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Quick quiz
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Each month I'll give you a new question.
Just reply to this email for the answer.
What "heavenly" event coincides with the first day of spring? |
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Consider Current Year When Reporting Last Year’s Taxes
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As the deadline passes for payment of income tax on last year’s income, immediate attention should be directed at addressing tax on income that’s being earned this year. The government imposes penalties when income tax is not remitted throughout the year. Although wage-earning employees satisfy this obligation through paycheck withholding, entrepreneurs are confronted with the duty of making their own calculations and sending estimated tax payments. The first of these payments for this year is due on the same date as the deadline for last year’s tax return.
This year’s estimated tax amounts are ideally determined from a projection of business income. This is easily identified if you prepared a current-year business budget. At the very least, projected income for this year can be derived from your taxable business income from last year. Simply identify whether you expect to generate more or less income than last year. A common expectation is that this year will be about the same. Your tax accountant can calculate estimated tax payments for this year based on the expected business income and your other income sources.
Two other methods for determining estimated tax installments are available. One is a complex form with your next tax return that shows your income during different periods throughout the year. Tax accountants can prepare it only if you maintain burdensome records. The other technique entails paying this year an amount of tax equivalent to last year. Even if you make substantially more income this year, you escape an underpayment penalty by making estimated tax payments your accountant identifies based on last year’s taxes.
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How to Win Big in Today's Economy
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The altered economic landscape presents innovative and nimble businesses
with opportunities to thrive.
Find out how by requesting my free
report "How to Win Big in Today's
Economy" by replying to this email.
Just reply to this email and I'll send it right out to you.
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Mastering the Art of Follow-Up: Simpler Than You Think
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Every business relationship starts with a connection, whether it’s a chance encounter or a planned event. It’s the next step, the follow-up, that’s crucial to networking etiquette and to reaping benefits from the relationship.
Get in the habit of following up immediately after a meeting or appointment.
If you wait days or weeks to follow up, the other person’s interest will have waned and memory will have faded. Any excitement, enthusiasm, or momentum generated in that initial encounter will have been lost.
Send a text or an email and mention a moment or a highlight from the conversation. Recall something funny, poignant, or insightful or a story the person shared with you. Call attention to a point of commonality or a specific moment from the conversation.
Without being presumptuous, ask the person for advice, guidance, or information. If done properly, this will acknowledge and indicate respect for the person’s knowledge, experience, or expertise. Alternatively, offer to make an introduction, provide a resource, or give a referral.
Do some research and get to know the person’s background. Use what you learn to make your communications relevant, to ask questions, and to show that you are genuinely interested in cultivating the relationship.
Schedule another meeting. Once you have established a rapport, maintain regular, meaningful online communication. When the time seems right, suggest another face-to-face meeting.
Following up is just as important as the first meeting. Taking the time and showing the initiative to nurture any relationship will help it blossom.
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Worth Reading
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Top 15 Best CRM Software for Small Businesses
By Erin Gilliam Haije
M Opinion
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For your business to grow, you need to grow and develop your customer relationships. But how do you keep track of correspondence, contact info, product preferences, and the like? It can be overwhelming. A customer relationship management (CRM) system can help you with all of that, and thankfully, there are plenty of CRM systems that can fit a small business’s needs and budget. Read the list here.
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How to Network
Like A Pro
By Lindsay Nahmiache
Forbes
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Establishing business relationships through networking is crucial to your professional success. But it can seem like a disingenuous, impersonal act. Don’t worry. As this post by a public relations firm CEO explains, honesty and relationships are key to building worthwhile professional relationships. Creating and strengthening professional relationships requires extending invitations and accepting ones you wouldn’t normally consider. |
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How to Manage Your Contacts List Effectively |
To grow your business and nurture your relationships, you need to be able to keep in touch. Your contact list is vital to your business. Managing it can be a daunting task. Here are some tips on how to ensure you are managing your contact list effectively.
First of all, decide once and for all where you are going to house your contacts. Whether you use a customer relationship management (CRM) software program, a spreadsheet, a web-based marketing tool such as Constant Contact, Salesforce, or ActiveCampaign, or some other tool to manage your contacts, use only one database to house and track the information. This will eliminate the tedious task of syncing everything and reduce the possibility of errors as a result. Also, avoid having multiple versions of the file on different devices.
Enter new contacts and updates into the system ASAP. When you add new contacts to the system, categorize each one. Identify each contact as, for example, an existing customer, lapsed customer, sales prospect, vendor, referral, etc. This enables you to tailor your follow-up and marketing messages according to the relationship status.
