Simplified Option for Home Office Deduction in 2013

 

If you're one of the more than 3.4 million taxpayers claimed deductions for business use of a home (commonly referred to as the home office deduction), you might be interested in the new simplified option available for taxpayers starting with the 2013 return most taxpayers file early in 2014.

The new optional deduction, recently announced by the IRS, is capped at $1,500 per year based on $5 a square foot for up to 300 square feet. It is expected to reduce the paperwork and recordkeeping burden on small businesses by an estimated 1.6 million hours annually.

Currently, taxpayers claiming the home office deduction are generally required to fill out a 43-line form (Form 8829) often with complex calculations of allocated expenses, depreciation and carryovers of unused deductions. Taxpayers claiming the optional deduction will complete a significantly simplified form.

Though homeowners using the new option cannot depreciate the portion of their home used in a trade or business, they can claim allowable mortgage interest, real estate taxes and casualty losses on the home as itemized deductions on Schedule A. These deductions need not be allocated between personal and business use, as is required under the regular method. Business expenses unrelated to the home, such as advertising, supplies and wages paid to employees are still fully deductible.

Current restrictions on the home office deduction, such as the requirement that a home office must be used regularly and exclusively for business and the limit tied to the income derived from the particular business, still apply under the new option.

If you need more details about the new simplified home office deduction for tax year 2013, don't hesitate to give us a call. We're here to help

Barry Eisenberg, SCORE Counselor, email: barrye003@aol.com

visit us at: www.scoresouthflorida.net

 

Why the Phone Keeps Working During a Power Failure

I thought I would write this one as the first storm of the season hit Florida...It might help.

A recommendation has been made to the Federal Communications Commission (FCC) that by 2018 it should phase out traditional phone service, known as the public switched telephone network (PSTN). HOLD ON…THAT IS JUST 5 YEARS FROM NOW!

Some of the providers of PSTN say regulations require maintenance of outdated infrastructure, hinders progress and ties up money that could be better invested in new technology. Besides, they say use is on a downward trend. Some small companies question the motivation, saying it is likely an effort to allow these companies to operate in a less-regulated Internet-based telephone environment.

While it is true that use is dropping off, many people keep traditional phones in case of emergencies. If you have to plug your phone or phone system into a power plug, you will lose service when the power goes out. How will that impact your business?

With a traditional phone the only connection is the single plug (RJ11 for POTS, Plain Old Telephone Service) that brings both power (50 VDC) and signals to your phone from a telephone switching center. The wires to your phone are unique to you, unlike the shared wires that bring the 120 VAC power to your home. More often than not the phone lines are run underground and not as susceptible to storm or accident damage as are power lines. When the power goes down the phone company provides generators for its switching operations that keep the system and your traditional phone operational. Remember, if your phone requires a separate power source, as most do today, it will not operate under these conditions. This is a case where older is better.

Cell towers also use generators to deal with power outages so long as the cell towers are operational, but the mobile devices depend on batteries that need to be recharged.

Remember that wireless works only when the power is up and the batteries in mobile devices hold on as well.

Maybe in five years the technology will move on to help with this.

What exposure does your business have to power failures? Do you have a plan to deal with this? If you are operating when your competition is not…you have a competitive advantage. But think about all those others in your supply chain. Can they stop your business? Select those that won’t.

 

Steve Koenig, SCORE Counselor

Visit us at: www.scoresouthflorida.net

 

 

Disaster Recovery SBA Webinar

 

A friend sent me an SBA announcement of a Webinar that looks interesting, so I am posting some of the details here for you

Are You Ready to Lead Your Company Through a Crisis?

Tips Shared at Free Webinar Hosted by SBA and Agility Recovery

The ability to properly lead becomes increasingly difficult in times of disaster. So in addition to making a preparedness plan, it’s also a good idea to discover ways to take charge while staying focused on what’s important—the safety of your employees and clients, and a speedy recovery for your business

Join Agility Recovery and the U.S. Small Business Administration in a live online discussion on Tuesday, June 11 with former FEMA Administrator David R. Paulison. He’ll talk about joining FEMA in the aftermath of Hurricane Katrina, how he managed the leadership challenges, and will provide tips on how to become a capable manager who is prepared for any kind of disaster.

What:

“Leading With Resilience During a Disaster—A presentation led by David R. Paulison, former FEMA Administrator, followed by a Q&A session

When:

Tuesday, June 11 – 2:00 p.m. to 3:00 p.m. EDT

how:

Register at https://www1.gotomeeting.com/register/927724801

I do not know Agility Recovery and cannot take a position on the firm or its services.

I do believe the subject matter is important for small business owners.

 

Steve Koenig, SCORE Counselor

Visit us at: www.scoresouthflorida.net

 

 

Keys to Exporting Success

Exporting offers many job opptys. for economists, financial specialists and technicians. The all have a role to play in foreign trade. But the art of selling and marketing remains the backbone of Int'l. Trade.

TALK TO THEM SO THEY CAN UNDERSTAND YOU.

