Taxes

Team Building – 7 Steps to Success

“We are going to build a team”. Replace the word “team” with the word “house” – or any other noun that can be built and will take more than just a few minutes – and most sensible people will want to adopt a structured approach.
Plans will be drawn up and approved. People will receive copies of the plan and efforts will be made to ensure everyone understands it. Progress will be monitored against the plan. Lessons will be learned along the way that will be used to improve the next phase. Anything less will lead at best to mediocrity and underachievement.
So why is team building so often treated in an ad hoc manner? You wouldn’t take bricks and mortar out, show them a good time and expect them to rearrange themselves into something better just because they had a nice break. So why expect a group of people to do any better?
The only answer to that question with any merit is that bricks can’t think and people can. Which sounds like management by abdication. Or perhaps management by trusting to luck. It certainly doesn’t sound like a structured approach.
So if taking people off for some fun is not team building – what is it?
Traditional away day options are team bonding exercises – and that is different. Take a group quad-biking, paint-balling etc and it will help bond the participants through a shared experience. You can even justify its use of some of the training budget if you like by claiming it has helped them develop as a team. Just don’t believe it – or you’ll be disappointed to discover that while the group is closer it is no more effective.
No – if you want to build a team rather than just bond the individuals closer, you need a structured process. You need to decide before you start what improvements you want and can realistically expect the team to achieve. Next you can decide how long it will take to achieve those results.
Often, fun remains a key objective for such a session. If it is the only one – or is only combined with a desire to get the team to become closer – organising a team bonding session is an ideal solution. If, however, your expectations are set higher than that – then you need something more structured.
So what are the key characteristics of a genuine team building session? I suggest the following 7 steps will lead to success:
1) Have definite session and longer-term goals and know how the session goals lead to the longer term ones.
2) Use an engaging and varied base activity that involves each participant in something that he or she enjoys doing.
3) Use an activity that achieves that engagement while having genuine parallels to the workplace and has relevance with the session goals.
4) Select an activity that requires the same kind of skill sets and team approaches that are needed at work – albeit one that is removed from the work itself.
5) Consider using an independent (internal or external) facilitator – to allow all levels to join in as equals and to avoid it feeling like a “sermon from above”.
6) Debrief using a predefined process that highlights the workplace parallels and allows the participants to extract their own learning rather than be preached to.
7) Use a proven mechanism to transfer the learning back to the workplace, ideally integrated within the debriefing process itself.
If none of these seem important, you are probably looking at a pure fun bonding session. Whether that is a trip to the nearest (or furthest!) bar or something that offers the group an experience that all of its members will enjoy doesn’t matter too much.
But if any of them do seem important, then I’d suggest that they all are. If one or more are missing then your team building session will be compromised. And that’s a word that sits well alongside mediocrity and underachievement.
Copyright 2005 Sandstone Limited

Alan is Managing Director of Sandstone, a leading UK team building company. He enjoys creating innovative activities that combine fun with genuine team development. In his spare time, he does voluntary work for the RNIB.

http://www.sandstone.co.uk

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Automobile Tax Expenses

If you use a vehicle for conducting business, you can deduct certain automobile tax expenses from your tax bill. This is true even if you use the vehicle for personal and business needs.

Automobile Tax Expenses

The powers that be have historically written sections into the tax code promoting business activities. One of the traditional write-offs has always been the expenses associated with using a vehicle for business purposes.

The simplest automobile tax expense situation is one in which a vehicle is used entirely for business. For example, if you have a van used for a delivery service and nothing personal, all expenses associated with the van can be written off. This is known as the exclusive use situation. For many small businesses, however, a vehicle will be used for both personal and business reasons.

Where you use a vehicle for both personal and business reasons, you can only deduct the automobile expenses associated with the business use. Keep in mind that driving to and from work is not considered business mileage, while driving from an office to meet a client is considered business mileage.

There are two methods for determining deductible automobile tax expenses. The first is a simple calculation known as the standard mileage deduction. The second is the actual expenses method. You can choose whichever deduction provides you with the biggest deduction unless you lease the car. With a lease, you must use the standard mileage deduction.

