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Wednesday, January 22, 2014

Should I buy a Franchise?

Franchising is a method of distributing products or services. It is not for everyone. You should first determine if it is right for you.

If you are a driven individual motivated to succeed and train others, as are most successful entrepreneurs, you may find this a potential avenue. You should have experience in the industry you are examining and be willing to spend effort promoting the brand, which, after all, is a major objective of the franchisor. Customers are attracted to the brand rather than the owner of the business.

Your ability to be innovative may be constrained by the franchisor. So if this is important to you, franchising may not be the answer. The rules are determined by the franchisor.

There are a plethora of franchise options to select from. Your research should discover the differences. Remember not all franchises are good franchises.  As you do this research you should have support from a qualified accountant, banker and attorney to assist in the selection as well as the development of the business.

Keep the following in mind:

The franchisor may have goals that differ from yours. You want to develop a viable business, they want to sell franchises.

The people that sell the franchise to you may not be the people that can help your business succeed.


Steve Koenig, SCORE Counselor

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Monday, January 6, 2014

Tax Changes for 2014 Individuals Checklist


Filing Season Delayed by 10 Days

Taxpayers should note that the 2014 tax season opens on Jan. 31, 2014.

In most years, the filing season opens on Jan. 21; however, due to the 16-day government shutdown that took place in October 2013, the filing season is delayed by 10 days this year. No returns, paper or electronic, will be processed by the IRS before this date.

The April 15 tax deadline is set by statute and will remain in place, although taxpayers can request an automatic six-month extension to file their tax return. If you think you need an extension, please let us know.


For 2014, more than 40 tax provisions are affected by inflation adjustments, including personal exemptions, AMT exemption amounts, and foreign earned income exclusion, as well as most retirement contribution limits.

For 2014, the tax rate structure, which ranges from 10 to 39.6 percent, remains the same as in 2013, but tax-bracket thresholds increase for each filing status. Standard deductions and the personal exemption have also been adjusted upward to reflect inflation. For details see the article, "Tax Brackets, Deductions, and Exemptions for 2014," below.

Alternative Minimum Tax (AMT)
Exemption amounts for the AMT, which was made permanent by the American Taxpayer Relief Act (ATRA) are indexed for inflation and allow the use of nonrefundable personal credits against the AMT. For 2014, the exemption amounts are $52,800 for individuals ($51,900 in 2013) and $82,100 for married couples filing jointly ($80,800 in 2013).

"Kiddie Tax"
For taxable years beginning in 2014, the amount that can be used to reduce the net unearned income reported on the child's return that is subject to the "kiddie tax," is $1,000 (same as 2013). The same $1,000 amount is used to determine whether a parent may elect to include a child's gross income in the parent's gross income and to calculate the "kiddie tax". For example, one of the requirements for the parental election is that a child's gross income for 2014 must be more than $1,000 but less than $10,000.

For 2014, the net unearned income for a child under the age of 19 (or a full-time student under the age of 24) that is not subject to "kiddie tax" is $2,000.

Health Savings Accounts (HSAs)
Contributions to a Health Savings Account (HSA) are used to pay current or future medical expenses of the account owner, his or her spouse, and any qualified dependent. Medical expenses must not be reimbursable by insurance or other sources and do not qualify for the medical expense deduction on a federal income tax return.

A qualified individual must be covered by a High Deductible Health Plan (HDHP) and not be covered by other health insurance with the exception of insurance for accidents, disability, dental care, vision care, or long-term care.

For calendar year 2014, a qualifying HDHP must have a deductible of at least $1,250 for self-only coverage or $2,500 for family coverage (unchanged from 2013) and must limit annual out-of-pocket expenses of the beneficiary to $6,350 for self-only coverage (up $100 from 2013) and $12,700 for family coverage (up $200 from 2013).

