Posts Tagged ‘business’

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Schedule “C” Updates…

In Accounting & Finances,Business,Taxes on September 11, 2016 by Sufen Wang Tagged: , , , ,

Some Light Reading for the Weekend: Updated Schedule C Instructions

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think-about-1184858_640Folks, the 2015 Tax Extension deadline is upon us!!!!  October 15 is right around the corner!!! Yikes!!!  Let’s get that Schedule C finalize and send off to your CPA or the IRS and be done with year 2015!  Let’s review some of the changes for year 2015 before you hit that “SEND” button or lick that envelope and stamps to The IRS.surprised-1184889_640

easy-estimated-taxes-2013For many Americans, filing taxes is a quick and painless process. For sole proprietors and the self-employed, it’s never so easy. If you’re one of these folks, you have the privilege of struggling through Schedule C, Profit or Loss from Business, and its many accompanying forms. And just when you think you’ve mastered the twists and turns of those documents, the IRS changes the instructions so you have to figure them out all over again.

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The latest round of Schedule C instructions are available here. Small businesses that changed accounting methods to adopt repair regulations will want to check out the simplified reporting requirements. The instructions also cover deduction and capitalization of tangible property expenditures related to those repair regulations.

instructions-76729_640.
For your reading pleasure, the IRS also released updated instructions for Form 4562, Depreciation and Amortization. For tax years beginning in 2015, the maximum Section 179 expense deduction is $500,000 ($535,000 for enterprise zone property), with this limit reduced by the amount by which the cost of section 179 property placed in service during the tax year exceeds $2 million.

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house-valueAlso note that you can choose to claim a 50% special depreciation allowance for certain qualified property that you got after Dec. 31, 2007 and placed in service before Jan. 1, 2016. According to the instructions, the definition of qualified property differs for some qualified property placed in service after Dec. 31, 2015. And corporations should review the updated Form 4562 instructions, since there’s news on claiming certain unused minimum tax credits.

MH900334322So if you were looking for some easy reading material to keep you occupied this weekend, today’s your lucky day!

Sufen Wang, M.S.Accountancy
Wang Solutions, Long Beach, CA (562) 856-0793
Editor: Hannah Huff, M.F.A. Creative Writing: Poetry, (626) 806-5805

 

 

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Here Comes the Health Care Penalty:

In Accounting & Finances,Business,Taxes on December 15, 2015 by Sufen Wang Tagged: , , ,

More than 7.5 Million Taxpayers Affected

AppleAn apple a day keeps the doctor away…but unfortunately not a penalty for having no health insurance. 2014 was the big year that most Americans had to get health insurance under the Affordable Care Act. People who didn’t comply would get hit with a tax penalty when it came time to file their 2014 tax returns. The size of that penalty, as with most tax-related things, would depend on factors such as income and family size.

ImprimirAfter the rush hour of tax filing season died down each year, the IRS conducted a “substantial data review” to see how things went and to figure out how to move forward. The 2015 filing season was no different, except this time around the agency’s results included preliminary stats on the damage done in terms of ACA tax penalties. IRS Commissioner John Koskinen’s letter to Congress on July 17 estimates that 7.5 million taxpayers paid the aforementioned penalty for lacking health care.

That adds up to about $1.5 billion paid in so-called “individual shared-responsibility payments.” In layman’s terms, taxpayers and/or their dependents got dinged for any month in 2014 they didn’t maintain health coverage (or qualify for an exemption). Broken down, the individual payments weren’t huge, but still certainly left taxpayers’ piggy banks with cuts and bruises at tax time, with 95% facing a penalty of $500 or less.

Towards the end, Koskinen’s letter points out that “the vast majority – 85 percent – of taxpayers reporting a shared responsibility payment still reported a refund.” This statement paints perhaps too nice and neat of a picture – sure, a lot of the taxpayers may have gotten some money back, but the fact is that they still also had to pay for not having health coverage, and a lot more people had to pay to have health coverage.

Health-Care-Piggy BankThat being said, a number of taxpayers were granted a certain amount of relief via the Premium Tax Credit (PTC), or the APTC – the latter of which is basically advance PTC payments made directly to insurance providers to reduce premiums throughout the year. APTC makes things easier up front, but comes with the stipulation that at tax time, those advance credit payments need to be reconciled with the actual PTC allowed. Around 2.7 million taxpayers claimed the premium tax credit in 2014, with an average credit of $3,400 per taxpayer.

