The QuickBooks Team Blog

Payroll! Need I say more?

OK -- I will come clean and say up front that I am highlighting Intuit's different payroll options.  One of the reasons I am doing this is because my friend, Paul, built a great site that highlights all of Intuit's Payroll related goodies.

They include:

• Standard Payroll handles the basics of pay calculations and check printing.
• Enhanced Payroll Plus also helps businesses fill out federal and state tax forms.
• Assisted Payroll Plus includes some outsourced services, such as tax payments.
• Complete Payroll is a full-service package that includes some human resource management.
• Online Payroll processes payroll for QuickBooks Online Edition customers. 
• Direct Deposit, an optional add-on to most other Intuit payroll services, electronically transfers employees' pay directly from your business's bank account to theirs.

As a small biz owner, you have specific payroll responsibilities that are required by government agencies. These agencies can be federal, state or local. Some of these responsibilities include, but are not limited to, withholding amounts from your employees' compensation to cover income tax, social security, Medicare, and other payments. Yes, I know that this all sound a bit like Lions, Tigers and Bears...If does, then we are still on the same page. If it doesn't, here's some additional info on basic payroll 101 stuff.

And if you want to learn more about payroll, maybe you should attend the American Payroll Association Leadership Forum on Payroll Best Practices. It takes place in August 16-18th in Chicago. God, can you believe August is here already.

Patents, Patents, Patents

I am still on traveling around the East Coast, and one of my brothers has been asking me how to patent his idea for an interesting product ---- He is hoping to develop a widget/product that would plug into his car's cigarette lighter, where he could plug in three devices: his iPod, his cell phone and his satellite radio.

(He is a Howard Stern fan and needs to listen to Howard all the time).

I told him that The U.S. Patent and Trademark Office (USPTO) issues three different kinds of patents: utility patents, design patents, and plant patents.

According to the USPTRO, a utility patent is the most common and to qualify for that:

1. A process or method for producing a useful, concrete, and tangible result such as computer software, .. or maybe even a process for creating a blog on the web. (by the way, I am using a MAC which with TypePad has no WYSIWYG, so maybe I should create a patent for that) Finally updated this on a PC
2. A machine such as what as my brother's ideas (see end of post)
3. An article of manufacture (such as an eraser, a tire, a transistor, or a hand tool)
4. A composition of matter (such as a chemical composition, a drug, a soap, or a genetically altered life form), or
5. An improvement of an invention that fits within one of the first four categories.

If my brother's widget passes one of these four sniff tests, than he has passed step one. But there are other small steps for him to pass. The invention must

1. Have some usefulness (a la utility)... such as make it easier to play with more gadgets while you drive.
2. Be novel (that is, it must be different from all previous inventions in some important way)... not sure using the cig liter for 3 vs. 1 electronic gadget is different enough.
3. Be not so obvious to somebody who understands the technical field of the invention.

For design patents, the law requires that the design be novel, nonobvious, and nonfunctional.  Unfortunately, I burst my brother's bubble and told him that I had seen a similar product at Radio Shack last year. He doesn't believe me.

For more info, go to Nolo Press, which has some nice info on patents.

Or ask your questions here and I will see what I can do.

 

Deductions!!!

Well, I decided to take a vacation finally, and visit my old bookstore (yes, I do have a little sellers remorse) in East Hampton, New York. And on the way, I decided to stop at a cyber cafe and write about deducting travel expenses.

First of all, here is where you can find all the appropriate forms for deducting business travel. (Do you think I can deduct this trip, even though I already sold the store? :  )

Some potential deductions include:

- Plane, train, cars and other travel expenses from your home's front door to your destination, whether it is to your office or someone elses.

- Gasoline.. even air in your tires

- Bus fares, taxi cab fares, train rides, etc.

- Meals and hotels

- Tips given to the bell hop, the guy at the front desk or the waiter/waitress at a restaurant.

The best advice I can give you is keep track of your expenses!!!! And keep them all in one place. To stick your some of your receipts in your wallet, some in your suitcase and some in your jacket pocket. Those little damn receipts are way too easy to loose.

And my second piece of advice is use a separate credit card from your personal credit card to track your business expenses. That way you get a nice year end summary report of all your expenses.

Well, time for me to get back on the road. I will write more when I reach my destination....

Until then, here's some more tips.

Take the tax break

 

Corporations are afforded a series of tax benefits and advantages by the IRS, such as:

Income Shifting:

The ability to divide income between the corporation and its shareholders in a manner that lowers overall taxes is referred to as Income Shifting. This practice is by far one of the greatest benefits of incorporating a business.