Medical Savings Accounts (MSAs)
There are two types of Medical Savings Accounts (MSAs): the Archer MSA created to help self-employed individuals and employees of certain small employers, and the Medicare Advantage MSA, which is also an Archer MSA, and is designated by Medicare to be used solely to pay the qualified medical expenses of the account holder. To be eligible for a Medicare Advantage MSA, you must be enrolled in Medicare. Both MSAs require that you are enrolled in a high deductible health plan (HDHP).

Self-only coverage. For taxable years beginning in 2014, the term "high deductible health plan" means, for self-only coverage, a health plan that has an annual deductible that is not less than $2,200 (up $50 from 2013) and not more than $3,250 (up $50 from 2013), and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $4,350 (up $50 from 2013).

Family coverage. For taxable years beginning in 2014, the term "high deductible health plan" means, for family coverage, a health plan that has an annual deductible that is not less than $4,350 (up $50 from 2013) and not more than $6,550 (up $100 from 2013), and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $8,000 (up $150 from 2013).

AGI Limit for Deductible Medical Expenses
In 2014, the deduction threshold for deductible medical expenses remains at 10 percent (same as 2013, but up from 7.5 percent in 2012) of adjusted gross income (AGI); however, if either you or your spouse were age 65 or older as of December 31, 2013, the new 10 percent of AGI threshold will not take effect until 2017. In other words, the 7.5 percent threshold continues to apply for tax years 2013 to 2016 for these individuals. In addition, if you or your spouse turns age 65 in 2014, 2015, or 2016, the 7.5 percent of AGI threshold applies for that year through 2016 as well. Starting in 2017, the 10 percent of AGI threshold applies to everyone.

Eligible Long-Term Care Premiums
Premiums for long-term care are treated the same as health care premiums and are deductible on your taxes subject to certain limitations. For individuals age 40 or younger at the end of 2014, the limitation is $370. Persons more than 40 but not more than 50 can deduct $700. Those more than 50 but not more than 60 can deduct $1,400, while individuals more than 60 but not more than 70 can deduct $3,720. The maximum deduction $4,660 and applies to anyone more than 70 years of age.

Medicare Taxes
The additional 0.9 percent Medicare tax on wages above $200,000 for individuals ($250,000 married filing jointly), which became effective last year, in 2013, remains in effect for 2014, as does the Medicare tax of 3.8 percent on investment (unearned) income for single taxpayers with modified adjusted gross income (AGI) more than $200,000 ($250,00 joint filers). Investment income includes dividends, interest, rents, royalties, gains from the disposition of property, and certain passive activity income. Estates, trusts and self-employed individuals are all liable for the new tax.

Foreign Earned Income Exclusion
For 2014, the foreign earned income exclusion amount is $99,200, up from $97,600 in 2013.

Long-Term Capital Gains and Dividends
In 2014 tax rates on capital gains and dividends remain the same as 2013 rates; however threshold amounts are indexed for inflation. As such, for taxpayers in the lower tax brackets (10 and 15 percent), the rate remains 0 percent. For taxpayers in the four middle tax brackets, 25, 28, 33, and 35 percent, the rate is 15 percent. For an individual taxpayer in the highest tax bracket, 39.6 percent, whose income is at or above $406,750 ($457,600 married filing jointly), the rate for both capital gains and dividends is capped at 20 percent.

Pease and PEP (Personal Exemption Phaseout)
Both Pease (limitations on itemized deductions) and PEP (personal exemption phase-out) have been permanently extended (and indexed to inflation) for taxable years beginning after December 31, 2012, and in 2014, affect taxpayers with income at or below $254,200 for single filers and $305,050 for married filing jointly.

Estate and Gift Taxes
For an estate of any decedent during calendar year 2014, the basic exclusion amount is $5,340,000, indexed for inflation (up from $5,250,000 2013). The maximum tax rate remains at 40 percent. The annual exclusion for gifts also remains at $14,000.

Individuals - Tax Credits

Adoption Credit
In 2014, a non-refundable (only those individuals with tax liability will benefit) credit of up to $13,190 is available for qualified adoption expenses for each eligible child.

