Tuesday, February 23, 2010
Any kind of paperwork dealing with investments must be kept for as long as you have that investment. If you trade that investment in, roll it over, or carry it forward, you must keep the old original documentation as part of the required history for the new item.
There are generally tax consequences when investments are sold. Sometimes it’s a loss, sometimes a gain. In either case, you have to be able to establish what you paid for that investment, including enhancements to, or changes in, that investment. That’s called the “basis.” The gain or loss is calculated by subtracting the basis from the sale price. Therefore it’s extremely important to know exactly what that basis is.
Typical financial investments are stocks, bonds, and mutual funds. Each kind of investment has a constantly changing value that is different. Stocks may split, there are many varieties of bonds, and mutual funds change in share value on a moment by moment basis.
Rental property is another common investment. What you pay for the building, plus closing costs, plus improvements, less depreciation taken gives you a running total of the basis. When you sell, you’ll need to be able to go back to those original closing documents, and add the cost of the improvements you’ve made.
There is an infinite variety of other kinds of investments that one might make. Each case may be slightly different. The basic requirement, no matter what kind of investment, is that you know when you bought each investment, and how much you paid for it. In other words, you must know your “basis.”
Marketing takes many forms. Today, starting early in 2009 and continuing onward, the trend for marketing is clearly to the web. Facebook, Twitter, and LinkedIn are putting many businesses in touch with serious quantities of new business. The people who get in early always get the best seats so now is the time to create your presence. The masses are starting to pour in. You can see an example of a Facebook Business Page by going to Facebook and typing NumberCrunchers in the search box. Facebook’s term for it’s business pages are “Fan Pages.” There are dozens of other places and ways to market online. They are free but it does take time. We do offer assistance options. See our sister site at www.businessbuildermarketing.com
The Business Builder Book Club was started by the Inner Office, Inc. Success Center at the end of 2007 as a community service to the local business community. We choose one top rated business book each month, prepare a summary, and, on the last Tuesday of each month, we meet to network, mastermind, and learn! You do not need to be a client of The Inner Office in order to attend but space is limited. Inner Office clients are given preference. There are two requirements. Everyone MUST RSVP by 5 PM Friday prior to the meeting and everyone MUST bring a copy of the book with them to the meeting. More details can be found on
www.businessbuilderbookclub.com
Saturday, December 26, 2009
The end of the year is a good time to go through your files, pack away the current year, throw out what you don’t need, and set up your systems for the new year. There are a few issues you should be aware of. The document retention limit for tax returns is generally said to be three years. That’s only correct if those records have no effect on any other year. Records that prove basis, or investment of any kind, must be kept until that asset, and any trail leading to it, or from it, are extinguished by disposal of the asset. Another misconception is that payroll taxes share the same record retention guidelines as income taxes do. They don’t. Payroll Taxes can be questioned up to ten years after the fact. State Property Tax and Real Estate Tax records may vary from State to State but I would recommend keeping them forever, or until you’ve disposed of every asset in any trail passing through a given document. So, in summary, standard expenses like your telephone bill, heat, office supplies, inventory, etc. can be disposed of based on a three year from date of filing age but that’s about it. Take great care with other documentation because you may very well still need it.
Saturday, December 19, 2009
Erin Perry who has been a client of The Inner Office, Inc for a decade, Charter Member of the Business Builder Book Club, and owner of Chocolate Rose Bake Shop observed something very interesting which she blogged about a while back. I think it’s most appropriate for this time of year. She pondered the phenomena of New Year’s Resolutions and wondered if it wasn’t just another form of procrastination. I have to agree that it’s true! If you really want to rock your own world, do what you know you’re supposed to be doing as soon as you realize you’re not! I found myself saying this sentence yesterday,”The way you get something done is to do it.” If you don’t do it “until next year” it won’t get done until next year, if then, since most resolutions don’t even last the 30 days requisite to become habits! If it’s worth taking the time to mull over, and write down, if it’s worth doing at all, it’s worth doing NOW. Forget New Year’s anything. Forget “resolving”. Do it. Do it NOW!
