Happy New Year! Did you procure the services of independent contractors/freelancers during 2008? If so, then you send forms to those people by January 31, 2009. This year January 31 is a Saturday, so you actually have until February 2. 1099-MISC (Miscellaneous Income) forms are the forms must be issued by your business when you pay independent contractors $600 or more for services. To complete the forms, you need a list of all the independent contractors, their current address and social security number.
You can purchase the forms and envelopes cheaply at Staples ($15.99 for 24 forms) or you can order them from Quickbooks. Make sure to purchase 1099-MISC forms. Last year, one of my clients picked up the 1099-INT forms by mistake. If you are using Quickbooks, you can run a 1099 vendor report to get a list of the total amount paid to vendors. If you don’t use Quickbooks or another accounting system, then just review your check register and add up all payments made to each independent contractors.
The deadline for issuing 1099 forms is February 2, so get the forms and envelopes now!
I just got an email from Geezeo.
Geezeo wants to help the 50 million Americans between the ages of 18-44 that will make money-related New Year’s resolutions. They offer tools that help people better understand their money, set up easy-to-use budgets, and achieve their financial goals. With a commitment to helping users reach their goals, Geezeo is introducing The Great Geezeo Bailout! Between January 2, 2009 and March 31, 2009, Geezeo users can win a very grand prize: Geezeo will pay someone $6k in cash to pay off their bills!!
I’m here today at New Work City getting stuff cleaned up for the end of the year. I have unsubscribed to over a dozen email newsletters, delete draft emails and followed up on advertisers for Cupcake Takes The Cake. In the meantime, I have heard about three time tracking sites from fellow co-workers and twitterers.
Lets Freckle
KloK
Less Time Spent
Mint has a free iPhone App that is now available for download. You can check your bank and credit card balances and watch your investment performances. If you don’t have an iPhone, you can set your Mint.com alerts to come to your phone via SMS. Also, check out this article in the New York Times about using online personal finance sites like Mint, SmartyPig and Wesabe.
Want to send money to your Twitter friends? TwitPay is a great way to donate money quickly to your Twitter community.
BTW, I will be attending South by Southwest Interactive in 2009. I am so happy and honored to be on a panel with Aaron Patzer of Mint.com and the founders of Smarty Pig. The panel is called, ”Finance 2.0: Money Management to Save this Generation” panel at SXSW is scheduled for Monday, March 16th.
I am a Board Member of RightRides, and I hope you will consider donating. Charitable donations to nonprofits are tax-deductible, so please consider giving before the end of 2008. Zip Car is our wonderful sponsor providing cars for safe late night rides homes in the New York City.
Question: Is the bank balance shown on your online banking the actual amount available?
A friend of mine ran into this problem at Bank of America. I totally feel for her and for my bookkeeping clients whose balances were not exactly what the bank says. Even though the banks offer “real time” bank balances, it is actually not true. The problem is since transactions posted in the afternoon (i.e. deposits) usually don’t appear until the next day whereas debit card transactions at a store, restaurant are immediate no matter what time of day. That’s why bank reconciliations are still important.
Online banking sites use the terminology “pending transactions”, “uncollected amounts” and “amount available” but what does it really mean? As much as I love online banking and personal finance sites, you have to remember that the more frequently that you have automatic debits and credits to your bank account, the more you have to be vigilant of what you actually spend.
Here’s a great blog post listing questions that small business owners will ask about social media. If you are a small business, ask these questions, and if you provide social media strategy, then be prepared to answer these questions.
clipped from directmarketingobservations.com
How much is it gonna cost?
But first tell me what exactly it is?
Is it like Facebook or Myspace? Because that’s all I really know.
Twitter? I’ve heard about it, but I’m not really sure what that is.
A blog? I don’t see what I blog is going to do for my business, besides, I don’t have time nor the desire to write one.
So you’re going to “show me” how social media is going to drive business? Ok…(proceeds to wait)
Who else is using it?
Are there any companies like mine that are using it?
So can you guarantee this?