Earned Income Tax Credit
For tax year 2014, the maximum earned income tax credit (EITC) for low and moderate income workers and working families rises to $6,143, up from $6,044 in 2013. The credit varies by family size, filing status and other factors, with the maximum credit going to joint filers with three or more qualifying children.

Child Tax Credit
For tax year 2014, the child tax credit is $1,000 per child.

Child and Dependent Care Credit
If you pay someone to take care of your dependent (defined as being under the age of 13 at the end of the tax year or incapable of self-care) in order to work or look for work, you may qualify for a credit of up to $1,050 or 35 percent of $3,000 of eligible expenses in 2014. For two or more qualifying dependents, you can claim up to 35 percent of $6,000 (or $2,100) of eligible expenses. For higher income earners the credit percentage is reduced, but not below 20 percent, regardless of the amount of adjusted gross income.

Individuals - Education

American Opportunity Tax Credit and Lifetime Learning Credits
The American Opportunity Tax Credit (formerly Hope Scholarship Credit) was extended to the end of 2017 by ATRA. The maximum credit is $2,500 per student. The Lifetime Learning Credit remains at $2,000 per return.

Interest on Educational Loans
In 2014 (as in 2013), the $2,500 maximum deduction for interest paid on student loans is no longer limited to interest paid during the first 60 months of repayment. The deduction is phased out for higher-income taxpayers with modified AGI of more than $65,000 ($130,000 joint filers).

Individuals - Retirement

Contribution Limits
The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan remains unchanged at $17,500. Contribution limits for SIMPLE plans remains unchanged at $12,000. The maximum compensation used to determine contributions increases to $260,000 (up $5,000 from 2013).

Income Phase-out Ranges
The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are covered by an employer-sponsored retirement plan and have modified AGI between $60,000 and $70,000, up from $59,000 and $69,000 in 2013.

For married couples filing jointly, in which the spouse who makes the IRA contribution is covered by an employer-sponsored retirement plan, the phase-out range is $96,000 to $116,000, up from $95,000 to $115,000. For an IRA contributor who is not covered by an employer-sponsored retirement plan and is married to someone who is covered, the deduction is phased out if the couple's modified AGI is between $181,000 and $191,000, up from $178,000 and $188,000.

The modified AGI phase-out range for taxpayers making contributions to a Roth IRA is $181,000 to $191,000 for married couples filing jointly, up from $178,000 to $188,000 in 2013. For singles and heads of household, the income phase-out range is $114,000 to $129,000, up from $112,000 to $127,000. For a married individual filing a separate return who is covered by a retirement plan, the phase-out range remains $0 to $10,000.

Saver's Credit
In 2014, the AGI limit for the saver's credit (also known as the retirement savings contribution credit) for low and moderate income workers is $60,000 for married couples filing jointly, up from $59,000 in 2013; $45,000 for heads of household, up from $44,250; and $30,000 for married individuals

 Barry Eisenberg, SCORE Counselor
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Tax Changes for 2014 Business Checklist


Standard Mileage Rates
The rate for business miles driven is 56 cents per mile for 2014, down from 56.5 cents per mile in 2013.

Section 179 Expensing
For 2014 the maximum Section 179 expense deduction for equipment purchases decreases to $25,000 of the first $200,000 of business property placed in service during 2014. The bonus depreciation of 50 percent is gone, as is the accelerated deduction, where businesses can expense the entire cost of qualified real property in the year of purchase.

Transportation Fringe Benefits
If you provide transportation fringe benefits to your employees, in 2014 the maximum monthly limitation for transportation in a commuter highway vehicle as well as any transit pass is $130 down from $245 in 2013. The monthly limitation for qualified parking is $250.

Barry Eisenberg, SCORE Counselor
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Let The Good Times Roll!!

Reflecting on his eight years as Chairman of the Federal Reserve, Ben Bernanke was quoted as saying: “The combination of financial healing, greater balance in the housing market, less financial restraint, and, of course, continued monetary policy accommodation bodes well for US economic growth in coming quarters”.

