Google+ Followers

Sunday, May 20, 2018

Cybersecurity 101


Here are a few pointers:

Choosing passwords:

     Using more letters, numbers and symbols while they may help, are not infallible.  

     Five or six words may be of more help by increasing the random possibilities.

Using a password manager:

     These pick random very long passwords that you do not need to remember. 

     They require a very long password that you better not forget

Public Wi Fi:

     Anyone can easedrop and intercept a conversation

     Avoid these if possible

     Use only a trusted virtual private network (VPN)

Charging your phone:

     Doing this in public places is not a good idea (airports, etc)

     Venerable to side channel attacks.

     If you must, turn the phone off while charging

Decoys can help:

     Download multiple similar apps (ie. Bank apps) making it harder to find which is real.

     Create multiple “fake files” (ie. Tax returns, customer records) for the same reason

Technologists are continually looking for alternatives, so stay on top of this subject.

 
How is your business protected?

 
Steve Koenig, SCORE Counselor

Visit us at: www:scoresouthflorida.net

 

 

Wednesday, May 9, 2018

S Corporation Shareholder-Employee Business Use of A Home

 

Shareholder (owners) of an S Corporation who render services to the corporation's trade or business are deemed to be an employee (and not an independent contractor) of the corporation.
 
Because the shareholder is deemed an employee, they are required by law to be paid a reasonable amount of compensation (wages) services rendered which is reportable on their W-2 each year.
 
The general rule is that employee un-reimbursed business expenses (business expenses that an employee incurs while conducting business that are not reimbursed by the corporation) are deductible on Form 2106. These expenses are then transferred to Schedule A, Itemized Deductions, and included are line #21. Further, these expenses are subject to a 2% of Adjusted Gross Limit threshold limit before they can potentially become deductible, assuming the taxpayer does itemize deductions and not take the standard deduction.
 
Employee business expenses (including the business use of a home) by a S Corporation Shareholders officers, or regular employees have a special requirement in order for the expenses to be deductible.
 
The tax law requires a written corporation resolution that requires the taxpayer to incur expense as may be necessary or required, and that they would not be reimbursed by the corporation. Thus, a written corporate resolution or policy in place requiring a shareholder, officer or employee to assume specific expenses is required in case of an IRS Audit.
 
Without the corporate resolution, the IRS in an audit will most deny the deduction as a voluntary payment of corporate expenses, and consider them to be capital contributions or loans to the corporation.
 
NOTE: Even if there is a written corporation resolution, specifically the shareholder MUST follow the law requiring they receive reasonable compensation wages for services rendered to the corporation.

 
This article was written by Donald M. Scherzi, CPA, CFP, LLC
Mike Lupo, SCORE Counselor
Visit us at: www.scoresouthflorida.net

 

Wednesday, May 2, 2018

Home Office Deduction For Self-Employed

 

Self Employed taxpayers file Schedule C (Form 1040) to report their business income and expenses.

The home office deduction, if allowed, is taken on Line 30 of Schedule C.

The IRS allows taxpayers two options for taking the Home Office Deduction, the Simplified Method or the Regular Method, whether they own or rent the home.

Under the Simplified Method, the taxpayer is allowed a home office deduction of $5 per square foot up to a maximum of 300 square feet in lieu of determining actual expenses. Actual expenses are not considered or taken into account. Thus, the total potential deduction is $1,500.00.

If the taxpayer uses the Simplified Method for the home office deduction, they do not File Form 8829 Expenses For Business Use of Your Home.

Under the Regular Method, the taxpayer take into account various actual home office expenses and then takes the business use percentage of the home office to calculate the potential home office deduction. Thus, more record-keeping is required to track the expenses.

If the taxpayer uses the Regular Method, they must file Form 8829 Expenses For Business Use of Your Home, to calculate the allowable home office deduction, which then transfers to Schedule C, Line 30.

Typical home office expenses include: mortgage interest, real estate taxes, homeowners insurance, utilities, maintenance and repairs, and depreciation.

Under either method you need to figure the percentage of your home devoted to your business activities. Therefore you will need both the total square footage of the entire home and the square footage devoted to the business activity.

Regardless of the method chosen, there are two basic requirements for your home to qualify as a deduction:

1-Regular AND Exclusive Use-you must regularly use part of your home exclusively for conducting business, and

2-Principal Place of Business-your home must be the principal place where you conduce business.

IRS Publication 587 from the IRS provides information for Business Use of Your Home.


This article was written by Donald M. Scherzi, CPA, CFP, LLC
Mike Lupo, SCORE Counselor
Visit us at: www.scoresouthflorida.net

Marketing Tip of the Month


#12  CALLS TO ACTION

Here are some great calls to action to use in your sales literature. Choose the ones YOU like, then, if possible, change them from time to time to find out the BEST ones for your business: Find out more, Visit now, Get on our mailing list, Join the club now, Take the next step, How to get started, Start here, How it works, Learn more.


Martin Kahn, SCORE Counselor

 

Thursday, April 5, 2018

Partner's Business Use of A Home


 
Partners report expenses for the business use of a home as unreimbursed partnership expenses on Part II,  Line #28, column (h), Schedule E, Form 1040.

Partners do not use Form 8829, Expenses For Business Use Of A Home, for a partner's expenses.

See a detailed discussion of Partner's Unreimbursed Expenses, article.

 
This article was written by Donald M. Scherzi, CPA, CFP, LLC
Mike Lupo, SCORE Counselor
Visit us at: www.scoresouthflorida.net

Monday, April 2, 2018

The Value of a Deal


I recently saw a great sale on watches. Not those offered on the streets in some cities, but an unusually good deal in any event. I did not really need another watch, but I fell for the deal, and purchased one. It had the main watch dials as well as two smaller dials and a few added controls on the side. It took a while to get the band sized to fit with the help of the seller. I actually could not see the smaller dials without my glasses, which I did not have in my possession at the time of sale. When I got home and had some time I looked closer and determined that the two small dials and controls were decorative only, without functionality at all. The next day I returned to the seller and asked about this and he responded: “what do you expect for that price?”  He was right. The deal was just that…

He also took the watch back and returned my money. OK seller…of TRASH…and I should have knowm better…

How about your products and/or service?

 
Steve Koenig, SCORE Counselor


 

 

Un-reimbursed Partner Expenses

 

Under the general rule, a partner in partnership is NOT allowed to deduct un-reimbursed partnership expenses (partnership business expenses paid by the partner that the partner is not reimbursed for) on his/her individual tax return.

An exception applies when there is a provision in the partnership agreement requiring the partner to pay the specific expenses.

Each partner's Schedule K-1 should indicate in Box 20, Code Z along with a statement that the amount is for “UPE”.

Allowable expenses are deducted on Part II, Schedule E, Form 1040 of the partner's individual income tax return.

Report allowable un-reimbursed partnership expenses as a separate item on Line 28, Schedule E. Enter “UPE” as the name of the line item, then list the amount on (h) of line 28.

The “UPE” amount will be deducted from partnership income and will also reduce the net income subject to self-employment tax.

Audit Tip:

Include the requirement that the partners pay the specific expenses in the written partnership agreement to help ensure deductibility in case of an IRS Audit. Also include wording that the partnership will not reimburse the partners for the expenses.

This article was written by Donald M. Scherzi, CPA, CFP, LLC
Mike Lupo, SCORE Counselor
Visit us at: www.scoresouthflorida.net