Self-employment offers a wide variety of pros and cons depending on the sector. In the case of tax returns, the pros outweigh the cons. All in all, one still has to pay his or her fair share of governmental tax. The trick is to find ways of minimizing tax debt on a personal basis while still maximizing the benefits. The legislature has created several opportunities that could help the self-employed achieve this.
In order to make the most of such opportunities, start by maintaining good records. Most self-employed individuals run SMEs (Small and Medium Enterprises). As a result, outsourcing professional accounting services is difficult due to the high charges involved. This does not mean such individuals cannot exercise good record keeping. Start by setting up a valid filing system. Once you receive any tax relevant document, immediately file it in place. Do this diligently all year round, and the result will be a well-set record system.
There is a wide variety of tax software available that offer e-filing. Renowned software such as TurboTax and other leading tax tools can go a long way in helping you maintain good records. Depending on your business, make a detailed comparison of TurboTax features before actually choosing a specific version. Pick one that fits your tax needs and offers proper record keeping features. There are several versions available, but most self-employed will want to use TurboTax Home & Business. This allows them to file the necessary Schedule C to report self-employment income.
Along with a proper filing system, always bear in mind the fact that expenses linked to the business are vital. Always keep records of any and all business expenses incurred, no matter how minute they may seem. A good way to manage petty cash is by making diary entries of all daily expenses. Equally imperative is a checking account specifically used to pay out huge costs. I cases where credit cards are used for payments, keep records. This helps you keep track of card payment so as to request for accurate interest deductions.
One aspect of self-employment tax returns that most people never consider is office space. It is always deductible. Tax laws allow for allowances based on office space, be it at a business location or at home. Specifically, the square footage used up, all recent improvements done, as well as, machinery bought for the sole purpose of office operations, are to be considered when filing tax returns.
Other likely factors to be considered include childcare, legitimate hiring of staff and a proper retirement plan. Childcare is always deductible whether or not one operates from the office. In the case of employing family members, go about it legitimately and offer them the relevant benefits such as college funding or healthcare. Lastly, set up a valid retirement plan. Not only will it help you save up for the future, but also lower your tax liability.
One of the most important aspects of making your finances work for you is having a strategy and a plan. You must be able to accomplish this without putting yourself in danger of unnecessary debt. Your plan should include several short and long-term income goals. Your goal will help to give you a set direction when dealing with a monthly budget. The accountants in Watford will help you achieve these goals. In the meantime, the following strategies will help you get started.
Set Realistic Goals
One of the main problems people have is simply dreaming about a good future. Without taking the proper action now, you are leaving yourself open to an uncertain future. Your future goals are what must be used to drive forth your monthly budget in the here and now. One of the most important aspects you can start doing today is creating a hidden emergency fund. This money will be available in the event of an emergency. By having an emergency cash funds available it takes away the need to use high-interest loans and credit cards.
Keep Your Goals Centered
While it may sound like common sense it is important to leave reminders of your financial goals in life. This helps to avoid careless spending on items that are not a necessity. Simple reminders like sticky notes, daily text alerts, even a change jar on the countertop will help you realize the need to save money for the future. You will begin to think of your personal finances first and what you need to accomplish by setting these reminders.
Make Your Finacial Goals Personal
Think about what your family needs? Think about what you will need in the future? Talk to the accountants in Watford about what financial goals they believe are important. However, your goals need to relate directly to you and your family. While future goals are important it is also necessary to budget for daily needs as well. Your accountant will be able to help you prioritize your future financial goals as well as your daily living expenses. For example, while saving up for a new car is an excellent goal. If you do not have the need for a new car in the near future, your money would be better spent getting saved up in an emergency cash fund. An accountant will be able to help you determine how much of your cash can be used for savings and the best type of accounts for it.
It is important to discuss how your plans are working with your accountant throughout the year. You simply cannot set a plan in motion and not check in on it occasionally. Your accountant will hep you measure your success and continually monitor the situation for the best results. It is best to keep a personal timeline to ensure you are on track with your financial goals. Once you have completed a financial goal, do not stop. Talk with your accountant about setting up a more ambitious goal. There are many reasons why it is important to save money, so there is a large pool of goals available. Remember though it is important to keep any long-term debt out of your equation.