The standard mileage rate deduction is a calculation wherein you multiply your total business mileage for the year by a figure provided by the IRS. For the first eight months of 2005, the figure provided by the IRS is 40.5 cents per mile. For the last four months of 2005, the figure has been bumped up to 48.5 cents to reflect high gas prices.

The actual cost expense option is exactly what it sounds like. It is the actual cost associated with using the vehicle for tax purposes for a particular tax year. Automobile tax expenses will include gas, tires, repairs, oil changes, registration costs, licensing, insurance and so on. In many cases, the actual expense deduction will end up being larger than the standard mileage deduction.

Regardless of the method you choose, you must document the automobile tax expenses. This means keeping a mileage book and receipts of anything you intend to deduct.

Article Source: http://www.articledashboard.com

Richard A. Chapo is with www.businesstaxrecovery.com – recovery of business taxes through tax help and tax relief. Visit www.businesstaxrecovery.com/articles to read more business tax articles.

Home Office Tax Expenses

Self-employed individuals often work out of their own home. If this is the case with you, hereÂ’s a primer on home office tax expenses you can claim on your taxes.

Home Office Tax Expenses

America is a country built on small businesses. Yes, the big companies are the darlings of the media, but the guts of our economy are the little guys pursuing the American Dream from the extra bedroom. Fortunately, the tax code contains deductions tailored to help cut your tax bill.

When claiming home office tax expenses, it is important to keep a receipt for each and every amount you are claiming. When dealing with the IRS, receipts are your ammo. Keep them at all costs.

When maintaining a home office, taxpayers often wonder how they differentiate a business expense from a simply home expense. The key is the square footage. Simply divide the square footage of your office by the total square footage of the home. This number is typically represented by a percentage such as 20 percent. Put another way, the home office represents 20 percent of the square footage of the house. Once you have the above answer, you can multiply it by the total yearly amounts paid for rent or mortgage interest, insurance, maintenance, utilities, taxes, depreciation of the home and repairs. Each of these home office tax expenses figures can then be deducted.

In addition to the above, you can also deduct expenses completely related to the business. For instance, the purchase of a desk for the office is entirely attributable to the office and can be deducted in full.

Words of Caution

There are some limitations to home office tax expenses. If you are reimbursed by an employer for various home office expenses, you cannot also claim those expenses as a tax deduction. Sorry, no double dipping.

For some time, there has been an urban myth that the Internal Revenue Service keeps a close eye on home-based businesses. This may have been true ten years ago, but is clearly not the case today. To this end, the IRS has actually come out and issued clear statements to the contrary. Do not fail to claim home office tax expenses because of a fear of an audit. It is simply not a rational fear!

Running a small business can be both stressful and incredibly gratifying. Make sure you claim home office tax expenses to help your cash flow.

Article Source: http://www.articledashboard.com

Richard A. Chapo is with www.businesstaxrecovery.com – recovery of business taxes through tax help and tax relief. Visit www.businesstaxrecovery.com/articles to read more business tax articles.

Innocent Spouses – Relief from Taxes

Historically, tax issues arising from bad marriages fell into the category of “better or worse” for marriages. The IRS granted no innocent spouse tax relief, but has changed its views.

Tax Relief

When a marriage has problems, finances are almost always one of the elements that contribute to the strife. This can be particularly true where spouses file a joint tax return, which the both sign as tax payers. If the information provided on the tax return is false or inaccurate, the IRS has historically viewed both spouses as liable for the resulting assessments. If the relevant taxes were not paid, the IRS would also look to both spouses to pay the delinquent amount. In worse case scenarios, this can include criminal charges for tax evasion.

Fortunately, the IRS has modified its view of the liability of joint filers. The IRS now recognizes that innocent spouses canÂ’t control their deadbeat former spouses. It allows such innocent spouses to claim three types of tax relief:

1. Innocent Spouse Relief

2. Relief by Separation of Liability

3. Equitable Relief

If the IRS comes after you for the tax liability of a former spouse, you can seek tax relief under these three theories if you meet all the following requirements. First, you filed a joint return with inaccurate information. Second, you didnÂ’t know of the inaccuracies and didnÂ’t have any reason to. Finally, taking into consideration the situation, holding you liable for the tax would be unfair.