Injured Piggy Bank WIth Crutches

Koskinen’s letter also noted some hiccups and glitches in reporting, e.g. the “5.1 million non-dependent taxpayers [who] did not check the box, claim a health care coverage exemption, or report an individual shared responsibility payment,” along with the “continued erosion of taxpayer services” (hint, hint Congress – don’t reduce the IRS budget further). While paying a health care penalty will probably never get less painful for taxpayers, hopefully the IRS can streamline things so that the penalty-paying process doesn’t require a doctor’s visit for stress!

Sufen Wang, M.S.Accountancy
Wang Solutions, Long Beach, CA (562) 856-0793
Editor: Hannah Huff, M.F.A. Creative Writing: Poetry, (626) 806-5805

 

Articles

Entitlement…

In Accounting & Finances,Business,Culture on December 26, 2013 by Sufen Wang Tagged: , , , , , , ,

entitlement_is_important_to_your_b2b_messagingThe Entitlement Generation: Success is NOT Guaranteed

Entitlement is defined as “having a right to something and/or the amount to which a person has a right.”  Note that the key phrase is “having a right” to something – not “having to earn the right.”

urlSeveral comments from my accounting students had prompted me to ponder the word “Entitlement.”  When I asked one student what his 5-year goal was, he replied, “To be a Chief Financial Officer.”  Ah, a very aggressive goal from someone who never showed up to class on time, missed over 22% of classes, could not find his textbook for two weeks, and who hardly turned in any homework assignments and projects. But he was also one of my smartest students who grasped accounting concepts almost immediately.

j01186631My response to him was, “How about you locate your accounting book and try to pass my class first?!”  He laughed with a hint of embarrassment. (Maybe this means there is a glimmer of hope for him?!) He ended up receiving a low D – not due to a lack of knowledge on the subject matter, but instead due to his lack of assignment completions, projects, and attendance. Sadly, this “D” will follow him for a long time.

Students do not understand that their Grade Point Average (GPA) is their resume as they accumulate actual job placements and experiences.  A “D” in an upper division course in one’s specific field will hinder a job seeker’s chance of competing with his peers.  Again, unfortunately because he assumed his “smarts” entitled him to a free pass in terms of class requirements, my student acted unwisely and did not advance well in his pursuit of his college degree.

Entitlement3Another case of assumed entitlement happened last year when one of my business major students came to class saying exasperatedly, “I’ve been filling out job applications for the last week and every opening requires that I have 3 to 5 years of experience in my field. How the heck am I going to get that?”  Ah, perhaps there should be an App where you can download 3 to 5 years of experience instantaneously, and voila! it’s added to one’s resume. 

good_study_habitsThese are sad examples of what our young (future) generation of college students is dealing with. They feel that simply because they’re going to school, they are entitled to jobs for which they have made no effort to prepare – on an educational level and/or on an on-the-job work experience level.  If only they would shut down that video they’ve been playing day and night and instead pick up the textbooks, do the work, and put in the time. Then, and only then, will they have a “chance” to reach their career goals!

Sufen Wang, M.S.Accountancy
Wang Solutions, Long Beach, CA (562) 856-0793
Editor: Hannah Huff, M.F.A. Creative Writing: Poetry, (626) 806-5805

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Self-Employment 101:

In Accounting & Finances,Business,Taxes on April 30, 2013 by Sufen Wang Tagged: , , , , , ,

Help Yourself with these Independent Entrepreneur Tax Tips


black-29972_640If you live and – more importantly work – by the motto “You’re not the boss of me!” then read on. When you’re self-employed, you either work for yourself, as an independent contractor, or own your own business. Despite this independence, you’re still accountable to at least one person, Uncle  Sam, and you have to play by his rules even if you set your own hours. Yes, pick any 18 hours a day, 7 days a week; welcome to self-employment!

So, let’s say that you have a regular nine-to-five job, but you also do a little bit of this and a little bit of that on the side. Self-employment income can include pay that you receive from that part-time work done from home. That is income earned in addition to your normal job.