If you are looking for a way to make your first million dollars, it is time to start setting those goals today. However, on your way to a million, it is necessary to set up those small goals as well. One of the biggest ways people lose money is by having to pay those monthly credit card bills Start by sealing the majority of your cards away and stop with any type of frivolous shopping. Once this has been done you can begin setting up realistic goals and a proper monthly budget. As you see your goals being made, it will help you to carry on and stay on track. While it may be hard to maintain a daily budget, over time it will become ingrained in your daily life. You will see how your hard work pays off in the many financial rewards. Your first step is to set up several short and long-term goals today. Once you have those figured out, talk to a Watford accountant about realizing them.
What can you do to get out of the money rut once and for all? The truth is that the way money is designed, you will never have enough of it. You see, the characteristic of money is scarcity. If it is scarce, then it is valuable. Though it is hard to get out of the money rut, with the little that you are making, you can have a great time. How?
You cannot live without spending money. However, if you do not have strict discipline, you will always be short of money. Here are a few things that you can do:
- Learn to keep a record of what you want to spend your money on. This will help you escape issues such as impulse buying. You also have to monitor and know how much income you've got in a month. Have it clearly noted down. Take note of all expenses, big or small. This step is simply emphasizing the fact that you cannot spend what you do not have.
- List down your expenditures however big or small they could be. The list includes all the outright bills such as electricity, insurance premiums and mechanical costs of your car. Those expenses you occasionally incur such as watching a movie at the theatre or that cup of coffee you have with colleagues after work should also feature in your list. Having a thoroughly done expense list will enable you identify where that money you never have an account of goes.
- Once you know the amount of money coming in and going out, you are ready to work out a budget that is affordable to you. Carefully examine your expenses list to figure out which item should be reduced or eliminated. If you are keen enough you will notice something that is not worth being an expense to you.
- Utility bills are a part of your expense list. Have a look at your home appliances. You can seal your windows and doors to cut heating and cooling costs. Ask for the installation of the latest water heating technology for your home. Do not use the dishwasher or the washing machine for a few items.
- Discard your old appliances and go for modern appliances that have the Energy Star label and you will never regret it at all. Think the cost is too high? How about you look at it in terms of it as an investment that will save you money for the coming ten years.
- Consider replacing your old roof with a new one. Improve your insulation to reduce utility costs. Such investments could be costly but will save much money in future.
It takes courage to invest in new technologies such as heating systems because they tend to be more expensive than old ones. However, it is worth it when you realize how much you can save in the end and get on top of your private financial planning.
When searching for truck accident lawyers its best if you take some basic information and join it with common sense to see whether your attorney is able to manage your lawsuit to get you what you deserve. Here are three things that you need to look for when considering an attorney to manage a trucking accident case for you.
Where Do Truck Accident Attorneys Spend Their Money and Where Does the Money Go?
Some law firms spend thousands upon thousands of dollars on advertisements attempting to get the greatest number of people to their law firm. Now there is not anything particularly wrong with this until you discover that more cash is spent by the law firm on this promotion than they do locating all useful info for their client's cases and getting the correct research.
Another issue is that some law firms will try to take on too many cases and will thus spend less time on every case that comes in. You want to ensure that you simply go so that you can be represented by them to their full potential with a law firm that does not take on an intense case load.
Truck Accident Attorneys Must Have Trucking Industry Knowledge
Make no error truck accident lawyers need to have an intimate understanding of the trucking industry will likely have the ability to prosecute your case a lot more effectively than an attorney who has little to no experience with it. Why?
The trucking industry is extremely specialized. The laws change annually and there are certain standards and practices that truckers and trucking companies must abide by. The biggest of which is rest time for the drivers (which is mandated by state and national laws). So in order to tell whether or not a trucker or trucking company has broken those laws but make it seem as though they haven't takes a lawyer who has an eye for details and is capable to do the math, which can only be comprehended by those who really take the time to comprehend the business.
Truck Accident Lawyers Have To Know the Difference in Laws
Another large part of your case is seeing whether or not and/or the motorist the trucking company should be blamed additionally need to do with national and state laws. You see while intrastate drivers will be more impacted by state laws, interstate motorists are definitely going to be changed by state and national laws. This can have an important consequence on your case and your attorney needs to understand the difference between the two.