Friday, December 11, 2009
QuickBooks has issued a mid-year upgrade for 2009 which, unlike most updates, requires a complete upgrade of all databases and all installations. This patch is called “R9″ and is now available for QuickBooks 2009 and Enterprise v.9. It’s been my experience that on many peer-to-peer networks at least one installation requires manual intervention. QuickBooks users have become so accustomed to the endless automatically installed updates that we scarcely notice. Most users have just clicked an affirmative response to upgrade and on most computers that will be the end of it. There will be some that one upgrades, and upgrades, and upgrades again. By about the third try, it becomes obvious that it simply isn’t working the way it’s supposed to. If that’s what’s happening to you, just go to http://support.quickbooks.intuit.com/support/Default.aspx, and follow the instructions to manually upgrade your installation.
Added 12/18/09: QBs announces that there are major Sales and Use Tax issues with R 9 and now R10. Before you do any Sales and Use Tax reporting, please manually calculate your liability to make sure it’s correct.
SUMMARY OF STANDARD MILEAGE RATES
(1) Business 50 cents per mile
(2) Charitable contribution 14 cents per mile
(3) Medical and moving 16.5 cents per mile
The Standard Mileage rate can not be used for any vehicle for which depreciation has already been taken. Whether a taxpayer chooses to use Standard Mileage or the alternative “percentage of exact expenses” a mileage log must be maintained. The mileage log must be maintained contemporaneously with the usage and must detail the place driven and the reason. Passenger vehicles not for hire fall under these regulations. That means they apply to the typical pickups driven by most contractors and subcontractors. If you don’t want to abide by these regulations, buy a service van with racks in the back. If you want to drive the typical car or pickup, these rules do apply.
Friday, November 20, 2009
I don’t want to beat a dead horse but every time I turn around there’s a new wrinkle or a new bit of fine print that an insurance company or tax agency is using to their advantage. The battle rages on! As strapped governments and insurance companies look for more revenue, audits of all kinds are on the rise. Running your business on the wrong side of the law is not only costly in terms of money, but the stress completely destroys lives and families. If cheating is blatant, many of these infractions can be criminal offences. Business owners are becoming acquainted with the information age with an impact of driving full speed into a bridge abutment. If you think the way to success is to somehow get around these regulations you have to be far more aware of them than if you intend to comply. When you analyze the expense of doing things wrong, it’s cheaper not to. If you’re doing something because you think everyone else is, remember the lemmings. The herd mentality is the easy way out and is rarely right. Cut away before you feel the water.
We’re living through very exciting times. Our grandparents or great grandparents watched humanity move from horses to cars. Today’s changes are just as big and keeping up with them is an enormous challenge. Today, more than ever, people want to know, like, and trust, those with whom they do business. We’ve been burned by people who lied on mortgage applications, and those who greedily looked the other way, and even encouraged the lying for their own good. Technology is playing a big role in creating the level of knowing, liking, and trusting necessary to do business today. The driving forces are called “Social Media”. Main components are Twitter, Facebook, LinkedIn, and blogs. Valuable content – as I’ve provided for years now in print format – is the best way to get people to know you, your company, and your genuine desire to make their lives better.
We’ve been getting a lot of calls about which meals are deductible and at what % so, here’s a quick overview on that topic: First meals must have a bona fide business purpose and there are a lot of devils in these details. Frequency even counts. Business meals must generally be “occasional” or they may well become “benefits,” “wages,” or compensation to somebody else. Just deciding that you’d rather run out for a sandwich at noon does not make lunch deductible. Cost sharing isn’t deductible. The typical, legitimate, business meal is generally 50% deductible as are meals eaten while traveling for business. Holiday parties or social events provided to groups of people are 100% deductible. Snacks and drinks provided and meals provided to more than half of the employees on the employer’s premises for the convenience of the employer are 100% deductible.