The IRS will evaluate your application and render a ruling on your application. The IRS may agree to simply waive any tax claim against you and go after the deadbeat spouse as the sole debtor. Alternatively, the IRS may split the tax into a his and her account, only requiring you to pay one half of the amount due. While this may not sound great, it will immediately cut your tax bill in half.

In rare cases, you can seek equitable relief from the IRS. Equitable relief simply is another way of saying making you pay the tax would be manifestly unfair. You must show you and the spouse did not transfer assets as part of an fraudulent scheme, didnÂ’t transfer assets with the intention of evading taxes, didnÂ’t intend to commit fraud, didnÂ’t pay the taxes due and you didnÂ’t know what your spouse was up to. Equitable relief claims need to be handled very carefully as the IRS views them with a very cynical eye. Nonetheless, they are a last step that can be taken when all else has failed.

Article Source: http://www.articledashboard.com

Richard A. Chapo is with www.businesstaxrecovery.com – recovery of business taxes through tax help and tax relief. Visit www.businesstaxrecovery.com/articles to read more business tax articles.

Self-Employed Tax Strategies

Self-employed individuals always cringe at the amount of taxes the pay to the IRS and state. Here are tax strategies for self-employed individuals that reduce those tax amounts.

Tax Strategies

The good news is being self-employed is one of the best tax strategies out there. Unlike a salaried employee, the full scope of tax credits and deductions available in the tax code are now available to you. The key, of course, is understanding the available deductions and organizing your business in a manner that allows you to maximize the write-offs.

The number one tax strategy for self-employed individuals is to keep receipts for every business expense and write them off. Practically anything can be deducted, so do it. Acceptable expenses include cell phone usage, business mileage, office supplies, home office deductions including part of mortgage or rent and so on. If youÂ’ve filed a tax return while self-employed, you are probably already aware of this so lets move on to more specific tax strategies for self-employed individuals.

Maximizing you non-capital losses can result in major tax savings. If your expenses exceed your income for a year, you obviously will not have to pay taxes for that year. What most people donÂ’t realize, however, is that such losses can be carried forward for seven years and deducted against future income. Alternatively, the same losses can be carried backward three years to recover past taxes paid. The end result of this situation is you can turn a bad business year into an income generator by applying the losses to taxes in other years which effectively wipes out your tax bill for those years.

Another tax strategy is to look at your side businesses. If you have one business, youÂ’ll often have a second one that is tailored to making some money off a personal interest. While you are in it mostly because you like it, you may not realize it qualifies as a business and can help you reduce your taxes. LetÂ’s assume you are primarily a self-employed consultant, but also write travel articles on the side. You may view the travel articles as a hobby, but it is in fact a business. If youÂ’ve sold or even tried to sell any of your articles to a publication, all of your expenses related to travel writing can be deducted from your taxable income. This includes trips and so on. These, deductions can significantly reduce your taxable income from the consulting business. Make sure to get a grasp of your overall business efforts, even if you donÂ’t really consider them to be a business.

Consider employing your children to save on taxes. A child under 18 that works for you does not have to pay FICA and so on. If the total wages for the year are under $4,250, they will pay no taxes and you can write off this amount as a legitimate business expense. Of course, the child needs to actually be doing a legitimate business task, but filing and similar manual tasks certainly will qualify.

Tax strategies for the self-employed are plentiful. If you are self-employed, consider getting professional help. A good professional will save you thousands upon thousands of dollars in taxes, more than making up for their fees. Oh, you can also deduct their fees!

Article Source: http://www.articledashboard.com

Richard A. Chapo is with www.businesstaxrecovery.com – recovery of business taxes through tax help and tax relief. Visit www.businesstaxrecovery.com/articles to read more business tax articles.