Who’s going to do this? You? or us?
How long is this going to take?
I still don’t understand but I’ll take your word for it.
Can you get our website ranked higher in Google?
Will I make money?
Will I save money?
One way of getting organized to use project management software to help you execute, manage and communicate project objectives. Here’s a list of some of the project management tools out there.
5PM
BaseCamp
PlanZone
QuickBase
Zoho
The end of the year is upon us, and it is time to get organized with your accounting records. If you talk to your CPA, he/she would highly recommend getting on a robust accounting system for your business. Check out Quickbooks, Freshbooks, Less Accounting or Harvest. Leave the Excel spreadsheets alone!
This is not an exhaustive list, but an outline of what you need to
prepare for the end of the year
Enter final transactions for the year
- Review tax form (1040-Schedule C) from prior year and compare to this year’s expenses
- Enter ALL cash receipts for business expenses (taxis, business meals,subway, train)
- Reconcile all your accounts and enter any missing transactions
- Work on reducing receivables (Follow up with clients/customers to get paid)
- Write-off bad debt if necessary, but work on getting paid by customers/clients first
- Make SEP IRA or 401K contributions and donations to charity to reduce taxable income
- Make all asset depreciation entries (only applicable for equipment that you had put on a depreciation schedule)
Organize: Make Life Easier on Your CPA and Understand What Happened During The Year
- Organize receipts and statements for expenses that will be itemized on your Schedule C/1040
- Review your budget and compare actual to budget which will help develop 2008 budget
- Inquire from your CPA as to what reports, form and any other documentation are needed for tax preparation
- Ask if year-end reports should be on a cash basis or
accrual basis
- Print out a copy of general ledger
- Back up the Quickbooks file in case of any data loss
- Send a copy of your Income Statement and Balance Sheet to your accountant at the end year to get an idea what your taxes will be in March 15 (quarterly tax payment) and/or April (personal income tax deadline).
Employee/Independent Contractors
- Order 1099-MISC forms (Independent Contractors) and W-2 forms (Payroll Employees) early. The forms are much cheaper if buy at Staples then via Quickbooks.
- Get Independent Contractors and Employees current mailing address, SSN and the total payments made to them for the year.
This issue applies to me especially, but I knew many of you also struggle with budgeting when you are self-employed. Jean Chatzky advises that you plan of cushion of six months if possible.
clipped from www.msnbc.msn.com
Q: How do you budget if you are self-employed? We may have an influx of cash one month and then very little the next. I don’t know how much to keep in our checking account, just in case we don’t make any money the next month. I don’t want to stash too much in a low-interest checking account, but I may need access to it quickly. — Amy in Louisiana
A: You’re right Amy, it’s difficult to budget if you don’t know how much is coming in each month, but it’s not impossible. First of all, just because you need accessible cash doesn’t mean it has to sit in a low- or no-interest checking account. You can find savings accounts with low deposit limits and interest rates in the 3 percent range, and you’ll have easy access to your money if you need it in a pinch.
Aside from that, in terms of balancing the months that net bigger paychecks with those that don’t, it’s all a matter of planning.
The founders of social bookmarking community Kirtsy will be hosting the first of a series event called, Hands on Kirtsy. The New York event will be Monday December 1st at the Hudson Hotel.
Entrepreneur Patricia Handschiegel writes about the New Power Girls in her latest column in The Huffington Post.
Also, Girls in Tech is having drinks on December 9 at Lela Bar. RSVP here.
Saving money is usually boring and solitary, but it is absolutely necessary. One of the cool things about SmartyPig is that you can get everyone in on the act. When you set your FREE account, you can make you savings goal public and broadcast out to your friends on Facebook, your blog or website. Plus when you reach your goal, you can opt to receive a debit card for that amount saved and then get to holiday shopping with no credit card hangover.
Read my prior post about Smarty Pig.
“It is the time to be essential.” Hearst President Cathie Black said in response to today’s job market and the current economic crisis. Cathie Black was the keynote speaker at WCBS Radio’s Working Women Luncheon which I attended today at the Javits Center.
