is looking to purchase equipment, the physician may not have the down payment required to pay for the equipment lease purchase. Working capital financing is a good way to get the doctor the necessary working capital funds to lease the equipment. In general, having certain equipment up-to-date is a good way to keep patients away from competing doctors.

Suppose the doctor’s office is looking to own an asset, such as a piece of equipment, quickly, but does not have the working capital funds. Getting the physician into the working capital financing practice will allow the physician to purchase the equipment and pay off the working capital financing of the practice in 6 months. At that time, the equipment is free and clear ownership and there are no loans or leases on the books, only the equipment asset. When you calculate the cost of financing equipment in this way, it costs the same as getting a long-term loan, but it pays off quickly, and the doctor now has an asset that the doctor can always sell for cash.

Regardless of what the doctor’s office needs to buy, even if it’s for personal items like a home, an office working capital financing based on the doctor’s existing office is a good way to provide the funds needed to make that purchase. . Buying a good software system will also save the doctor money because it should free up employee time. The working capital financing will pay for this asset, which is another good way to improve the practice and its operation.

Debt consolidation is another way to organize all the doctor’s debt so that the doctor spends less time fumbling for different payments than the different payments needed. Hiring a marketing company to increase revenue is another good way to use a practice working capital advance. The down payment required for this marketing company is where the practice working capital advance can be used.

Also the peace of mind of being able to pay bills on time is another reason to receive working capital financing. If a doctor’s office needs 100% medical financing for their office and you have a poor personal credit score, then it’s a good idea to work towards trying to clean up the doctor’s FICO credit report. Any professional in the medical practice needs their personal credit score to be up to date.

It is easier to receive working capital financing for practice when a personal FICO score is above 660. One way to increase a physician’s personal score is to ensure that the existing credit balance does not exceed 50% of the credit limit. credit available. If the debt exceeds 50% of the card limit, it is a good idea to transfer the debt to another card.

This will spread the debt but keep the debt-to-income ratio lower. Another good thing you can do is open new cards and not use the card. The more cards you have and have no balances, the higher your personal credit limit. You must use the card at least once a year so that the credit card company does not close, closing cards will lower your personal FICO score because it will lower your personal credit limit.

Being a small business owner comes with a host of challenges. It is not only concerned with taking care of the needs of its customers, collecting and paying its suppliers. You also need to be concerned about complying with federal and state laws, as well as local guidelines. Small business owners, especially sole proprietors, are at a higher audit risk. The federal government believes that the self-employed are underreporting their income and overreporting their expenses. According to the Tax Help Online website, “You might be surprised to learn that 20% of all small business audits involve not allowing deductions because the IRS reclassifies small business as a hobby under the so-called ‘loss of hobbies rule. ‘”. Section 183 of the Internal Revenue Code (Nonprofit Activities) limits the deductions that can be claimed when an activity is not for profit. IRC 183 is sometimes called the “hobby loss rule.” As a small business owner, it is your responsibility to ensure that your business is viewed as a legitimate business in the eyes of the IRS and not as a hobby.

Below I’ve listed some smart business practices that will not only help you define and grow your business, but also help you document that you are running a real business and not just doing a hobby.

1) Write a business plan. There are many local small business support centers that can help you put your plan in writing. For example, the Small Business Administration has local and online resources to help you.

2) Determine your legal structure (LLC, Partnership, C Corporation, S Corporation, Sole Proprietor).

3) Obtain an Employee Identification Number (EIN) from the IRS.

4) Open a separate bank account for all your business transactions (deposits and expenses). You must keep your personal and business transactions separate.

5) Establish a separate line of credit or credit card to use with your business. Put personal expenses on a business card and put business expenses on a business card.

6) Keep your business documents organized. The National Federation of Independent Business recommends keeping business records and receipts for at least seven years.

7) Submit completed tax returns on time. This would include all required timetables and signatures. Depending on the type of organization you have, you or your CPA will fill out forms like 1020, 1065, 1040 Schedule C, 1096, 1099, 940 along with your self-employment tax calculation. I highly recommend finding a local Certified Public Accountant (CPA) who is familiar with your industry to help you determine which forms you will need to file and ensure they are sent on time and to the appropriate government office.

8) Hire a support team: An attorney can help you with your legal structure and a certified public accountant can help you keep your finances in order, as well as comply with local, state and federal government regulations.

9) Create industry standard business documents and forms to include: logo, letterhead, business cards, and website.

10) Advertise in local media along with appropriate trade periodicals.

According to IRS document FS-2008-23, below are some of the questions the IRS can ask when determining whether your business is engaged in a for-profit activity. You will need to be prepared to answer these questions and provide documentation.

1) How many hours a week do you work in the business?

2) Do you depend on the income from this activity to pay your bills?

3) Do you have the necessary knowledge to develop the activity as a successful business?

4) Have you made a profit from similar activities in the past?