MH900160788Therefore, it is important to determine if you’re self-employed or not.  Any income you earned and for which you DO NOT recieve a W2 at year end for that income, is self-employed income.  Any and all self-employed income must be reported and filed via a Schedule C aka “Profit or Loss from Business,” or a Schedule C-EZ, with your personal income tax return Form 1040.  Oh, keep in mind that the minimum tax imposed on these self-employed income is at least 15%, which includes Social Security and Medicare taxes, in addition to your income tax.

Furthermore. you may have to make estimated tax payments throughout the year, on the income that is not subject to withholding. If you don’t make those payments, you may get hit with a penalty when you file your return. Being your own boss isn’t sounding too good right about now, is it?

MH900442412Well, at least you don’t have to worry about getting fired. And you’ll be able to deduct some business expenses for the costs you paid to run your trade. Most can be deducted in full, but some costs must be ‘capitalized’ – meaning you can deduct a portion each year over a period of years. Here’s the catch though: you can only deduct costs that are both “ordinary” and “necessary.”

MH900127671Finally, just because you’re self-employed doesn’t mean you have to figure everything out by yourself. For more answers, check out the
IRS Small Business and Self-Employed Tax Center, Publication 334, Tax Guide for Small Business, Publication 535, Business Expenses, and Publication 505, Tax Withholding and Estimated Tax. Now go finish hanging up that Employee of the Month plaque above your desk.

Sufen Wang, M.S. Accountancy

Wang Solutions, Long Beach, CA (562) 856-0793

Editor: Hannah Huff, M.F.A. Creative Writing: Poetry, (626) 806-5805

Articles

Holiday Guide Part 2:

In Accounting & Finances,Business,Culture,Entertainment,Family,Taxes on December 14, 2012 by Sufen Wang Tagged: , , , , , , ,

MH900363532Seasonal Strategies for Your Small Business

‘Tis the season to spend time with family, but also ‘tis the season for shoppers to spend money on lots of presents. That means small businesses have to get down to business right now if they want the extra holiday business, especially since Super Saturday (December 22nd)– one of the biggest shopping days of the year – is close at hand.

MH900082871Special offers can easily increase your sales volume. Everybody likes any kind of discount, so come up with deals like “purchase one product and get the other at half price” or “buy one at full price and get a free gift to give.” A business that doesn’t sell seasonal products can be just as successful as one that does, as long as you promote your products as suitable gifts. You can also donate a portion of the price of your product to a charity so that customers feel they too are contributing to that charity. Hand out samples in exchange for customer’s e-mail addresses so you can send them promotions and keep them coming back after the holidays. Finally, get shoppers in the holiday – meaning spending – spirit by decorating your store and offering a free gift wrapping service.

e-Filing BagIf you have a store website and social media pages, also decorate those with festive graphics and designs. Organize merchandise so that it’s easy for online buyers to find holiday gifts – for example, “Gifts for Him,” Gifts under $50,” etc. Use email, blogs, and web banners to make gift suggestions, and to showcase popular items and why people have to have them this holiday season. Offer downloadable gift certificates when holiday shipping deadlines have passed and use your site to make people want to visit your brick and mortar store.

Budget CutYou should also be aware of several business-related tax credits and deductions that you’ll want to take advantage of before New Year’s Day. For example, did you know that you can get a tax credit for hiring an unemployed veteran before December 31, 2012? Or that Section 179 of the tax code provides tax benefits for equipment purchases made before the end of the year? Now would be a good time to review your equipment so you can replace any obsolete assets.

You can read this U.S. Small Business Administration bulletin to find out many more holiday marketing tips, answers to your small business tax questions, and more details on the above tax credits and deductions. If you feel stressed out in the coming weeks, just keep in mind that being busy is always a good thing when you’re a small busyness owner.

MH900354203Happy Holidays!

Sufen Wang,

Wang Solutions

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On Her Way Up:

In Accounting & Finances,Business,Culture,Human Resources on August 31, 2012 by Sufen Wang Tagged: , , , ,

What You Should Know About Female-Owned Businesses…

It’s well-known that women must deal with a “glass ceiling” in the corporate arena – lower wages and automatic exclusion from the top jobs.  Accordingly, many women are taking a different route: they’re coming through the roof and starting their own businesses.

