Chris O’Keefe and Louise Reed, both CPAs, spoke at last Wednesdays Client Lunch to a full house. There are lots of new opportunities in the coming year and we all need to stay on top of the opportunities that present themselves almost daily.

I have decided to keep you up to date as I see things change on more that a Monthly basis, and this is my fourth letter to you this month.

Louise and Chris jointly prepared this memo that is attached. In the next three months in the lunches we will be concentrating on various aspects of selling our wares through various means. Best,

 

2008/2008 Tax Update

CHRISTOPHER J. O’KEEFFE, CPA, LLC
(804) 421-9555 www.cokeeffe.com

LOUISE W. REED, CPA, PC
(804) 282-9173 www.reedolson.com

Backup Information
DEDUCTING MEDICAL COSTS

 

DEDUCTING INSURANCE PREMIUMS

S-Corporation 2% owners:

In order to ensure that more than 2% S Corp owners may deduct their medical insurance premiums “for AGI” on their 2008 1040, make sure that the premiums paid for or reimbursed to the owners during 2008 by the S Corp are included in the owners’ W-2 for 2008. [Don Farmer’s 2008 Tax Update Notebook, p 302] [Notice 2008-1]

Sole-Proprietorships and Partners:

Deductible at 100% on page 1 of 1040.

DEDUCTING OUT OF POCKET MEDICAL COSTS:

S-Corporation 2% owners:

Health Savings Account associated with a High Deductible Health Plan.

Sole-Proprietorships and Partners:

Health Reimbursement Arrangements can be set up as long as the spouse is a wage earner for the sole proprietorship and certain legal and accounting practices are followed.

Health Savings Account associated with a High Deductible Health Plan.

Individuals

Cafeteria Plans/Flexible spending accounts through an employer.

HEALTH SAVINGS ACCOUNTS (HSAs)

 

Louise Reed used www.ehealthinsurance.com to apply for family high deductible health insurance and to find a Health Savings Account banking option. Other insurance plans are available at this website.

RETIREMENT PLAN CONTRIBUTION LIMITS

 

 

CONVERTING REGULAR IRAs, 401(k)s, and 403(b)s To ROTHs

If you have little or no income for 2008, you can save money in taxes in the long-run by converting a regular IRA or a portion of a regular IRA to a Roth. This strategy converts taxable retirement income into tax-free retirement income. The amount converted from a regular IRA to a ROTH is included in taxable income for the year of the conversion. Must transfer the amount from the regular IRA to the Roth IRA no later than December 31, 2008. 

CAUTION: Cannot convert a regular IRA or a portion of a regular IRA to a Roth if the client’s modified AGI exceeds $100,000 (excluding the income from the conversion and any IRA distribution required because the client has reached age 70 ½.) [Don Farmer’s 2008 Tax Update Notebook, p 301]

NOTE: AGI limit lifted in 2010: For tax years beginning after Dec. 31, 2009, the $100,000 modified AGI limit on conversions of traditional IRAs to Roth IRAs is eliminated. Thus, taxpayers also will be able to make conversions from their qualified retirement plans, tax-sheltered annuities and governmental plans to Roth IRAs without regard to their AGI. [Checkpoint, ¶308]

 

SMALL TAX-EXEMPT ORGANIZATIONS REQUIRED TO FILE

Beginning in 2008, small tax-exempt organizations that previously were not required to file returns may be required to file an annual electronic notice, Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations not Required To File Form 990 or 990-EZ. This filing requirement applies to tax periods beginning after December 31, 2006. Organizations that do not file the notice will lose their tax-exempt status.

Small tax-exempt organizations, whose gross receipts are normally $25,000 or less, are not required to file Form 990, Return of Organization Exempt From Income Tax, or Form 990-EZ, Short Form Return of Organization Exempt from Income Tax. With the enactment of the Pension Protection Act of 2006 (PPA), these small tax-exempt organizations will now be required to file electronically Form 990-N, also known as the e-Postcard, with the IRS annually. Exceptions to this requirement include organizations that are included in a group return, private foundations required to file Form 990-PF, and section 509(a)(3) supporting organizations required to file Form 990 or Form 990-EZ. In addition, this filing requirement does not apply to churches, their integrated auxiliaries, and conventions or associations of churches.

