25 MarBitcoin Is Property; Not Currency

Bitcoin, bitcoin coin, physical bitcoin, bitcoin photo

In case you were wondering, the IRS has released a statement on Bitcoin. From the USA Today:

The IRS will treat digital money such as Bitcoin like property, not currency for tax purposes, the agency said Tuesday in a notice.

Although Bitcoin may operate like coin and paper currency and can be used to pay for goods and services, no country accepts it as “legal tender,” the IRS said.

“Virtual currency is treated as property for U.S. federal tax purposes,” the notice said. “General tax principles that apply to property transactions apply to transactions using virtual currency.”

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15 MarSpring is Almost Here; Finovate is April 29th

I met Larry Chiang a few years ago at the Roger Smith Hotel, and I asked him to join my panel at SXSW Interactive. The panel was titled, “The Broke Diaries-Blogging and Tweeting About Living On The Cheap”.  Since then, I have run into Larry at Finovate Fall a few times.  I have covered Finovate on this blog for several years, and I have co-produced tech events and cupcake events. This spring, I am going to Finovate in San Jose.  Larry and I chatted today about me doing events surrounding Finovate to connect people who are doing cool things in the fintech field. Below are my notes.

*#ReverseVC Event is under the Larry Chiang 100% Affiliate Program.

 

 

13 MarMobilligy: Mobile App For Bill Payment

Mobilligy is a free mobile app for bill payment.  It is available on Android, iOs and Windows Phone. It has been well received and reviewed, so I am going to try it.  It seems to be a good app that could also be “white labeled” for banks.

Via Digital Trends.

Mobilligy is up against:

  • Manilla also wants to pay your bills. In testing, we found that Mobilligy has considerably more options for accounts that can be linked to it. Our credit union, Web host, and gym aren’t on Manilla but Mobilligy has them. You also can’t pay your bills using Manilla – something you can do with Mobilligy. Manilla does store a copy of bills and statements as PDFs though, which is a nice feature that Mobilligy doesn’t offer.
  • Mint is a good compliment to Mobilligy. It’s more focused on helping you manage your entire budget, which Mobilligy doesn’t really do. Mobilligy just deals with your bills. Mint offers reminders for upcoming bills, but it’s pretty bare bones compared to Mobilligy.

 

 

04 MarRisky Business: Square Launches Square Capital

I  love the convenience and ease of use of Square for merchant transactions. It is great for small businesses who are just getting started and/or those who operate in flea markets, pop-up shop or even on the streets. Street vendors, food trucks, jewelry artisans have really taken to Square. It can used with an iPod, iPhone, iPad  and many Androids as well.

However, the introduction of a new service, Square Capital is a risky one for both Square and the businesses that use them. Square Capital will loan money to Square users.  Does Square really want to be in the  financing business? It started as tech gadget, but this new offering comes with more scrutiny.

From Re/Code

The biggest criticism of these types of financial products is that the lender is cutting into a business’ daily cash flow to repay the advance, often during a period when a business can least afford it. On the other hand, if a business makes nothing, they pay nothing to Square, unlike with some other cash advance programs where payment is still required.

 

Cash flow can make or break any small business.   The ease of getting a loan from Square may not be worth the risk.

 

 

04 MarNew Simpler Tax Calculation For Home Offices

I was reading this informative article on Business News Daily about tax advice for small businesses and spotted this:

For 2013, taxpayers are able to take a standard deduction of $5 per square foot of home used for business (up to 300 square feet). This greatly eases the burden on taxpayers trying to calculate the home-office deduction.

Yay! This is great news! You can read the full details about this simple calculation on IRS.gov.

17 FebHow to Handle the 1099-MISC You Just Received

This post is brought to you by GoDaddy Online Bookkeeping (formerly Outright) the simplest way to manage your small business finances online. Sign up today for a less taxing tax time!

Oh boy, another tax form in the mail! As an independent seller, freelancer, or small business owner it can get a little tiring to continually get new forms in the mail or your email, especially if you have no idea what they are or what they do. With all the other stuff you have to worry about as a business owner, tax forms can cause a big headache.

