Google+ Followers

Wednesday, April 13, 2016

Finance 6 How to Deduct Business Use of an Automobile



If you use your car 100 % in your job or business, you may deduct its entire cost of operation (subject to certain limits on depreciation). However, if you use your car for both business and personal purposes, you may deduct only the cost of its business use (business percentage use).



You can figure the amount of your deductible car expense by using one of two methods; the Standard Mileage Rate Method or the Actual Expense method.

Under the Standard Mileage Rate Method, simply multiply the number of business miles for the year by the IRS amount allowed per business mile (which changes each year) to figure your deduction. You may also deduct business parking fees and road tolls. You cannot deduct any other car expenses.

To use the Standard Mileage Rate Method;

For a car you own, you must choose to use it in the first year the car is available for use in your business. In later years, you can choose to use the standard mileage rate method or the actual expense method.

For a car you lease, you must use the standard mileage rate method for the entire lease term (including renewals).

You must not operate 5 or more cars at the same time.

You must not have claimed a depreciation deduction for the car using any method other than straight line.

You must not have claimed a Section 179 deduction on the car.

You must not have claimed the special depreciation allowance on the car.

To use the Actual Expense Method:

You must keep detailed records of the actual costs to operate the car including gas, oil, repairs, maintenance, interest, insurance, registration fees, licenses, and depreciation (within limits) or lease payments. You may also deduct business parking and road tolls.

Finally, the law requires that you document and substantiate your business use of a car by keeping adequate records for all carexpenses, total mileage, business mileage, and personal mileage for the year.

 

This  article was written by  Donald M. Scherzi, CPA, CFP, LLC

Mike Lupo, SCORE Counselor

Wednesday, April 6, 2016

Selling Up



Here is an example of a practice that can either lead to added sales or backfire and hurt your business.

 

First you offer a service and either provide a no cost upgrade for one year, or provide an automatic renewal after the first year (at full price). At the end of the first year you bill the customer for the second year at the new rate. The customer may simply appreciate the service and pay the incremental cost. On the other hand the reaction may be very different, leading to an irate customer and possibly a lost customer that will talk up the negative issue.

 

One thing that can help is to make the cancellation as painless as possible. Maybe you can cut the added service out but keep the primary business and look to sell up later.

 

In one case a customer waited over 30 minutes on the phone to resolve the issue, during which time he decided to cancel the entire business with the firm. He may have simply cancelled the added service if the wait time had been reasonable.

 

The choice is yours.

 

 

Steve Koenig, SCORE Counselor


 

 

Saturday, April 2, 2016

Finance 5 Retirement Plans for Small Business Owners



Small business owners have many options when it comes to setting up retirement plans for both themselves and their employees.

 

Some of the more common retirement plans available to small business owners include Traditional IRA's, SEP-IRA's, and SIMPLE-IRA's, and ROTH IRA's.

 

Whether a small business operates as a sole proprietorship (self employed individual), a partnership, a Limited Liability Company, or a Regular or an S Corporation, the benefits of contributing to a retirement plan are numerous.

 

First, the contributions are tax deductible, which lower income taxes. Second, the earnings grow tax-deferred. Third, the business owner is setting money aside for a more secure retirement.

 

And, to encourage people age 50 or older to save even more for retirement, catch-up contributions are allowed for some plans.

 

Each IRA generally has its own rules regarding when it must be set up to be effective for a particular year, the maximum contributions and deductions allowed for a given year, due dates for making a contribution, which employee's must be covered under the plan, when required minimum distributions must begin, which penalties may apply for early distributions, and exceptions to the penalty for early distributions.

 

The tax laws often change each year regarding the specifics for each type of plan, so that the business owner will want to keep current regarding changes applicable to their type of IRA.

 

All things said, setting up and contributing to a retirement plan each year is a win win situation.

 


This  article was written by  Donald M. Scherzi, CPA, CFP, LLC

 

Mike Lupo, SCORE Counselor

 


 

Friday, April 1, 2016



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:


PHIL VOLUCK  

 

Phil is the sort of guy that, when you meet him, you know you’ve met a savvy business owner and entrepreneur. His background fully supports that, too. Phil started his business career by thinking he’d be happy being a pharmacist, but the entrepreneurial drive soon reared its head, and he was off on a 30+ year career highlighted by becoming President of Nutri-System AND Jenny Craig International, plus a few other choice and successful business ventures.
 Here at SCORE, Phil has really committed himself to serving entrepreneurs of all ages (literally). Phil has been and continues to be part of our Young Entrepreneurs Academy Mentors Team, assisting students 12-18. Then there’s his seminar work at the Lynn University International Business Center, where he interfaces with entrepreneurial-minded students, sharing his experiences, knowledge, and wisdom. And finally, Phil has played a tremendous role in mentoring incubator businesses at the FAU Tech Runway. In fact his role there, along with John  Ahearn, has so impressed FAU leadership, we are about to dramatically expand our chapter’s role in their programs.
And, of course, it goes without saying that Phil’s office clients are blessed by his commitment to them. As an example, Phil literally wrote an entire Business Plan to assist a client who desperately needed one but could not do it on his own.
 We are very proud of you Phil; you truly make us shine. And it is with great pride that we announce your selection as our Special Counselor for April, May, and June.