Do your housekeeping. Update your system when a contact’s status changes: for instance, when a prospect becomes a client. Be sure to remove or merge duplicate contacts. Update or remove bounced email addresses. Unsubscribe those people who ask to be unsubscribed from your mailing list.
Follow these tips and you won’t be overwhelmed by your contacts list. Instead, you’ll be able to plant the seeds to grow your business and your relationships.
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Share This Newsletter
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If you find this newsletter helpful or interesting, share it with those you care about.
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Growing Your Business - Links You Can Use |
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In this day and age, we have a plethora of resources, tools, and information to help us grow our businesses. Here are a few resources covering marketing, pivoting, recession preparation, and mistakes to avoid: |
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This Decade the Digital Economy Will Get Organized |
The start of a new decade brings new digital innovations. Learn what will dominate the 2020s and how you can be prepared:
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Using The Ansoff Matrix
to Identify Growth Opportunities
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There are many models to help you make decisions about business growth, especially when it comes to marketing. Here’s an explainer about the Ansoff Matrix: |
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4 Alternatives
to a
Business
Pivot |
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Growth often includes pivoting. But pivoting may not mean what you think it does. Read more about pivoting and alternatives to pivoting here: |
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How to Help Your
Company Thrive in a
Recession When Others
Are Trying to Survive |
Set yourself up for growth, even during a recession. Here’s how:
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Understanding Taxes for Small
Businesses Owned by Spouses |
Spouses joining forces in a business is a common foundation for entrepreneurial success, but the tax implications of these structures present a cascade of important decisions. The formation of a limited liability company (LLC) rains particularly complex circumstances upon unsuspecting couples. They should seek professional tax advice to avoid confronting unintended tax consequences.
Tax without an LLC
An LLC is created by registering with the state in which the business is organized. A business formed by one person without state registration is a sole proprietorship, and the individual owner is taxed on the business’s profit. Unregistered businesses formed by multiple individuals are automatically treated as partnerships. Profits from a partnership are reported on a separate tax return, but tax is assessed on the individual partners.
Spouses who begin businesses without state registration can escape the step of a partnership tax return. Instead, they may divide the business revenue and expenses on their joint tax return as if the enterprise was two separate sole proprietorships. Formation of an LLC upsets the ability to follow this tax-reporting shortcut, known as a qualified joint venture.
Spouses with an LLC
The IRS automatically treats an LLC formed by more than one person as a partnership. Consequently, spouses establishing an LLC together might discover that having this entity doesn’t deliver the desired federal tax arrangement. A partnership tax return is generally required.
As an exception to this general rule, the IRS will permit spouses operating an LLC in a community property state to enjoy tax reporting as a qualified joint venture. The LLC of spouses in a community property state is simply disregarded for federal income tax purposes.
Worth remembering is what happens upon the death of one spouse in an LLC. The survivor no longer has a spouse as a partner. Rather, the estate of the deceased spouse is the partner of the survivor. In a community property state, the LLC is no longer disregarded as a qualified joint venture. A partnership tax return generally becomes necessary. In most states that lack community property statutes, the surviving spouse simply has a different partner until the decedent’s estate is settled.
LLC Tax Elections
Any LLC may elect federal tax treatment as a corporation by the IRS. A corporation operates as an entity distinct from its owners. The business files a separate tax return and pays corporate income tax. The LLC members effectively become shareholders. They may also be compensated as employees of the corporation. Payments from the corporation to shareholders are dividends. Payments to employees, even if they are also shareholders, are wages. Dividends and wages are taxed differently. Moreover, the corporation receives a tax deduction for wages but not for dividends paid.
In contrast to regular corporations, S-corporations have made an additional election to have their shareholders personally taxed on business profits. Distributions of S-corporation profits to shareholders are not taxed as dividends. This avoids double taxation on payments from the corporation to shareholders. However, shareholders who work for their S-corporations must receive some compensation as wages. Wages incur payroll taxes. Clearly, careful planning is necessary to assure preferred results are secured when an LLC elects tax classification as a corporation.
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This newsletter and any information contained herein are intended for general informational purposes only and should not be construed as legal, financial or medical advice. The publisher takes great efforts to ensure the accuracy of information contained in this newsletter. However, we will not be responsible at any time for any errors or omissions or any damages, howsoever caused, that result from its use. Seek competent professional advice and/or legal counsel with respect to any matter discussed or published in this newsletter. |
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