Income Tax Help

There are many websites on the Internet today that gives much needed income tax help for those who have no idea of what’s going on during tax time. Income tax is a tax paid on income, unfortunately no matter how little it is. It’s paid by employees and people who are self-employed and may also be payable if you are not working but you have an income, such as a retirement pension or an occupational pension. Not all types of income are taxable and it will seldom be the case that all of your income is taxed. There is no minimum age at which a person becomes liable to pay income tax. What matters is your income. If this is below a certain level, no tax is payable. There is actually no single definition in tax law of income. Income tax law divides various types of income into schedules. If an item comes within a schedule it counts as income and income tax must be paid on it. The way the tax must be paid will depend on which schedule it falls into. The most common schedules are Schedule E for employees and Schedule D for the self-employed.

There are five main steps in calculating income tax:-

Step 1: Add together all your yearly income, including social security benefits, income from renting out accommodation, wages, occupational pension, interest from bank and building society accounts.

Step 2: Take off any income which is exempt from tax. Calculate whether you can claim tax relief on any of the money you have spent over the year (tax relief usually applies to people who are self-employed and have to buy items for the business). Deduct this tax relief. This leaves income on which tax may be payable (taxable income).

Step 3: Work out which tax allowances you are entitled to. You will be entitled to a personal allowance (plus age related additions if appropriate). These allowances are deducted at this stage in the calculation.

Step 4: Multiply the taxable income by the correct tax rate. This gives the tax due to be paid that year, unless you are entitled to married couple’s allowance for over 65 year olds.

Step 5: If applicable, deduct the appropriate percentage rate of married couple’s allowance for over 65 year olds.

Some income is exempt from income tax, which means that tax is never paid on this income. This income should therefore be put to one side before any tax calculation can be done. Examples of income which is exempt from tax include premium bond prizes, housing benefit, child benefit and profit-related pay. It is therefore necessary to check whether any income is exempt from tax before doing a tax calculation. For more income tax help, all the help you need in on the internet. The IRS itself can give you income tax help and answer any tax questions you may have.

Article Source: http://www.articledashboard.com

Leeanna is an expert author who writes for Income Tax Help

How To Avoid Double Taxation Of Your Small Business Profits

Have you been thinking about incorporating your small business or self-employment activity? The advantages are many!

For starters, you’ll be protecting yourself and your family from the possibility of a business ending lawsuit. Forming a corporation is Step One on the path known as “Asset Protection” — you are moving from the world of unlimited liability to the world of limited liability.

(NOTE: For further insight into the legal advantages of incorporating, check out the article: “It Can Happen To You: Why Any Sole Proprietorship Is A Risky Business” at http://www.YouSaveOnTaxes.com/happen-to-you.html)

From a tax standpoint, there are both advantages and disadvantages to incorporating. Yes, forming a corporation can either reduce your taxes or increase your taxes, depending on what type of corporation you create.

There are two main types of corporations: “C” Corporations and “S” Corporations — and which type you choose can make all the difference in the world of taxes.

NOTE: The question of “C” Corp vs. “S” Corp has no effect on the asset protection provided by your corporation. This is a tax issue, not a legal issue.

A “C” Corporation can lead you into a Tax Trap known as “double taxation”. Yes, income from a “C” Corporation can actually be taxed twice — once when it’s earned on the corporate level and again when it’s paid to you, the shareholder, in dividends.

There are several ways to avoid double taxation. Often the easiest way is to tell the IRS that you choose to be an “S” Corp instead of a “C” Corp. The profits of an “S” Corp are not taxable to the corporation; instead, those profits are reported directly on the shareholder’s personal income tax return and are therefore only taxed once.

And once is enough, don’t you think!

Of course, any article on Choice of Entity must contain the old disclaimer, “Consult your tax professional” — I am not prescribing a one-size-fits-all approach to this issue. But for many small biz owners and self-employed folks, the “S” Corporation is a good fit because it provides protection from personal liability and avoids the nasty tax trap of double taxation — two great benefits worth checking into.