Great truck injury lawyers must have an understanding of these three things to be able to present you in the strongest way possible and get what's rightfully yours. Get into contact with the truck accident attorneys at: isaacstruckattorneys.com to help out with your case.
Over the past couple of years the cost of getting a homeowners insurance has increased drastically. While you could easily obtain one for about $300 or $400 per year in the past, you need to spend at least $600 to obtain the same kind of insurance now.
That is the reason why it is more important now, than ever before, to make use of the following tips to lower the cost of your homeowners insurance:
Tip #1: Compare Costs If you want to obtain the most affordable home insurance quotes you can get, comparing offers provided by different insurance companies is crucial. Years ago, the only reliable way to get that done was by visiting your local insurance agencies, or by calling them. But, these days, insurance quote comparison sites let you do the job quickly and easily.
To start receiving insurance quotes from top insurers, all you need to do is visit a good comparison website and then fill up and submit a simple questionnaire that requires a few details from you regarding your house and insurance requirements. Certain websites even let you enter deductible amount and qualified discounts before presenting quotes.
By comparing deals from different insurance providers and switching your company to a cheaper one, you can save as much as $500 per month on premium!
Tip #2: Raise Deductible Raising your deductible amount is one of the easiest and smartest ways to lower your premium. By increasing your deductible to $500 from the standard $100, you can save as high as 15 percent on premium. By raising the same to $1000, $2500, or $5000, you can save nearly 24 percent, 30 percent or 37 percent, respectively.
Tip #3: Be Loyal Purchasing all your insurance policies from only one company ensures you more than just the convenience of having to deal with a single agent and company. When you prove your loyalty to your insurer, you can usually avail between 5 and 15 percent discount.
Tip #4: Tighten Safety Most homeowners insurance providers easily give you a premium discount of 5 percent to 20 percent if you install safety features in your house. Security systems, fire extinguishers, window locks, fire alarm systems, security lightings, security doors, smoke detectors are all well and good.
Tip #5: Avail Discounts Make sure that you know what discounts you qualify for before purchasing your policy. In case you are 55 or older, you may be eligible for obtaining a senior discount of 4 percent to 10 percent. If you do not smoke, some insurers can give you a discount of as high as 10 percent. There are many other kinds of discounts insurers provide, too. For instance, if you work as a fire fighter or security personnel, you may be eligible for additional discount.
Note that, in addition to the above tips, there are many others you can rely on to successfully lower the cost of your homeowners insurance policy. However, in most cases, the above tips should be enough to greatly help you.
When someone has an interest in building a house or fixing up a new one, obtaining the finances to have the project done properly becomes a major concern. If a new home construction project is going to be done or if major renovations are in the works, a construction loan can be a great way to get the money needed to do the work done quickly and properly. There are several tasks that need to be completed before the loan is awarded.
Before someone applies for a loan, they should have blueprints made out showing exactly what the new home is proposed to look like or what the remodeling project will entail. This information can be obtained from the builder the applicant intends on using to do the work. Before they can be awarded a loan, the blueprints will be assessed along with any monetary estimates given to the applicant by the builder.
If the project is not comparable with the amount of the home improvement loans the company has available to borrow, it may not be approved. The amount of the loan should cover the repair, but it should not be substantially more than the amount of the work being done. The home should be used as a primary dwelling or summer home and not for a quick turnaround in the real estate market, or the loan may be denied.
Financial stability is a must when applying for a construction loan. The applicant will need to have a good credit score to obtain the funds needed. In most cases, loan companies will look at the top three credit score corporations, Experian, Trans Union, and Equifax. From these credit scores the middle score will be used to determine if a loan will be awarded.
If there is a co-applicant, the process is done for each person. The lower of the middle scores will be used to make a decision. The score will need to be 680 or above for remodeling loans covering $1,000,000 or less. For projects costing more than $1,000,000 to remodel or build, a score of 700 or 720 will need to be met to get a loan.
Many loan services require the applicant has had steady employment at the same company for at least two years. Any debt the applicant owes will also be taken into consideration. Monthly debt amounts should not be in excess of 45% of the amount of pay made each month.