 

FIRST-TIME HOMEBUYER TAX CREDIT

 

First-time homebuyers should begin planning now to take advantage of a new tax credit included in the recently enacted Housing and Economic Recovery Act of 2008. Available for a limited time only, the credit:

 

    * Applies to home purchases after April 8, 2008, and before July 1, 2009.

    * Reduces a taxpayer’s tax bill or increases his or her refund, dollar for dollar.

    * Is fully refundable, meaning that the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax that they owe.

 

However, the credit operates much like an interest-free loan, because it must be repaid over a 15-year period. So, for example, an eligible taxpayer who buys a home today and properly claims the maximum available credit of $7,500 on his or her 2008 federal income tax return must begin repaying the credit by including one-fifteenth of this amount, or $500, as an additional tax on his or her 2010 return.

 

 

NEW LIMITED HOME SALE EXCLUSION

 

General rule: You can escape taxation on up to $250,000 ($500,000 MFJ) of gain on the sale of your home if you have used the residence as your principle residence for at least two of the five years preceding the sale. 

The future: If the residence is:

1.     used other than as a principle residence after 2008,

2.     converted to a principle residence and

3.     sold at a gain,

a portion of that gain will generally be taxed.

Planning Point:  Individuals considering converting a vacation home, second home or rental property into a principle residence in order to utilize the home sale exclusion should consider converting the dwelling to their principle residence before 2009.  [Don Farmer’s 2008 Tax Update Notebook, p 302]  Any periods of personal or rental use before 2009 are ignored for purposes of this new rule. [Don Farmer’s 2008 Tax Update Notebook, p 89]

 

2009	2010	2012	2013	2014	2015	2016
Rent	Rent	Rent	PR	PR	PR	PR

3/7 of Gain Taxed

 

2009	2010	2012	2013	2014	2015	2016
PR	PR	PR	PR	Rent	Rent	Rent

0/7 – Full $250,000/$500,000 exclusion

 

2009	2010	2012	2013	2014	2015	2016
PR	PR	Rent	Rent	Rent	PR	PR

3/7 – Gain Taxed

 

 

STANDARD MILEAGE RATE DEDUCTIONS

 

The following are the standard mileage rate deductions for business, medical, and charitable functions:]

2009

2008*

 

 

 

Business related mileage:                       55 cents per mile                50.5 / 58.5 cents per mile     

Charitable related mileage:                      14 cents per mile                              14 / 14 cents per mile

*Half-Year Rates

Medical-related mileage:                         24 cents per mile                           19 / 27 cents per mile                          

 

INCREASED SECTION 179 EXPENSE DEDUCTION

 

The maximum amount of equipment placed in service in 2008 that businesses can expense increases to $128,000, a $3,000 increase from 2007. The annual investment limit increases to $510,000 for 2008, up from $500,000 the year before. Thus, you won't lose the benefit of expensing until you place more than $510,000 of assets in service in 2008.

HIGHER INCOME TAX LIMITS FOR DEDUCTIBLE IRAs & ROTH IRAs

 

If you are covered by a retirement plan at work, you can take a full IRA deduction if your modified adjusted gross income is less than $85,000 (married filing jointly) or $53,000 (single or head of household). A partial deduction is allowed until your adjusted gross income reaches $105,000 if you are married filing jointly or $73,000 if you are single or a head of household. Also, the opportunity to contribute to a Roth IRA is now phased out as your modified adjusted gross income rises between $159,000 and $169,000 if you are married filing jointly or $101,000 to $116,000 if you are single or a head of household.

 

 

LARGER PERSONAL EXEMPTIONS

 

For 2008, each personal exemption you can claim is worth $3,500, up by $100 from 2007.

 

 

HIGHER STANDARD DEDUCTIONS

 

For 2008, the following are standard deductions if you do not itemize:

Single or Married Filing Separately:                                    $5,450

Head of Household:                                                           $8,000

Married Filing Jointly or Qualified Widow(er):                    $10,900

 

 

TUITION AND FEE DEDUCTION

 

The deduction for up to $4,000 of college tuition and fees expired for tax years after 2007. Congress may reinstitute the deduction.