Most of them, though, are fairly easy to deal with. In fact, most of the tax forms you receive are not only easily explained, they’re also more helpful than you think. It’s easy to panic when a form like the 1099-MISC comes in, but once you take a closer look you realize just how useful it is.

So what is this thing?

The 1099-MISC is a form that, as a freelancer or independent seller, you should become very familiar with. More than likely you’ve received not just one but many of this particular form depending on how many clients you have.

Why? Because the 1099-MISC is similar to a W-2 from your employer if you have a part-time or full-time job. Each one is revenue information from every client you’ve had in the past year. If you have one client, you only get one 1099-MISC; two clients and you get two, and so on and so forth. Each one reports how much you made through each client. (If you made less than $600 from a client, they aren’t required to send you a 1099-MISC, though some do anyway.)

So why don’t they send a W-2 and be done with it? That’s because taxes are handled much differently with a freelancer like you versus an employee. An employer would take out taxes for you and report them to the government agency that wants them. As a contractor you’re responsible for paying your own taxes to the IRS and state taxing authorities.

This is why there’s no information on your 1099-MISC about taxes – it’s just about how much they paid you for your services. If you charged them $1000 for two separate jobs, the 1099-MISC will show $1000.

What good is it?

You may be wondering why you get this form if you already know how much you charged your clients. There are two answers to this: one, the IRS requires this information as well, and it’s also to independently verify with you that the amount is correct.

 

So the first thing you should do is go over your records and see if what they sent to you is right. If there’s a discrepancy, it needs to be resolved ASAP. If not, the IRS might want more money from you! If everything is correct, it’s time to enter it all on your taxes.

After that, don’t think you can just toss them in the recycling bin. Make sure to keep them around for at least a few years (ideally seven) just in case something comes up later on with either your federal or state taxes.

How many 1099-MISC forms did you receive this year? Was everything correct?

11 FebTax Filing For Entrepreneurs And Creatives

Tax Return - 1040

I am open for business. From now until April 8th, I will be doing online tax preparation for creative and entrepreneurs.

Have 1099s from several different vendors?! Have W-2s? I can do your taxes. I am an experienced tax preparer specializing in working with creatives, freelancers and entrepreneurs. I have prepared taxes for bakers, comedians, chefs, entrepreneurs and small business owners. If you are filing a 1040 EZ or a 1040 Schedule C, I can help. I am an experienced bookkeeper with a bachelor’s degree in accounting. I can find tax deductions applicable to YOU.

I can offer a free 15 minute consultation over the phone or via Google Hangout/Skype. Then I will set a flat rate for my services based on the complexity of the tax filing and the forms available. Tax filing range: $150 – $350 which includes both FEDERAL and STATE tax filing. Contact me via this form.

05 FebTax Apps and Websites To Help You Do Your Taxes

Chocolate Chip Cookies
These homemade chocolate chip cookies have nothing to do with taxes, but I figured it would grab your attention.

Turbo Tax commercials are shown frequently as well as H& R Block, but there are other websites and mobile applications you can use to file your taxes.

First, collect all your tax forms which show income in 2013. This includes W2, 1099s, interest income, unemployment benefits, disability and worker’s compensation.

Second, collect all the deductible expenses for the year. If you have lots of paper receipts, then you may want to get them organized and scanned using Shoeboxed.

If you are self-employed and are filing a 1040 with a Schedule C, you may want to check out Go Daddy Online Bookkeeping.
By entering all income and expenses into software, it will populate a Schedule C for you.

For sales taxes, check out TaxJar – TaxJar helps eCommerce sellers automate sales tax; this saves hours and hours of pulling reports and organizing them into spreadsheets when you are a multi-channel seller. TaxJar works with Amazon, Etsy, PayPal and Shopify sellers.

Check out the IRS.gov site for filing deadlines and new tax benefits. In some cases, you can e-file Federal taxes for free. You can track your return and refund as well.