American Express OPEN realized this and recently conducted a study focusing on women-owned businesses. They wanted to see where there has been improvement and where there are still problems. Here’s what they discovered.

There are 8.3 million women-owned businesses in the United States. That’s a 54% growth in the past 15 years. And that growth is good news for all workers out there, no matter their gender. Women-owned businesses employ 7.7 million people, 40% more than the three largest employers (Wal-Mart, McDonald’s, and IBM) combined.

Female business owners can also hold their own when it comes to making money and the stats prove it. Women-owned businesses now generate revenues of $1.3 trillion, a 58% increase over the last 15 years. In fact, 2% of women-owned businesses bring in more than $1 million in annual revenue, versus 5% of all firms. Moreover, in 7 out of 13 of the most populous industries, women-owned firms are exceeding overall growth. How’s that for surpassing the glass ceiling?

Of course, there’s still a long way to go and not all the numbers are positive. Women own almost 30% of U.S. businesses, but they attract only 5% of the nation’s equity capital. Even worse, women receive 80% less capital than men in terms of first-year funding. And there’s evidence that a glass ceiling still exists when women-owned businesses start to expand: they experience faltering growth at 5-9 employees or $250,000 in earnings.

So how do we ensure that women-owned businesses will be even more successful in the future? We can start by looking to successful female entrepreneurs for advice. Heather Stouffer of Mom Made Foods points out that “Like my own kids, the company needed constant focus, love and nurturing to become a strong company. My advice to entrepreneurs, similar to motherhood, is to know that it’s OK for your company to make some mistakes. It’s the learning from those mistakes and perseverance that are the keys to building your company into the market leader.”

On Women Power, Ms. Sufen Wang, Wang Solutions

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How to Barter Responsibly…

In Accounting & Finances,Business,Culture,Taxes on March 8, 2012 by Sufen Wang Tagged: , , , , , , ,

“I will gladly pay you Tuesday for a hamburger today!”
  
That classic Wimpy phrase was not just about hamburgers, it’s about bartering – one of the oldest business transactions in human history. Well, in Wimpy’s case, it was probably more like an “I.O.U.” than an actual bartering exchanging hands.  Yes, before coins and dollars were invented, folks survived by trading stuff. Bartering is back in full swing now that the country is going through some hard times, so it’s time to dust off your haggling skills.
 
The official definition of bartering is “the trading of one product or service for another.” If you offer your friend three cookies in exchange for a sandwich, you have just bartered. Of course, it gets more complicated than this in the business world, and small business owners can save a lot of money by bartering for the products and services they need.
 
In general, bartering involves no exchange of cash, but that doesn’t mean you’re off the hook with the IRS. The fair market value of property or services received through barter is taxable income. Since it takes two to barter, both parties must report this income for the year in which the transaction is performed. How you report your transactions depends on which form of bartering takes place. In most cases, you’ll use Form 1040, Schedule C Profit or Loss from Business, or other business returns such as Form 1065 for Partnerships, Form 1120 for Corporations, or Form 1120-S for Small Business Corporations.
 
You might still imagine bartering to be like a crowded swap meet, with people yelling and pushing you. Actually, the internet has allowed bartering to get a lot fancier than that and now there are even things like organized barter exchanges. A barter exchange organizes a marketplace where members buy and sell products and services among themselves. If you choose to use such a marketplace, every year you’ll have to fill out Form 1099-B, Proceeds from Broker and Barter Exchange Transactions.
 
You, yourself, might find that you really like bartering – if you start to do it a lot, congratulations, you may have started what the IRS calls a “barter business.” Once you’re established enough, you can even deduct business expenses. Or you might have a regular business and are simply using barter transactions to help your sales; then you’ll have to include those sales in your business income.
 
If you really want to be a savvy barterer, here’s a tip: never barter outside of your industry.  When you mix two different types of businesses, one party of the bartering partners will always feel short-changed. That’s why a uniform currency was invented in the first place. So, stick with the same business if you want to barter – otherwise, just pay for each other’s services and be done with it!
 
The IRS provides a Bartering Tax Center for all of your bartering needs. And no, you don’t need to trade anything to read it!
 
On the Money,
Sufen Wang
Wang Solutions