Should you incoporate your sole proprietorship and then decide that the “S” Corporation is the right fit, you must inform the IRS that your corporation is choosing “S” Corporation status by filing Form 2553, which is, in effect, an application to become an “S” Corporation.

IMPORTANT:

If you incorporate and do not file Form 2553, you are automatically considered to be a “C” Corporation by the IRS. In other words, to be a “C” Corporation, you just incorporate; there is nothing you have to do to inform the IRS you want to be a “C” Corporation.

There are critical rules regarding how and when to file Form 2553, so be sure to read the instructions carefully, or check with your tax pro.

Failure to file Form 2553 on time or filing Form 2553 incorrectly results in a rejection of your corporation’s “S” Corp application, and the corporation is then by default treated as a “C” Corp, subject to double taxation, the very trap you were trying to avoid.

To download a copy of Form 2553, go to: http://www.irs.gov/pub/irs-pdf/f2553.pdf

The instructions for filing Form 2553 are found here: http://www.irs.gov/pub/irs-pdf/i2553.pdf

Article Source: http://www.articledashboard.com

Wayne M. Davies is author of 3 tax-slashing eBooks for small business owners and the self-employed. For a free copy of Wayne’s 25-page report, “How To Instantly Double Your Deductions” visit www.YouSaveOnTaxes.com

Accounting Methods – Cash and Accrual

When starting a business, you have to determine the method you are going to use for accounting and paying taxes. The two choices are the cash method and the accrual method.

Cash Method

If you are looking for simplicity, the cash method is probably your best accounting choice. Generally, income and deductions can be claimed when payment is actually received or made. This is best shown with an example.

I open a small business and have to order business cards and stationary. I receive the products and pay the invoice on November 18, 2005. Under the cash method, I can deduct the cost on my 2005 tax return.

Some businesses are restricted from using the cash method. C corporations may only use the cash method if they have less than $5 million in gross revenues for a particular year. Professional Service Corporations can use the cash method without limit, while farming corporations can due so if gross revenues are less than $25 million. Tax shelters are prohibited from using the cash method.

Accrual Method

The Accrual Method of accounting is a bit more complex. Under this method, the focus in on the date the expense is incurred, not paid. Although this may seem a small difference, it can play havoc with your books and piece of mind.

Using our previous example, assume I order business cards and stationary on the December 18, 2005. I receive the products on December 30th, but donÂ’t pay the invoice until January 20, 2006. When can the expense be claimed? It depends on when economic performance occurred.

Generally, economic performance occurs when goods or services are provided to you. In the above example, economic performance would arguably occur when the business cards and stationary were delivered with the invoice on December 30th. Thus, I would be able to deduct the expense for the 2005 tax year.

In Closing

As you can see, the cash method is the easier of the two accounting methods. To determine the best method for your business, speak with a tax professional.

Article Source: http://www.articledashboard.com

Richard Chapo is with www.businesstaxrecovery.com – recovering overpaid taxes for small businesses. Visit our article page – www.businesstaxrecovery.com/articles – to read more tax articles.

Are You Overpaying Taxes If You Use Tax Preparation Software?

For many business owners the answer to this quandary is tax preparation software. Fill out a fairly simple interview, click “print” and out comes a completed return that will pass muster with the IRS. The answer to all your problems…or is it?

Can One Software Program Cover All Businesses?

Take a moment to consider the wide range of businesses that exist in the United States. Now cut that number down to those that can be categorized as “Internet businesses”. If you were asked to write a business plan to provide web design services to each of these services, how long would it be? It would be huge and completely useless because each business would have different needs. A Internet business selling flowers would have completely different needs from an online bank which would have different needs from a hosting company and so on. The only way you could create a practical plan for all Internet businesses would be to offer a collection of general services they could all use on their sites. Tax preparation software designers have the same problem.

There are over 15,000 pages in the tax code and over 100,000 pages of regulations interpreting those pages. Changes are made to the tax code ever year, and new regulations are issued constantly. If one were to create a list of questions for every tax deduction and credit detailed in those pages, the list of questions would be the size of a phone book! Yet, tax software programmers have somehow boiled it all down to a simple 30-minute interview process? Common sense should tell you that doesnÂ’t make sense.