Is your business part of the good times?

Is your business positioned to take advantage of the pending growth?

Ask yourself why not? Then what can you do to make it so?

Steve Koenig, SCORE Counselor



Thursday, January 2, 2014

In Store Salesperson





                                 - OR TO CREATE A PHYCHOLOGICAL NEED FOR A PRODUCT.


     1 - GREETING





     6 - CLOSE

     7 - FOLLOW UP


Herb Douglas, SCORE Counselor

Special Counselor of the Month


We are delighted to shine the spotlight on a distinguished member of our staff who by his or her efforts brings great credit to our organization. This month we are honored to salute:


Sunil Malik joined our Chapter in 2012. Behind him was an extraordinary 30 years in global finance, with a long and distinguished career as a high ranking executive with J.P. Morgan, Fannie Mae, Ocwen Financial, and as Global Asset Management Executive for ETrade. So when he became an official member of our Chapter we knew we had brought aboard a very special Counselor who would be of immeasurable value to many of our clients.
And that has been exactly the case. With boundless energy, an instant ability to understand and solve complex business problems, Sunil has proven himself invaluable to a growing legion of clients. Even when he has had to miss a session with a virus, Sunil is on the phone, doing everything he can to move clients’ plans forward.
It doesn’t stop there. Sunil has spent countless hours at clients’ businesses, providing onsite guidance and mentoring. And then backing everything up by calling his clients to doublecheck the action plan is being followed.
It doesn’t stop there, either. In addition to all his other duties, Sunil is a volunteer member of our YEA Team (Young Entrepreneurs Academy), where he Mentors students ages 11-18 who are involved in starting and operating their own businesses. Most agree American innovation and entrepreneurship are crucial to our nation’s future, and Sunil is playing an important role in encouraging and supporting that concept.
Congratulations Sunil on being elected Special Counselor of the Month for January, February and March 2014. You will recall you were told during your training that we wanted you on the Team if you could make us a better Chapter. Take a bow, for you have done that, with flying colors!

Wednesday, January 1, 2014

Export Success?

(comparing sales data in the U.S. to the target market):
Ask yourself these questions specifically as they apply to your products.


1 What role does environment play?
EX: How are climate & geographics different than in the U.S.

2. Is the target market stagnant or growing?
In a maturing mkt. price may be the ONLY factor.

3. What are the issues that trigger a sale?
Technology may have no effects in market viability.

4. Does environment affect product usage?
Accustomed usage or strangeness will point to success.

5. Culture, application, and/or utility perceived will result in market entry options
Cosmetics may be useless in a market where makeup is derided.

6. Application (usage) is totally diverse from the U.S. domestic market.
Fashion as in sunglasses - beach, ski, city - where are these factors?

7. Who is user? Who is the supplier?
Distribution channels, direct, big box, etc. Which over there?

8. Why is the product used?
Will it be the same over there? Is health a condition, etc.

9. Finally, perception of acceptance.
As a consumer driven society what we see here as necessity may be a luxury.

Understanding these nuances will provide an inkling of how to approach the foreign market for the most successful entry.

SCORE Chapter 412
So. FL Boca Raton
>>>> One-on-One PERSONAL help available:<<<<<
Hank Samuel
visit us at:


New Year"s Resolution

Well, here we are, a new year has begun. It is time for resolutions, hopefully those that can and will be kept. Have you made any business resolutions for this year?

Not sure what resolutions to make? Time to expand your business? Time to sell? Time to develop a new business concept? Time to improve the business in some way? Time to improve or learn a skill? Check the articles on this BLOG for some ideas.

This BLOG has been brought to you by the Counselors of South Palm Beach SCORE. We hope you have gained from it.

Use this time of year as an opportunity to reflect and plan ahead.

May your business be successful in the New Year!

Steve Koenig, SCORE Counselor