FIRST, there is no substitute for language proficiency. It is the one thing above all that will bring success when dealing with the buyer oversees. Take a reverse example of a foreign person seeking to enter the U.S. market with imported mdse. They ALL speak English. They would no more think of doing business here like a non-swimmer would attempt to swim the English Channel if they didn't know how to speak English.

There are al half-dozen languages that constitute the argot of trade in Multinational business today. English is numero uno. Then Spanish, French, Mandarin Chinese, Russian. Not necessarily in that order but all active. German is not included as English is a native tongue in Germany. Italian is limited mainly to a small sector.

Globally, Spanish is widespread. Latin Americans generally are not fluent t in English. Portuguese is like Italian - a narrow sector but important due to Brazil being such an important emerging business area. You can get along in the Middle East with English as the business community is generally trained in the west - UK, USA, etc and have acquired English as their business language. If they can understand you the battle is overcome.


KNOW THE MECHANICS OF WORLDWIDE TRADING METHODS.

This can be defined by such prosaic elements as collection instruments, , documentary rqmts., selling/buying habits that vary by country & region, logistics of how to get it there, and the all important aspects of how to handle an order from quotation to the billing cycle. Take a seminar: "ABC's of EX;ORT" from a SCORE CHAPTER 0412.

When dealing with a customer over there you MUST know the social norms & customs. Did you know if show the sole of your show to an Arab client accidentally because you crossed your legs, you have insulted that client? Do you know how low to bow in Japan?

There is help out there. Develop a relationship with your bank. They can assist you when it comes time to getting paid. Sign up an Int'l. Freight Forwarder to handle the shipment from your door to your clients place. The forwarder also can prepare all documents needed to be certain that the client overseas will have no prblm. bringing your products thru their local customs. Talk to your insurance agent to be certify you are protected against loss/theft in transit. These are all service people from whom you can learn to do business in the worldwide market place.

For more help contact Hank.Samuel2@gmail.com
Certified counselor of scoresouthfloriida.com
Chapter 412 Boca Raton FL
visit us at: www.scoresouthflorida.net

Growing a Business in Tough Times

When times are tough some businesses struggle while others grow. Some important considerations are:

1. You are not always the expert - Know your limitations. Seek advice.
2. Shrink or Grow – Best answer may be to grow.  
3. Over Communicate – Good partners can provide resources.
4. Gain Influence - Share information. Win customers with knowledge.
5. Watch the money – Available cash to fund opportunities. Leverage borrowing.
6. Don’t get sidetracked – Stick to your goal. Know when to change or sell.

How will you make it next time? Do you have a plan?

Steve Koenig, SCORE Counselor

Visit us at www.scoresouthflorida.net

 

 

Is e-commerce as easy as it looks?

 

It seems that everyone is selling on the Internet. You can find everything from unusual books to used cars, from home mortgages to hard-to-find items. And as online shopping becomes more of a habit and less of a novelty, more people will let their “mice” do the walking.

You may feel that your business belongs in this cyber-market. But remember that e-commerce is not for everybody, nor is every product or service suitable to be sold online. Like any other market, e-commerce requires research, analysis, planning and a significant investment in technology. Even then, the benefits may not always outweigh the costs.

Think carefully about the benefits. Among these could be improved competitiveness, reaching more potential purchasers, higher volumes, lower costs, different skills…etc.

With e-commerce you are not alone. You are a part of a many player operation. Among these are the customers, the sellers, the suppliers, the payment processing operation(s) as well as the technology suppliers.

 Is your company ready to take the leap into the world of e-commerce? Find out by taking this quick quiz.

1) Does your company currently have an Internet presence?

2) Do you have an IT staff and/or budget?

3) Are your product/service offerings easily bundled and priced?

4) Do you currently accept credit card payments from your customers?

5) Do you have established supply and delivery chains?

 

How did you do with your answers?

Mostly YES: You sound ready to begin developing an e-commerce strategy

Evenly Yes & No: Take a long hard reexamination of your customers, infrastructure, list of hardware/Software as well as supply chains

Mostly NO: You have some of the pieces, but need to mature systems & processes. Consult with experts you trust.

 

Steve Koenig, SCORE Counselor

Visit us at: www.scoresouthflorida.net

 

Impact of Oklahoma Tornado

 

Maybe you do not think that the Oklahoma tornado that destroyed a town has an impact on your small business…think again.

 

The people from this Oklahoma community could:

Have been planning a vacation in your area

Purchase your product or service though a store or on line

Warehouse or drive a vehicle that delivers your supplies or products.

Or maybe your deliveries need to travel through this area.

 

In two days of March 2012 over 600 major storm warnings were forecast for the states just north and west of Florida. In two days of April 2011 this number was over 1400.

Not only is South Florida exposed to major storms each year but on average Florida gets 55 Tornados a year…The same as Kansas

 

Hope this makes you think about your plans for disasters that could impact your business.

 

Steve Koenig, SCORE Counselor

Visit us at: www.scoresouthflorida.net