While applying for construction loans can be nerve-wracking, most people find if they have a solid income and low debt, they will be approved. As long as the home will be used for their residence, and the credit score of the applicant is in the right range, they will soon be able to build or remodel their dream home.
There are two specific cases when you could benefit from credit card insurance cover:
1. Credit Card Theft
In the event that your credit card is stolen and used to purchase goods, you can call your credit provider and inform them of the loss of the card as well as the transactions that were not made by you. It is important to report the theft or loss of your credit card as soon as possible. You may also need to report the theft to your local police station and provide your credit card company with a case number.
The credit card will immediately be cancelled and any transactions performed after the loss or theft will be removed from your transaction history. This means that you will not be liable to repay these amounts. This type of insurance is normally a fixed part of your credit card agreement. However, you may need to select this option when applying for the credit card or take out additional insurance to ensure that you are covered.
This insurance can also provide you with cover in the event of identity theft. However, you will need to provide proof that you are a victim of identity theft.
2. A Payment Protection Insurance Plan
In the event that you lose your income, your credit card insurance cover will make payments on your behalf for a specified period of time or until you are able to afford the repayments. Loss of income could be due to an injury, loss of employment or death.
It is important to read the terms and conditions of this type of insurance policy carefully. Some insurance policies will not provide you with this type of cover if you were fired or if you resigned from your job. In addition, they may not provide cover for some types of employment. For example, free lance workers, consultants and commission earners who do not receive a regular salary or wage may not be eligible for cover. Check out PPIGuru.co.uk for more information about how to claim back your mis-sold payment protection onsurance.
The financial institution or credit card provider in-house should offer loss of income credit card insurance. Alternatively, you can find an external insurance provider that offers all types of credit card insurance.
If you opt for an in-house insurance policy, the premium will be deducted from your credit card on a monthly basis. You will need to make monthly payment arrangements if you are using and external insurance provider.
Clearing the startup financing hurdle is made even more difficult by the fact that brand-new entrepreneurs are often turned down for business loans. Traditional bank loans have always been tough to secure, and although loans funded by the Small Business Administration are typically more accessible, it's getting more competitive: The SBA's biggest lending program, the 7(a) program, recently maxed out its funds, and was on hold until July 28 after Congress raised the lending limit, ABC News reported. While business owners are in the clear for now, the growing number of SBA loan applicants means there's a good chance of the program reaching its limits again.
So what's a would-be small business owner to do? There are plenty of other options to help you fund your new venture. Here are 14 options beyond bank loans for financing your startup.
Online lending. Recently, online lending services such as OnDeck and Kabbage have become a popular alternative to traditional business loans. Online lenders have the advantage of speed: An application takes only up to an hour to complete, and a decision and the accompanying fundscan be issued within days. In contrast, the traditional loan process can take weeks, or even months, to complete.Because of this, former U.S. Treasury Secretary Larry Summers said at the 2015 Lend It conference that he expects online lenders to eventually reach more than 70 percent of small businesses.
Factoring/invoice advances. Don't want to take out a loan? Services like factoring and invoice advancing may help ease growing pains for small businesses. Through this process, a service provider will front you the money on invoices that have been billed out, which you then pay back once the customer has settled its bill. Eyal Shinar, CEO of small business cash flow management company Fundbox, says these advances allow companies to close the pay gap between billed work and payments to suppliers and contractees.
"By closing the pay gap, companies can accept new projects more quickly," Shinar told Business News Daily. "Our goal is to help business owners grow their businesses and hire new workers by ensuring steady cash flow."
Product presales. Selling your products before they launch is an often-overlooked and highly effective way to raise the money needed for financing your business. Entrepreneur Priska Diaz was able to raise $50,000 for her company Bittylab with a presale of her Bare air-free baby bottles. The money Diaz was able to raise helped her pay for inventory, and also helped to open some doors in retail and learn about her website's visitors. Though Diaz was able to benefit greatly from this means of financing, there were still some difficulties to overcome.
"The biggest challenge was in coordinating the inventory delivery times from our supplier so that we could start fulfilling orders," Diaz said. "Another challenge was forecasting the number of units we were going to presell, resulting in a shortage. We've now passed the presale stage and sold more than originally anticipated, resulting in back orders."