It was “bitch cold” this morning, so I was happy when I walked into the warmth of the River Pavillion. Plus, there was a goodie bag waiting for me as soon as I checked in at the registration desk. I met some very entreprising women before sitting down at my table including Venita who runs Danzemergencee, a niche temp firm for dance and fitness instructors and Andrea Dey, event planner.
At lunch, I met the sister of fashion designer Dara Lamb. Her custom women’s business suits are beautiful and professional. I also met Mary Kagan, CPA and a fellow blogger Carmina Perez, whose blog is Mogulette-In-The-Making. I just glanced at her blog, and she too attended the Econ Women Conference last month. [Smart Small World]
After the luncheon, I had to run and do bookkeeping in DUMBO, then host a Cupcake Takes The Cake Meetup in the Village. I’m exhausted.
Even if you are a start-up and made little this year, you can’t rely on low profit only to minimize your tax bill. Business Week has 10 great tips that can help.
- Buy new stuff. If your business has less than $810,000 in depreciable property, Section 179 of the tax code now lets you deduct up to $250,000 (up from $125,000 last year) on purchases of new equipment. Then you can take bonus depreciation equal to 50% of the equipment’s value, all before regular depreciation kicks in. Just start using the new gear before year end. [external hard drives, laptops, printers are good ones to get now]
- Pay your reservists. Get credit for paying employees who have been called up by the reserves. The Heroes Earnings Assistance & Relief Tax Act of 2008 lets businesses with fewer than 50 employees get a tax credit when they pay reservists the difference between their civilian and military pay.
- Drive A Green American Car. Buy a hybrid car for your business and you’ll get a tax credit based on the vehicle’s fuel efficiency. The credit comes to $1,300 on the 2008 Chevy Malibu, or $3,000 for a Ford Escape or Mercury Mariner two-wheel drive.
- Maximize Your Mileage Deduction. [If you haven’t been keeping up, then you may not know the current maximum mileage.] On July 1, the IRS raised the standard mileage deduction rate to 58.5¢ a mile. The rate remains 50.5¢ per mile for driving during the first six months of 2008.
- Take Your Losses. [They reduce taxable income.] You probably know that investment losses in taxable accounts can be used to offset capital gains, but what if you have no gains? Use the losses to offset up to $3,000 in income. A $1,000 loss that offset $1,000 in capital gains will save you $150 at the 15% capital gains rate. But that same $1,000 can save you $350 if you’re in the 35% tax bracket and offset $1,000 in income.
- Fund Your Retirement Account. The best tax deduction is still a retirement account, partly because
you don’t have to buy a thing to be entitled to it. This year, you can fund a defined contribution plan with up to $46,000 ($51,000 if you’re over 50 and qualify for a catch-up contribution).
- Become a Landlord. Because of the wonders of depreciation, commercial real estate is one of the few investments that can provide positive cash flow while reporting a loss for tax purposes, says CPA Michael Hanley, managing partner of Merl & Hanley in Smithtown, N.Y.
- Opt Out of Installment Sale. If you have sold a capital asset, such as land, this year, it might make sense to pay the taxes on the gain you receive all at once, even if you’re taking payments on an installment basis.
- Speed Up Expenses. If you normally restock your office supplies in January or February, or you have a business trip planned for early next year, try to do it now. The more expenses you book this year, the more you can write off.
- Clean Up Your Books and Get Ready For Next Year. If you’ve got inventory that’s collecting dust or clients who absolutely won’t pay, now’s the time to throw in the towel. Write off that dated inventory and stock up on goods that are moving faster.
Most start-up entrepreneurs and micro-businesses are prepared for the economic crisis because they already have a habit of working within a small budget and having little cash flow.
Shoestring Mag gives loads of frugalista tips to lead to help you save.
Bartering is a good way for small business for conserve cash and rack up savings.
MixedInk is a free web application that facilitates co-writing. This is great for business plans and proposals.