 

HOPE CREDIT AND LIFE TIME LEARNING CREDIT

 

-       HOPE:                                      Up to $1,800 credit per eligible student

-       LIFE TIME LEARNING:             Up to $2,000 credit per return

 

 

DIRECT DONATIONS OF IRAs TO CHARITY

Starting in 2008, IRA owners who direct that all or part of their IRAs be given to charity once again have to report the withdrawal as income and deduct the donation as a charitable contribution. As a result, their deductions may be limited by the adjusted gross income cap on charitable contributions and the itemized deduction phase-out. Fortunately, Congress is likely to eliminate this potential roadblock for 2008 returns.

 

 

ESTATE TAX EXEMPTION

 

In 2009, the $2,000,000 federal estate tax exemption rises to $3,500,000.

 

2008 STIMULUS CHECK

The 2008 stimulus check is not taxable income at the Federal or State level. You won't have to pay taxes on it in 2008, and it will not reduce your 2008 refund. The IRS does recommend keeping a copy of the official notice detailing the amount of your payment.

If you missed the Oct. 15 deadline for filing an income tax return for the economic stimulus payment, you can receive a payment in 2009 by filing an income tax return when the filing season opens in January. The IRS will have more information soon.

 

The Biggest Insurance Claim Mistake To Avoid-Casual Statements To Your Carrier

I am often asked - if there was one mistake I could help people avoid in making insurance claims, what would it be?

The answer is easy. Do not take communications with your insurance company casually. They may not be trying to help you, and insureds are often surprised or confused by aggressive questions during so-called "recorded statements." Be careful when carriers ask for one.

Insurance companies often will ask you for details or interviews when investigating your claim.   Such requests can seek information that may affect whether or not your claim is covered under your policy - whether it is an auto, homeowners, or property loss. Your response - or failure to completely respond - can can lead to claim denial, so be careful.

If your insurer asks for documents or consent forms

Although it may surprise you, many courts in many states including Virginia have held that insurance companies can sometimes delve deeply into your finances, as well as into other details that may bear on whether they might say you are trying to make a fraudulent claim.

Moreover, under some of those cases, your carrier can deny your claim simply because you failed to respond to a reasonable request. Since your definition of what is reasonable may differ from what the law says, you may be wise to either respond or ask a lawyer to help you decide what you can fairly keep from sharing.

Insurers often ask for: bank records, credit card statements, mortgage information, tax returns, past bankruptcy information, and in some cases, items like phone bills. You will put your claim at grave risk if you completely refuse to share any such information. That said, your carrier probably is not entitled to the last ten years of your financial data (assuming you have it).

Insurers may also ask you to sign consent forms so their private investigator can collect information you may no longer have from your banks, creditors, and other places. Refusing to sign any consents at all could also lead to your claims' denial, but these consent forms can go far beyond what your carrier should have any right to look at.

If you get asked to sign such a form, and you have a big claim, you may want to consider seeking a lawyer's help. At the very least, you may want to ask that the consent only allows access to records from the current and prior year - at least at first. And you should ask that the consent expire within ninety days. You don't want them to use it to get your private data a year from now.

Also, watch out for consents that waive attorney-client privilege, your privacy rights, your law enforcement rights, your privilege against self-incrimination, or any other constitutional right - you shouldn't have to sign such consents. If it looks like you are giving up a lot of rights, you may be giving away too much.

After the first round for requests, the carrier may have follow-up questions. If the insurance company is willing to keep spending money to investigate, that can hint they may be planning to deny your claim. Be careful in what you do next.

Beware the recorded statement

Carriers frequently ask for recorded statements after a claim is made - often shortly after. Take care when they do. Here's why: they seem informal, but they aren't.

First, some carriers no doubt employ this tactic: request multiple statements from you, then use the inconsistencies that always happen when someone tells their story more than once as grounds to claim you lied during the claims process. That alone can lead to a denial.

Second, insurers usually have trained questioners take the statements. You should expect tricks and traps, and be ready for an aggressive style with detailed personal and financial questions. Your refusal to answer questions, or conflicts between your answers, or conflicts between an answer and documents all can lead them to deny your claim - whether fairly or not.