Friends and family. If you have a friend or relative with some spare cash, you have another potential way to finance your business. Borrowing from friends and family presents an interesting alternative to traditional forms of financing, and can have some unique advantages, including low- or no-interest payments and avoiding the hassles of bank contracts.
Debra Doran, managing partner of the Seattle branch of financial consulting firm CTC Consulting | Harris myCFO, recommended open, frequent communication with potential friend and family lenders to avoid damaging relationships.
"Having a well-thought-out game plan will increase the odds of family members and friends agreeing to be your financial partners," Doran said. "Business success is not assured, but by professionally approaching your family and friends to support your efforts, and communicating frequently on the progress of the business, the chances of maintaining good relationships are significantly higher."
Side business. New business owners can try "double-dipping" as a means of funding their startup. Entrepreneur Alex Genadinik used his revenue from tours he organized on ComeHike.com to launch Problemio.com, which builds mobile apps for planning and starting a business. After receiving donations for some of the free hikes he led, Genadinik began to charge for events, where he marketed his new site to hikers.
"I tried everything else before that, including monetizing with ads and becoming an affiliate reseller for outdoor gear, but it didn't quite work," Genadinik said. "This allowed me to work on my project without the distraction of looking for investors."
Home equity loan. For homeowners who have equity —the home's value minus what you owe —a home equity loan is a great option for financing a small business. These loans generally offer interest rates that are both flexible and lower than traditional commercial rates.
"Home equity loans are very cheap, rate-wise," said Al Engel, executive vice president of consumer lending at Valley National Bank. "It is a low-cost form of borrowing that is very controllable by the entrepreneur as far as when he pays funds and redraws funds. The flexibility is tremendous. The risk is, you are putting your home on the line. If the business fails, or you fail to maintain the terms and conditions of the home equity loan or line, you risk foreclosure."
Selling assets. Sometimes, you may have a financing method and not even realize it at first. That was the case for entrepreneur Hamid Saify, who was able to fund his opinion-sharing community, ChoicePunch, by selling a car he had wanted to pass along to his children. Though it was a tough decision, Saify was able to make $30,000 from the sale of the car. That money, in turn, went toward some very important aspects of the fledgling startup.
"I used some of that money to help with the last payments to our design and development contractors," Saify said. "The rest I put into our account and used to help support marketing during our beta launch months."
Credit cards. Business credit cards are among the most readily available ways to finance a startup, and can be a quick way to get your business up and running.
"One of the few advantages is that the minimum payment on a credit card is very low," said Ken Nickel, senior vice president of community lending at Valley National Bank. "If you are a new business who is just starting out and you don't have a lot of money coming in, or you don't have a ton of expenses, you can put it on a credit card and pay the minimum payment."
However, there are some serious drawbacks to consider before using plastic to fund your startup, Nickel said. If a new business gets started and then has trouble making the payments, the interest rates and costs on the cards can build very quickly, and carrying that debt can be detrimental to a business owner's credit.
Angel investors. Those looking to finance their business can always look to an angel —an angel investor, that is. Angel investors have helped to start up many prominent companies, including Google, Yahoo and Costco. This alternative form of investing generally occurs in a company's early stages of growth, with investors expecting a 20 to 25 percent return on their investment.
"The principal advantage of an angel investor is generally that you have a friendlier atmosphere and a quicker decision-making circumstance for a smaller amount of [money]," said Mark DiSalvo, CEO of private equity fund provider Semaphore. "You are likely to get an investor who has strategic experience, so they can provide tactical benefit to the company they are investing in."
Venture capitalists. For small businesses that are beyond the startup phase and already have revenues coming in, a venture capital investment may be appropriate. Fast-growth companies with an exit strategy already in place can gain up to tens of millions of dollars that can be used to invest, network and grow their company quickly.
Brian Haughey, assistant professor of finance and director of the investment center at Marist College, said that because venture capitalists focus on specific industries, they can generally offer advice to the entrepreneur on whether the product is going to fly or what they need to do to bring it to market. However, venture capitalists have a short leash when it comes to company loyalty and often look to recover their investment within a three- to five-year time window.
"They have to make a return and usually have a five-year time horizon," Haughey said. "If you have a product that is taking longer than that to get to market, then venture-capital investors may not be very interested in you."