5) Does the activity make a profit in some years?

6) Do you expect the activity to generate benefits in the future?

7) Are there elements of personal pleasure or recreation?

8) Has your company made a profit in 3 of the last 5 years?

According to IRC 183, “If your business is not for profit, the allowable deductions cannot exceed the gross income from the business.” The result is that your business deductions will now become itemized deductions and will be limited to your hobby income.

For more information and assistance to help your business maintain its position as a legitimate business, contact a local CPA. Each state has its own independent licensing board. If you are in North Carolina, you can contact the NC CPA Board website and click the “Find Licensee” button to locate a CPA near you. All active and licensed public accountants in North Carolina are located on this website.

We all have a common fear: Everyone is a little scared of the IRS. Although a little fear is healthy, for a small business owner or self-employed person, too much fear of the IRS can be detrimental to the bottom line.

If you want to pay less income taxes, take the time to learn what others in your industry are deducting and keep track of all legitimate business expenses. The savings could easily amount to several hundred dollars. Start with these ten categories.

Home office expenses: If you operate your business from your home, a portion of your home insurance, rent, repairs, maintenance, utilities, and other expenses may be deductible.

Commercial mileage: By keeping track of every business mile traveled, you’ll pay less tax. But, if those miles aren’t tracked correctly, they can be rejected.

Interest on commercial debt: Monthly business checking account fees, bank overdraft penalties, business credit card finance charges, interest on a home equity loan to finance your business, and annual credit card fees are deductible.

Health insurance for self-employment: Self-employed health insurance costs are a business deduction and are subtracted on your personal tax return.

Retirement deposits and IRA: Retirement accounts and IRA deposits for self-employment and small business also count on your personal 1040 tax return.

Promotional expenses: If you spent money or traded goods to make your business or product name known to the public, that cost is deductible as a promotional expense.

Seminars and classes: All classes that do best at what you do to generate income, as well as general business classes, are deductible. Remember to record all mileage and travel expenses if you have them; those are also deductible.

Subscriptions: All magazines, newspapers and newsletters that you buy to improve your business knowledge, including online subscriptions, can be deducted on your business tax return.

Rent: If you pay rent for an office, desk space, chair space or storage space, rent tools or equipment, pay for loft space, or have other rental expenses within your business, those expenses are deductible.

Inventory: Inventory costs are only deductible when inventory is sold; Unlike most other business expenses, they are not always deducted in the same year the money is spent. The IRS has specific rules for inventory management.

A tax professional can only work from the information you provide, and unless you understand what you can and cannot deduct on a business return, even a good tax professional will lose valuable deductions. Keeping good records, documenting all business expenses is all you will need in case an audit comes up.

Our firm does not do taxes, even though I did them for 12 years. When I started my practice, that was a service that I just didn’t want to offer. However, we partner with CPAs and other tax professionals to ensure that the guidance we provide to our clients is in line with the advice that their tax professionals provide.

As part of that guide, there are some tax advantages that most business owners don’t know about or just don’t take advantage of. There are also some “deductions” that should be avoided due to incorrect tax information. Here is a list of the five most common.

Track all expenses constantly

Keep track of all your expenses, including those you pay yourself. Business owners always ask me “what about the things I paid for with my personal credit card?” Yes, everything is deductible; you just need to include it in the accounting records and post it. Keep in mind that the credit card is personal, so do not add that account to your chart of accounts. They will count as contributions from owners or shareholders. TIP: Record these charges monthly so you don’t forget them at the end of the year.

Avoid money leaks

As a small business owner, you are sometimes faced with cash flow problems. As a result, you fall behind in paying your bills and taxes. While your provider may not charge late fees, you better believe the IRS will do so in the form of penalties and interest. And these my friend are not deductible. No, not even the interest part. TIP: Cap this waste of money by paying your taxes on time and use those funds for an expense that is deductible.

Maximize Retirement Contributions

Most small business owners are so busy working on their business that they never stop to think about what they will do once they retire. I’m not even sure you’re thinking about retiring. But the fact is, you will, one day. So you have to make sure you have some kind of savings. There are several retirement plan options that will allow you to set aside some tax-free funds for your retirement, all of which are tax deductible for the business. Yes, you can have your own business retirement plan. Cool right? TIP: Contact your tax advisor and financial advisor to discuss retirement plan options.

Expenses paid personally

I can’t say enough: stop mixing your personal expenses into the business. They are not tax deductible and we accountants know when you are trying to do so. Believe it or not, we are smarter than the average bear. TIP: Don’t mix.

Section 179

The IRS allows you to spend the purchase of a major fixed asset in the first year instead of depreciating it, exposing certain qualifications. You can deduct up to $ 500,000 and reduce your taxable income to zero. TIP: If you can, don’t buy all the equipment until December so you can buy enough and not too much.

What tax tips have you taken advantage of to help keep more money in your business?