Third, most policies do not specifically require that you provide recorded statements. You have a general duty to cooperate and provide information, but policies often require only an "examination under oath" - a formal statement to a court reporter who makes a written transcript. Those cost more money to take, in part because attorneys usually take them, so insurers may be less likely to use them as a fishing expedition or simply to create contradictory statements.

Depending on your facts, you may want to tell your carrier that you are happy to speak with them, but only through an exam under oath. But use care. If you give such an exam, you should probably pay for a lawyer to sit with you. The insurer will probably have their lawyer take the exam, and most people can't handle a lawyer's questioning without help.

Whatever you do, do not assume the carrier is on your side when they ask to record your statement. Assume it is working against you until facts prove otherwise.

Taking an examination under oath

Exams under oath cost insurance companies money.   They have to pay hundreds if not thousands to a court reporter to transcribe what you say. They may have to pay a lawyer hundreds per hour to prepare for and take the exam. So if an insurance company decides it is worth its money to examine you, it is worth your money hiring your own lawyer to help you when they do.

Carriers have lawyers who can use aggressive, trained questioning methods that can hurt your claim. The law may allow them to explore your personal finances, medical history, past insurance claims, or other topics you may not want to discuss, even though you have done nothing wrong. Perhaps most importantly, if the insurance company decides - whether justified or not - that you are bringing a false claim, that can expose you to criminal liability.

You may want a lawyer there working for you who understands what they can ask and object when they go beyond the line. A lawyer can also protect you against questioners who use an abusive tone or harsh words to rattle you. If a questioner hits a sensitive topic (and even people making valid claims can have them), a good lawyer can help minimize the damage to your claim. 

Remember this - your claim's actual validity may not matter if the insurance company can make it look fishy. And fishy may often be enough for them to deny your claim. If that happens, you may need to pay to sue them if you want to ever collect what they owe you. Spending money now can save money later.

A case on point

For the attorneys who get this message, Judge Urbanski in the Western District of Virginia issued an order last summer dealing with this very issue. You can read an article about it on my website here:
Link to article on Urbanski opinion

It offers several cautionary points for attorneys.

I hope you find the above information helpful.

 

Regards,

 

John J. Rasmussen

Insurance Recovery Law Group, PLC

www.insurance-recovery.com

One of my biggest money savers was using the free resources available through the Small Business Administration and SCORE. My SCORE counselor spent at least three hours with me helping me write my business plan and giving me some good advice and it didn’t cost a penny!

 

Connie Dye

HeadBank

804-612-9528 phone

804-612-9529 fax

www.head-bank.com

 

___________________________
 

The Top Two Reasons Small Businesses Outperform in Recessions

 

In the first installment of this four part series highlighting the strengths of the small business market during a recession, we explored the counterintuitive growth and stability of the small business market in economic downturns. In this second article, we will uncover the two main drivers of stability in this market: small business owners’ financial independence and ability to change.

1. Small businesses are less dependent on bank lending.
Wall Street rewards enterprise companies for borrowing from banks to improve their return on equity. In good times, large companies use the strength of their balance sheet to borrow at favorable rates and leverage up their returns. Now that the credit markets are all but frozen, large enterprise companies have to borrow at higher rates and/or drastically cut their borrowing.

In contrast, small business owners aren’t as dependent on banks to run their businesses. Most small businesses are cash-flow positive enterprises and do not rely on outside capital to start or run. Nearly 80% of employee based businesses and 60% of sole proprietors are self-financed businesses, relying on themselves, their families, and their friends for capital. Only 11% of small businesses rely on bank loans to start or acquire their business.

While it’s true that some small business segments like manufacturing rely on outside capital, most don’t. And despite the whining rhetoric coming from Washington, D.C., most small businesses will do just fine without borrowed money.

2. Small businesses are nimble.
Companies like GE are market makers. In many ways, they are so big and so diversified, they are the market. And as the market tide rises, they rise. As the market tide goes down, they suffer.