Winning a contest. Sometimes, businesses can benefit from a bit of luck. That was the case for Roberto Torres and Luis Montanez, who funded a portion of their startup costs for apparel company Black & Denim with winnings from a business-plan competition.
"We utilized the funds to purchase manufacturing equipment that allowed us to scale our products and meet demand," the owners said. "This advantage gave us the opportunity to increase our production and get into bigger players like Stein Mart and Walt Disney World. The competition also gave us access to business experts that asked us the tough questions while allowing us to retain our equity —a perk that would have been very difficult to obtain otherwise."
Renting out your home. Cutting out liabilities is another creative way for new business owners to fund their startups. For Fay Johnson, founder and editor of deliberateLIFE magazine, that meant renting out her apartment. Johnson was able to do this by placing her San Francisco apartment on Airbnb and renting it out for anywhere between five nights and a month at a time. The decision has been successful for Johnson, who has used the money raised to fund the costs of the first few issues of her magazine. Though the move has allowed Johnson to finance her startup, it has not come without its share of headaches, including tight time restraints.
"As an entrepreneur, time is one of your most valuable resources," Johnson said. "When renting, I have to keep in mind that I need to clean and reclean the apartment, and since I work from home, I also have to find a place to work during those days."
Crowdfunding. Crowdfunding on websites like Kickstarter and Indiegogo can give a big boost to the financing aspirations of small businesses. These sites allow businesses to pool small investments from a number of investors instead of forcing companies to look for a single investment. Many sites allow companies to raise money in exchange for rewards or products. Others have an equity-based model in which businesses give up a bit of their share.
Before choosing a crowdfunding platform, be sure to read all the fine print and know what you're getting into. Certain sites require businesses to raise their full stated goal in order to keep any money raised on the platform. Other sites will allow companies to keep any money they raise. Additionally, sites can claim a percentage of any money raised on the site. Sites often also charge a payment-processing fee for money raised.
Grants. If your business focuses on a scientific or research-oriented field, grants from the government may be able to help fund your company. The SBA offers grants through the Small Business Innovation Research (SBIR) and the Small Business Technology Transfer (STTR) programs. Grant recipients are required to meet federal research and development goals, and to have a high potential for commercialization.
Shinar said there are not many downsides to a truly no-strings-attached grant. However, you should carefully read the fine print because grants may require that you give up part of the IT or other intellectual property, Shinar noted. Grants also can be time-consuming, and depending on the sector, the ratio of time expenditure to the odds of payout may be too high. Nonetheless, if your company could be eligible, it is wise to review the options.
Precautions and next steps
While the plethora of lending options may make it easier than ever to get started, responsible business owners should ask themselves how much financial assistance they really need. Companies that receive more income than they truly need should be prudent in how it is used. Shinar urged such companies to make — and stick to — a disciplined budget.
"It's hard to go back later and try to exert fiscal discipline," Shinar said. "It's better to start from the beginning with good corporate governance."
Companies that have received a large cash infusion may benefit from bringing in an experienced partner or board member to help ensure accountability, Shinar added.
As an alternative, bootstrapping your company — building it with existing resources and earned revenue — offers companies a low-risk way to test out their product. If you and your partners are able to work toward creating a functional product in your spare time, you may be able to begin to sell that product with minimal or no cash.
"The advantage of bootstrapping is that you stay the boss," Shinar said. "More importantly, you get relatively quick validation from the market about whether you have a good business plan. Bootstrapping helps imbue a company with operational discipline."
Owners who bootstrap retain exclusive control over their company for a longer time, allowing them to better influence its culture and goals. As your company grows, funds can be put directly back into enhancing the business, rather than into servicing your loans. In addition, they avoid less-than-favorable conditions and terms that might be imposed by lenders or additional partners.
If you bootstrap, however, be prepared and open-minded about moving to the next step. If you remain without external funding for too long, you may be unable to take advantage of market opportunities. Moreover, you risk creating a business that has failed to integrate more experienced minds.
"At a certain point, you need smart partners around the table, and those partners are commonly investors," Shinar said. "If you want to grow really fast, you probably need outside sources of capital. And if you are only bootstrapping, you are missing some of the advantages of corporate governance. You may also miss some lifestyle advantage — you can go on bootstrapping for years without making money. So taking on debt may actually mean that your company can move forward."
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