Fringe Benefits:

While startup businesses in this unpredictable economy may be less eager to offer fringe benefits to employees, corporations are afforded favorable treatment over non-corporate entities in the area of fringe deductions.

Business Losses

In a corporation, there are no limits or restrictions on the amount of capital or operating losses that a corporation may carry back or forward to subsequent tax years. Unincorporated entities, however, are subject to more stringent rules regarding corporate losses. For example, an individual owning a sole proprietorship cannot claim a capital loss greater than $3,000 unless he or she has offsetting capital gains.

Dividends From Other Corporations:

Where a corporation is cash-heavy and shareholders do not desire to withdraw the cash assets, the "dividends received" exclusion will serve as a great benefit of incorporating. In a nutshell, a corporation can receive dividends from stock it owns in another unrelated corporation 70% tax free. In other words, where an individual may be required to pay taxes on ALL of a $10,000 corporate stock dividend, a corporation that falls within the "dividends received" exclusion is taxed on only $3000. This gets tricky.so please consult your tax professional before implementing this strategy.

Leasing Assets to your corporation:

Leasing your personally owned property (real estate, automobile, or even a domain name) to a corporation may provide tax savings to many individuals. Please note, however, that the IRS will often scrutinize this type of leasing arrangement. Therefore, the lease terms must be fair to both parties in the transaction (to you and to your corporation). This benefit of incorporating is rather similar to the "Income Shifting" discussed above.

Self-Employment Tax Savings:

In an S-Corporation, however, only earnings actually paid out to an owner as compensation for services are subject to payroll taxes. Any money left in the business for reinvestment or distributed to the shareholder as a dividend is not subject to payroll taxes...and not subject to self-employment tax.

 

 

Know thy customer

Cash might be king

but the customer is what makes or breaks your business. So, what can you do take care of you customers?

- Keep track of them -- names, addresses, birthday's etc.

- Use a simple electronic list to keep track of them, such a good POS system or a simple contact manager database

- Don't forget their birthdays (I just got a great interactive bday card from a local bike shop)

- Keep track of your customers who spend the most

- Keep track of customers who have not contacted you in a while

- Integrate their transactions into your financial accounting system.. which can help basic invoicing, cutting checks and more...

What do you recommend to keep track of customers? I am all ears.

Insurance help for Small Businesses

This morning, I asked my brother, Stephen, who manages all of the Walt Disney Company's insurance to provide some words of wisdom on insurance for small businesses. Here's what he had to say:

Insurance is a product that a small business pays for and hopes it never needs but, if it does experience a financial loss will be happy to have it. Whether it be liability insurance, property insurance or benefits (such as medical or disability), these policies will respond to protect a business financially.

 

Some insurance such as Auto Liability and Workers Compensation (in most cases) are required by statute so to operate without this insurance may be in violation of state law.

 

The web-sites below may be of assistance.

Insure.com has a nice tool to help you select the right insurance for your company.

About.com has a list of resource for small businesses looking for insurance help

 

 

 

Meet Small Business, Tax and QuickBooks Mac Experts

This summer, we have a new member of the team, Shanee Wright, a student from North Carolina Agricultural and Technical State University. She is working on our Small Business Ask The Expert program on our Community Website. Every once in a while, Shanee will be visiting us to let us know what great things are happening with our Ask The Expert Program:

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Find answers to your small business and tax questions, contact an experts below:

• Earle McEwen (Tax expert)
• Mike Block (Tax expert)
• Anita Campbell (internet Small Business Expert)
• Henry Reeves (Accountant and Director of Shenandoah Valley Small Business Development Center.)

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Learn more about QuickBooks for Mac users at one of the links below!

• Expert: Caren Schwartz.
• Experts: Gale Kirsopp & Michele Sacco

    Couldn't find your QuickBooks for Mac questions? Try looking here: more QB for Mac 

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Some helpful sites

Some useful sites.....

1. NOLO.com - good articles for businesses starting out and also some good advice.  Most on staff appear to be lawyers so good place for info to make sure you're covered.  Includes picking/registering business names, obtaining licenses, ownership structures, LLC, selling/buying businesses, etc.
2. www.morebusiness.com - has different templates by industries and other tools for busineses.
3. www.proposalwriter.com/small.html - section for small, minority and women-owned business
4. www.womanowned.com - for women owned businesses.