Small businesses, on the other hand, are able to re-invent themselves and tuck themselves into new corners of opportunity as their old business revenue declines. Consider two small business owners we’ve spoken to over the past 3 months:

A dance studio owner in New York City has historically focused on teaching after-school classes to kids. As the economy declined, parents who consider after-school classes a luxury pulled back and her small business also declined. In talking to the parents of one of her students, the studio owner learned that this couple had enrolled in ballroom dancing lessons at a rival studio. It seemed the couple had been inspired by the TV show “Dancing with the Stars” and had taken up ballroom dancing as a stress reliever. Sensing an opportunity, the owner re-invented her studio into a facility to teach ballroom dancing to New York’s stressed-out (and in some cases laid-off) financial workers. Business is booming again.

 

An architect in Denver spent the last 5 years thriving off the residential housing boom. As boom turned to bust and foreclosures rates swelled to over 40% in newer housing communities, he quickly shifted his business to residential remodeling. While nervous about buying and selling homes, there are still plenty of families in Denver who want and need more living space. The architect now focuses on “pop-tops” – adding a second floor to a ranch style home – and has more business than he can fulfill on.

 

Predominately, marketers are members of large organizations where change is measured in months. Small business owners, on the other hand, have the control to make huge changes in days. This ability to react almost immediately to market opportunities allows entrepreneurs to weather recessions with relative revenue stability.
Your organization will undoubtedly have to make cuts in overall marketing investments for 2009. Don’t treat all your segments equally with blanket budget reductions. Push for differentiated investments in markets with greater potential during this downturn economy; small business is at that top of that list.

 

Next week’s article will highlight targeted sub-segments which will outperform the small business market in the next 24 months. Members can view this series in its entirety by downloading Marketing to Small Business in the USA: an Open Letter to CMO's from www.warrillow.com or by contacting their relationship manager.

 

An Announcement from Warrillow & Co.
Warrillow & Co. has been acquired by The Corporate Executive Board (NASDAQ: EXBD), a leading provider of best practices research and analysis focusing on corporate strategy, operations and general management issues read more.

 

Submitted by: Robert Overholser
Lufteknic - Porsche Parts  Service  Restoration  Motorsport
http://www.lufteknic.com
1529 Brook Rd.
Richmond, VA 23220
804.359.9393 phone
804.343.3373 fax

 

 

Flexible Office Solutions is the newest executive office/virtual office option in Richmond. We offer fully furnished, fully staffed executive offices that average about 120 sq. ft. per office in a newly renovated building located in the Willow Lawn area. Each office comes with telephone service, Internet service, fax and color printer service as well as over 1,000 sq. ft. of shared reception area, meeting rooms, kitchen and  client café. For the individual that has outgrown their home office or the 1 person office, this is a great solution starting at $299/mo. Service agreements are available for any length of time: a day, a week, a month, a year or years.

 

We also offer 5 different Virtual Office packages that permit you to use our business address, phone answering, meeting room and reception services. The benefit of this is that you project a positive upscale image of your company and the place you do business, without paying the higher cost of renting a full time office each month. Our Virtual Office packages start at $50/mo and extend to $250/mo.

 

Please give me a call when you get a moment, that I might answer any questions you might have and set a time that is convenient for you to see our facility.

 

Looking forward to helping you with all your office needs.

 

 

Patrick Wettstone
Center Manager
Flexible Office Solutions, LLC
1518 Willow Lawn Drive
Richmond, VA 23230
804-612-7600
804-612-7601 f
804-399-9139 c
pwettstone@flexibleoffices.com
www.flexibleoffices.com

_____________________ 

B A R N E T T ‘ S

 

 

RE: A Tip for Plugging a Leak in the Profit Bucket

 

Billy ….

 

I have been concerned for some time that Manufacturers have been disguising their true mark up percentages by inflating shipping and handling charges and hoping no one would notice. In the meantime, they were shouting overstated mark up advantages over competition. I searched for and found a realistic way to eliminate inflated shipping and handling charges. In that process, what I had been billed for, which was an average inbound shipping charge of $14.87 and an additional handling charge of $15.00 totaling $29.87, was reduced to $8.07 per shipment. Considering that I receive an average of 1200 of those kinds of shipments annually, the savings of over $26,000.00 was worth the effort!