As practical matter, tax software programs are designed to make sure that you claim a general set of deductions that are applicable to businesses across all industries. Most programs try to mask this fact by asking you to identify your business before proceeding. For a lark, you might try selecting another industry and then running through the interview process. You will find that the interview process is modified a bit, but you are still being asked the same basic tax deduction questions.

If you are only claiming general business tax deductions, you are paying more than you should in taxes. Ask yourself if you have seen any of the following questions in a tax software program interview:

Q. Do you store business inventory in your house?

Hint: You may be able to claim hundreds or thousands of dollars in deductions.

Q. Did you start a pension plan for your employees?

Hint: You may be able to claim a tax credit for the next three years totaling $1,500.

Q. Do you have a home-based business and a second office?

Hint: You may be able to deduct your commuting expenses each day. Yes, commuting expenses.

Q. Do you have business meetings at your home?

Hint: Did you charge your business for the space?

Q. Should you claim the standard mileage rate for your auto or the actual costs?

Hint: The standard mileage rate may not the best option.

Q. Did you modify your business location to comply with the Americans with Disabilities Act?

Hint: You may be able to claim a tax credit AND tax deduction for tax savings of $20,000 or more.

Q. Did you refinance your home?

Hint: The points you paid on your original mortgage are fully deductible now, not over the length of the loan.

This represents only the tip of the iceberg of available credits and deductions available to you. Just one of these deductions could save you thousands of dollars in taxes. Yet, you are never going to see these questions raised in a tax software program interview. The tax code and regulations are simply too large to be incorporated into a usable software program.

Your business is unique. You face and overcome issues and problems that are unique to your size, financial situation and particular business needs. DonÂ’t short change yourself by limiting your deductions by using tax software programs.

Article Source: http://www.articledashboard.com

Richard Chapo is with www.businesstaxrecovery.com – recovering overpaid taxes for small businesses. Visit our article page – www.businesstaxrecovery.com/articles – to read more tax articles.

Corporations Failing To Claim AMT Exemption Overpay Taxes By $11,000

Does your incorporated business pay alternative minimum tax [“AMT]? If so, there is a 93% chance you have been overpaying your taxes by an average of $11,000 a year according to the Treasury Inspector General.

The Office of the Treasury Inspector General for Tax Administration was created in 1999 to oversee the IRS. One of the duties of the Treasury Inspector General is to study and report the efficiency of the tax payment system, particularly the accuracy of tax collection efforts. Many of the studies conducted by the office reveal starting results, particularly when it comes to businesses overpaying their taxes.

As part of this oversight, the Treasury Inspector General is reporting that many small business corporations are incorrectly paying AMT. The AMT was enacted in the late 1990s, but proved to be a huge burden on small businesses. The tax was confusing and the paperwork was incredibly complex. An amendment was subsequently added to give small business corporations relief from the AMT. Section 55(e) of the Internal Revenue Code now contains language exempting small business corporations from paying the AMT.

Small business corporations can claim an exemption from the AMT if gross revenues average $5 million or less for the initial three years of business. Thereafter, the business can continue to claim the exemption as long as revenues average $7.5 million or less of each subsequent three year period.

According to the Inspector General, companies that fail to claim an exemption to the AMT are overpaying taxes by an average of $11,638 each year. 93% of small business corporations qualify for the exemption. Since the IRS has no duty to notify taxpayers of overpayments, many small business corporations have no idea they are overpaying taxes and are due refunds.

All taxpayers have the right to file amended tax returns for the past three calendar years. Contact us now to find out if you failed to claim the exemption to the AMT and are due a refund for 2001, 2002 and 2003. If you failed to claim the AMT exemption, you may be due a refund totaling over $33,000.

Article Source: http://www.articledashboard.com

Richard Chapo is with www.businesstaxrecovery.com – recovering overpaid taxes for small businesses. Visit our article page – www.businesstaxrecovery.com/articles – to read more tax articles.