Getting Things Right

I have an old inflatable dingy with the material around the oar locks deteriorating in such a way that anything or anyone that brushed against this area came away with black stains. Clothing, hands, arms, legs, etc. all stained black. This apparently comes about after years of use. The manufacturer was no longer in business. There is some advice on line suggesting adding oil, others suggested using a wax covering. Nothing seemed to work. At one point I even had a set of covers made to reduce exposure to these areas. I was emotionally attached to this inflatable that I purchased new a long time ago.

After a long search and discussion with friends, I finally found a local company that sells and services inflatable dinghies. After discussing the issue over the telephone, the business owner suggested that his staff was creative and would like to see the problem. My first reaction was that a possible solution was near, and I was thankful, even though this business was not located near an ocean, river, bay or any body of water at all.

A few weeks later I was able to transport the inflatable overland to the business so they could see the problem. Their initial reaction was not positive. The age of the dingy was a factor. A sales person suggested purchasing a new one for about $2500.00. One of the service managers said, there was a possibility of damaging the inflatable with some of the approaches I suggested. He also stated that they could try but would not warranty the work and suggested a price of about $600.00 to possibly create a repair as parts were no longer available from the manufacture. I asked that they try, but that the price suggested was more than I thought I would have to spend.

Three days later I received a phone call from the administrator of the business and she told me the work was completed. She informed me that they were able to locate a paint material and glue it in place over the faulty area of the inflatable, and the cost was just under $200.00, including a full check out of the dingy.  Wow, was I pleasantly surprised.

The service manager told me he came up with this solution after thinking about the problem for a while. I thanked him profusely.

I have already recommended a number of people use this firm.

 

How creative are your employees? Do you promote their skills?

 

Steve Koenig, SCORE Counselor

Visit us at: www.scoresouthflorida.net

 

 

S Corporation Tax Returns Requirements & Penalties

 

Because the penalties for timely filing a required S Corporation Tax Return, Form 1120S are steep, the following information will help you avoid expensive, and very often unexpected IRS penalties.

 

 

S Corporation Tax Return Filing

 

An S Corporation is REQUIRED to file Form 1120S for EACH tax year that the election to be treated as an S Corporation is in effect, REGARDLESS of whether the S Corporation has taxable income for that year.

 

Form 1120S is due on or before the 15^th day of the 3^rd month following the close of the tax year, (March 15^th for a calendar-year S Corporation).

 

An S Corporation may obtain an automatic 6 month extension of time to file Form 1120S by filing Form 7004 on or before the due date of its tax return.

 

AN S Corporation must provide EACH shareholder a copy of the information shown on Schedule K-1 that is attached to Form 1120S. Schedule K-1 must be provided on or before the day the S Corporation files Form 1120S.

 

Failure to File Penalties

 

An S Corporation that fails to timely file Form 1120S (or files an incomplete tax return) is liable for a penalty of $195 PER SHAREHOLDER , PER MONTH for a maximum of 12 months, unless reasonable cause is shown.

 

Reasonable cause depends on the facts and circumstances of why the tax return was filed late and is the responsibility of the S Corporation Shareholder(s) to prove to the IRS. Examples such as the death of a shareholder or a shareholders family member, a natural disaster, a major illness or disability, a bona-fide financial hardship, destruction of business records, etc. may allow the IRS to forgive or reduce late filing penalties.

 

An S Corporation may also be subject to penalties for failure to furnish Schedules K-1 to its shareholders, unless reasonable cause can be demonstrated.

 

 

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

Counseling for Business Success

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Get a Marketing Intern from an area college to take you on as a client. It will give the intern experience and provide you with some free marketing help. And you’ve got some great Business Schools right here in FAU and Lynn.

Martin Kahn - SCORE Counselor
visit us at: www.scoresouthflorida.net

How to lose customers

Recently I had the need to check the air in the tires of my car. I attempted to use an air machine installed at a local gas station. The machine took my credit card and charged $1.50 for a few minutes. On the first tire it became obvious that the machine was not functioning.

The attendant in the convenience store at the gas station, to which the air machine is attached, said they had nothing to do with the air machine and refused to either take note of the failed machine or provide a credit. I left and went to another gas station/convenience store with yet another air machine that functioned properly, for a fee of $0.50. That’s right one third of the cost and it worked!

Guess where I buy my gas and other items now. Want to guess where I tell my friends to stay away from?

I also found a local ‘service’ station with free air.

How about your business?

Steve Koenig, SCORE Counselor

Visit us at: www.scoresouthflorida.net

 

 

 

 

You Get The Business

Here is a case of the early bird winning the race.

My wife noticed that the washing machine water mixing valve was leaking. I checked and we determined that the valve needed replacement. We felt it was best to have a plumber handle the task. We called the plumber normally used by our association and were told they could get to it in about three weeks! Our Property Manager suggested two other plumbers. We called. One said they were not taking on any new clients! Two had answering machines on which I described the job and requested a return call. One of the answering machines had a recorded message: “we respond to emergencies and normal repairs”. Eight hours later, neither returned my call. But we did not wait around. We found a plumbing franchise that said they could do the job. They also had their technician call to determine if he had the part on his truck. He did! We possibly paid a bit more, but the job was done with a one year warranty on parts and labor. We called back the firm that schedule us for three weeks out, and told them to cancel it. We also left a message for the firm that said they did emergency work and told them then needed to delete that.

How responsive is your business?

 

Steve Koenig, SCORE Counselor

Visit us at: www.scoresouthflorida.net

 

Accounting Periods

Taxable income is computed on the basis of a taxpayer's tax year.

Tax Year of 12 Months

A tax year is the annual accounting period regularly used by a taxpayer in keeping books and records to compute income.

There are two common accounting periods.

1-Calendar Year (a period of 12 months ending on December 31).

2-Fiscal Year (a period of 12 months ending on the last day of any month other than December).

Short Tax Year

A short tax year is a period of less than 12 months and is common when a new business comes into existence after January 1 of its initial year and or when a business closes sometime during its last year in existence other than on December 31.

Keeping Business Records

A taxpayer should keep business records based on the accounting period used for computing taxable income when filing income tax returns.

Certain business entities MUST use a specific accounting period prescribed by the IRS

An S Corporation or a Personal Service Corporation must use a calendar year unless the entity can establish a business purpose for having a different tax year. A Partnership must use the same tax year as that of its owners, unless the entity can establish a business purpose for having a different tax year.

 

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