If you absolutely cannot file your taxes by April 15th, you can file an extension with FileLater.

26 Jan10 Tax Write-Offs You Can Use To Your Advantage

Tax

Via Mashable, here are 10 tax write-offs (deductible expenses) that you can use when filing your taxes this year.

  1. Education
  2. Job Hunt
  3. Home Ownership
  4. Health Expenses
  5. Charitable Donations
  6. Moving For Your Job (only if you don’t reimburse by your employer)
  7. Energy Efficiency Updates to your home
  8. Self-employment expenses
  9. Children
  10. Parent as Dependents

Related:

Tax deductions for Bloggers

 

25 JanBusiness Owners: Do You Need to Send Out Form 1099-MISC This Year?

This post is brought to you by GoDaddy Online Bookkeeping (formerly Outright) the simplest way to manage your small business finances online. Sign up today for a less taxing tax time!

Whether you’re brand new or a total pro at this “business” thing, taxes can be confusing. Sometimes you’re so sure you don’t need to send in this form or that form but it turns you needed to submit it anyway for whatever reason. Or you suddenly find out that you misreported your income for the year because you left out a form you received out of the blue – whatever the case, it can be a total pain to deal with.

One problem area for many business owners is knowing which tax forms to send out to others. You have to report how much you paid out to employees and freelancers so they can do their own taxes. But which form is for which person, and do you actually owe anybody anything for last year?

Here’s how to tell if you need to send out any 1099-MISC forms to people you’ve paid money to last year.

What is Form 1099-MISC?

The 1099-MISC is a form that reports how much you paid to a freelancer or contractor. If you’ve ever worked freelance or independently before you’ve no doubt run into these little forms before.

Why the special form, though? When you have a part time or full time employee, you do most of the heavy lifting for them when it comes to taxes. You take out a certain percentage for taxes and give them what’s left over so they can eat and pay bills and go bowling.

Freelancers and contractors are different. You don’t pay their taxes for them – they get to handle all of that. So it stands to reason they would need a different form for their federal and state taxes.

You simply report how much you paid out to each contractor with the 1099-MISC. They in turn use it to do their taxes; not just federal, but they can also use it for QETS. This is why it’s important to get it to them on time (by the end of January). Not to mention, of course, you could face fines and other penalties if you fail to send them out.

Less commonly, form 1099-MISC is used to report other miscellaneous types of funds you paid. We wrote more about the various usages of form 1099-MISC here.

Does it Make a Difference?

So W-2, 1099-MISC, employee, contractor – does any of this actually make any difference? Will anyone notice if you send out the wrong form?

In fact, companies have either been confusing or intentionally misrepresenting the type of workers they’ve been getting for jobs in the past. So much so that the IRS started cracking down on what exactly defines a contractor or freelancer vs. an employee.

So don’t try to just send a W-2 if you hired a contractor and vice versa. If you hired someone to do an independent job, whether it was once or a thousand times, they’re a freelancer and you need to send out a 1099-MISC. Don’t face the ire of the government over a simple tax form, and again, make sure you get everything out on time so there are no fines and penalties to sneak up on you!

09 JanVital Small Business Tax Dates to Remember in 2014

Tax season is about to come pound on your door demanding all your attention. When it does, you don’t want to get overwhelmed and forget an important date. If you need to update your calendar, we’ve listed some of the most important ones to mark down so you don’t end up with an unfortunate tax time penalty.

(These dates assume that you are a sole-proprietor or LLC.)

January 15th – 4th Quarter Estimated Tax

If you’ve been in business a little while you know all about quarterly estimated taxes, or QETs. So don’t forget that the 4th quarter payment is due on January 15th, lest you face increased payments and problems in April.

If you’re new to the small business or freelancing world, QETs are tax payments that replace having taxes taken out of your paycheck every period. They’re calculated by adding up all the money you made during the year, figuring out the tax you would owe (federal, state, etc) and dividing by four. Keep this in mind as this won’t be the last time you hear of QETs.