 

For me, the solution was using FEDEX Ground Collect. I did have to inform every one of my vendors by letter that I would only receive their product in that manner. I stressed to them that their advantage was that they would have no Account Receivable for freight. The vast majority of them went along with it even though they knew they were giving up their secret “slush fund”. To further sweeten the pot for me I informed FEDEX to charge all of the expense to my Amex Card. Amex extends a 3% discount for this and gives Merchandise Reward Credits. The Amex is paid off every 30 days so no interest accrues.

 

I have attached a sample of the letter I send and/or give to my vendors. It also contains contact information for FEDEX. Please contact me if you wish additional information.

 

                                                                                      Steve Barnett

                                                                                      Hallmark

                                                                                      steve@shopbarnetts.com

 

Attachment:

 

January 2008

 

Notice to:

 

All Businesses Shipping Packages to Barnett’s Hallmark Shops

 

We wish to inform you that effective immediately we are participating in the

FedEx Ground COLLECT program. We are now requiring that all our suppliers ship via FedEx Ground COLLECT when shipping packages to us. Under this arrangement, shipping charges will be invoiced directly to us. If you create any additional fees associated with your FedEx Ground COLLECT packages shipped to us, they will be invoiced directly to you.

 

If you do not currently have an account with FedEx Ground to accommodate or policy, please call 1-800-231-9219. They will create an account to conform to the Hallmark Card Corp national program.

 

The benefits to you of FedEx Ground COLLECT are:

            FedEx Ground will weigh, rate and bill the packages directly to Barnett’s.

You will no longer have to pre-pay freight charges and wait to be

reimbursed when the invoice is paid.

Packages can easily be traced by calling FedEx Customer Service or by

utilizing the website, www.fedex.com.

           

 

FedEx Ground has the following package restrictions:

            Ground Shipments Only

            Maximum weight: 150 pounds

            Maximum Size:      130” length plus girth

 

These instructions supersede all previous shipping instructions to Barnett’s Hallmark Shops. These directions must be followed for us to pay shipping charges. All incoming shipments and merchandise invoices will be monitored and any deviation in these instructions will result in a chargeback of shipping costs. Do not prepay freight; add freight or handling charges to your invoice(s). Charges additional to FedEx Ground Collect are not appropriate and will not be paid by Barnett’s Hallmark Shops.

 

If you do not wish to comply with this policy or have any questions, please refer to the store list cover page for account numbers or to contact the undersigned.

 

Regards,

 

 

Steve Barnett

Hallmark

steve@shopbarnetts.com

 

 

Ellyson Psychotherapy, LLC

142 High Street, Suite 501, Portland, ME 04101

(207)899-9844

 

Time/Money Saving Ideas:

 

Payroll and payroll taxes: Bank of America has a payroll feature available to business account holders. It costs me $15 a month ($30 is the cost if you don’t use direct deposit into your employee’s account). They remind me when to log on and pay my employee (me) and also remind me when to file my quarterly taxes. They create the forms for me then mail/send them plus the money they’ve calculated for withholding. I have to approve everything (it doesn’t happen without my permission) but I don’t have to mess with forms or worry about postmarks. Very easy and reliable!

 

 
_____________________________
 

The VaSBDC system is getting ready to publish a brochure of tips for small businesses to help them manage this difficult economy.  It will be on the web (http://www.vasbdc.org/VASBDCPubs.asp) , so check frequently. We should see printed copies shortly.

 

Sally Feltner, Business Consultant

Greater Richmond Small Business Development Center
600 East Main Street, Suite 700  (zip code 23219)
PO Box 1598
Richmond, VA  23218-1598

 

Phone:  (804) 783-9349

Fax:  (804) 783-9366

Email:  sally.feltner@grcc.com
Web Site:  www.grsbdc.com

 

Hosted by the Greater Richmond Chamber
In Partnership with the U.S. Small Business Administration

 

National Small Business Association’s Economic Development Group discussed a new release by the Federal Reserve Bank that more banks have reduced credit or credit terms to small companies in the 3^rd quarter.