January 31st – Send out 1099-MISC

Did you hire a contractor or freelancer for temporary work in any capacity? You have to let them know how much they made through your company, if you paid them $600 or more. They use this info to do their own taxes.

The way you do this is through a 1099-MISC tax form. They have to be sent out by January 31st, so don’t dawdle.

Early February – Receive the 1099-K

Have you ever wondered how the IRS tracks sales through sites like Amazon for tax purposes? Well, for a long time, they couldn’t, and it caused big problems. Now online sellers have the 1099-K form to deal with, which reports both to the IRS and to the seller how much they made over the year from various payment processors (Amazon, PayPal, StubHub, etc.). If you made over $20,000 through 200 or more transactions, you’ll get this form in early February. Use it as a tool to help you with your taxes.

January 28th through February 4th – IRS begins accepting returns

While normally you could knock you taxes out as soon as all your necessary forms came in, 2014 might be a little different for you. That’s because the government shutdown in 2013 pushed the IRS’ operations back a little, so you can’t submit until the dates listed above. The exact date isn’t known yet but it shouldn’t be any later than February 4th. Feel free to start compiling your return early, however.

April 15th – Tax Day and QET first quarter due

Today’s the big day. Your taxes are due to the federal, state, and local governments. If you’re not able to finish them in time, your extensions are due on this day instead. This will give you a 6-month extension, although the extension is only to file the necessary forms – you have to pay any estimated taxes you might owe or face penalties.

Speaking of estimated taxes, today is also the day your first quarter QETs are due. Because this is such a huge day for business owners tax wise, it’s a good idea to plan a day earlier in the year to get your paperwork in order. This can prevent you running into trouble as due dates rush up on you.

When do you plan to file taxes in 2014?

12 DecIn My Back Pocket: Top Money And Finance Stories of 2013

Bitcoin, bitcoin coin, physical bitcoin, bitcoin photo

Do you use Pocket?!  It is must for saving content to read and/or share later.  Pocket has compiled lists of the most saved stories of 2013. The categories include food, entertainment, money, politics and more.  Many of the top money stories are about personal finance, retirement, saving money.  Of course, Bitcoin, is one the most talked about money topics this year.  I personally am not a big fan of Bitcoin, but who knows what will happen in 2014.

Check out the top money stories of the year.

 

05 DecFinovate Europe: Feb 11-12

On February 11 and 12, Finovate returns to London with Finovate Europe 2014, a two-day showcase of cutting-edge financial and banking technology innovations from both leading established fintech companies and hot young startups.

FinovateEurope 2014 will feature our demo-only format with over 60 companies receiving just 7 minutes on stage to demo their latest innovations to the entire audience. It is a fast paced format. I have attended Finovate in New York for three years.

03 DecBench: Online Bookkeeping Service

bench 2

(Photo by  Claudia Lee)

I just heard about Bench via my friend Rosie’s newsletter and it looks good.  It is an online bookkeeeping service based out of Vancouver, but they handle finances for US based businesses as well.

The pricing is around $150/month and included in that fee are financial statements that you’ll later need for filing taxes as well as personalized support. The software syncs with your bank accounts so the accountants can easily access the information they might need to help you and on top of the basics, they also offer a receipt-scanning & organizing tool.

 

Shoeboxed already does receipt scanning and Go Daddy Bookkeeping (formerly Outright) does bookkeeping and prepares a Schedule C, and those two services cost way less than $150/month.  Bench is apparently adding the personal touch of a bookkeeper with existing technology as an added value.   I would love to talk to anyone who is using Bench.

09 NovSmall Business Saturday Is November 30th #shopsmall

This year, Small Business Saturday is on November 30th. Small Business Saturday is a day dedicated to supporting small businesses across the country.
Founded by American Express in 2010, this day is celebrated every year on the Saturday after Thanksgiving.  The partners for Small Business Saturday this year are businesses that entrepreneurs often use, USPS, FedEx, Foursquare and Twitter.  Your business can participate. Download the media kit.