Reductions include:

- Shorter repayment terms (higher payments = tighter cash flow)

- Higher interest rates (reflecting business risk, not cost of funds)

- More collateral needed (what if owner has already pledged house…where does this collateral come from?)

- Lower lending limits, reduction in lines of credit

- More downpayment or money in by business owner.

 

The key is that small businesses need to have a clear understanding of their cash flow.  If the business carries inventory and offers 30 day payment terms, they need to look closely at their working capital cycle…it will be much harder to get a line of credit just to carry these assets.   (Note to all:  I can show a client where their cash flow cycle is wasting cash and come up with tactics to improve internal funding.)

 

This is a good time to expand, perhaps buy a weaker competitor, if they can show economies of scale.  It is very important that business buyers do not pay too much!  I keep seeing unreasonable and unsubstantiated asking prices for businesses.  I can produce a value report that shows what the business can pay for itself.

 

I talked with a SunTrust Business Banker.  They are still lending for good deals and solid companies.  I can refer you to Carolyn Clement who has the maturity and experience to sort through deals and businesses quickly and move deals forward.  If the company has no concept or time to properly package the business for a loan request – I provide that service.

 

Linda Heath

Financial Holographix Inc.

LHeath@Financial-Holographix.com

Some brief notes about employment law and the hiring process:

 

The good news is that most of you are very small businesses with fewer than 15 employees.

 

If that is so for you, you do not have to comply with many of the Federal rules that govern the hiring process, such as Title VII of the Civil Rights Act of 1964 which prohibits discrimination on the basis of race, color, religion, sex, national origin … or age (the later Age Discrimination Act).

 

You can therefore advertise for “a young, Mexican, Baptist female”, if you wish.

 

 

( Read more... )

 

Chapter Ten: Early Christianity: Different movements; how the New Testament was written and selected; theology from Borg and Pagels and others; the Gnostics lose out; the Nicene Creed stamps out “heresy” (and thought); and the Q source and the probable sayings of Jesus. (p 79)

 This memo is intended to give a basic over-view about tax exempt organizations exclusively for our clients. This area of law and tax in some ways is more complex and rule-driven than most simple businesses organizations are, primarily because tax exempts are driven by federal and State statutes, not by the Common Law or custom and usage. Wherever there is a statute, there are cases and rulings interpreting these statutes, and these are not included here. You should get a basic overview here, but you will also need to ask us questions when faced with certain issues, such as salaries, unrelated income and activities.

( Read more... )

How does the employer insure independence?

 

At the very least, the employer should require an agreement that sets out the relationship with the independent contractor and require the contractor to get her/his own separate business license – an indication of a separate business. Best of all, the independent contractor should set up her/his business in a separate LLC, with its own Federal ID (EIN) and a legally separate tax status. This last should be what we lawyers call a “prima fascia” presumption of independence. The LLC is also the gateway to tax savings for the independent contractor.

 

In some cases – when, for example, the employer wants to hire back an employee who has just left the employers’ business – the new independent contractor simply must form a separate company so that the company can be the independent contractor, lest the IRS come in and say that the employer simply changed the status of her/his employer from employee to independent contractor to save taxes.

 

 

Businesses prefer independent contractors to employees because there are no payroll taxes to be withheld, a savings of more than 7% of payroll to the employer. Independence also means flexibility in hiring and firing for the employer as well as the absence of employee benefit plans, including worker’ compensation costs.

 

The ideal employer (and there are very few of these) will take great pains to insure that her/his independent contractors are actually independent of him/her. Does the contractor receive a regular check in a regular amount? The IRS might take the position that if the compensation looks and smells like a salary, the contractor is an employee. Does the employer have the right to tell the contractor how to do his/her job, or is the employer just interested in the results produced by the contractor... things like that.

I taped the Charlie Rose show last week – the interview with Warren Buffet and Bill Gates - and watched it twice.

I have come to think that what Buffet has done, and what Gates has started, might be an important historical event for this country.

Gates, the ultimate monopolist, capitalist and market economist – the market takes care of itself; leave it alone and everything will work itself out by the laws of supply and demand – has seen another light, and that light has attracted Buffet, and may attract others… maybe the whole country. It has certainly gotten my attention.

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