Smart Money Choice$

The major tax deadline of April 15th is quickly approaching for non-corporation businesses (sole proprietorships, partnerships and LLCs). Here are five quick tax-savings tips you don’t want to forget before the deadline arrives in all its glory.

1. Home Office Deduction

Generally, you can deduct business expenses that apply
to a part of your home if that part is exclusively used on a regular basis…

• -As your principal place of business,
• -As a place to meet with your patients, clients, or customers in the normal course of your trade or business, or
• -In connection with your trade or business if it is a separate structure that is not attached to your home.

This deduction includes both expenses that are directly related to your home office (painting, repairs, etc.), as well as a portion of your indirect costs, which include utilities for your whole house, mortgage interest or rent, real estate taxes, even depreciation on your home.

This can really add up to a substantial deduction.

And if you took the home office deduction last year, but couldn’t use it all (it’s limited by your business profit), you can also carry over any leftover deduction you couldn’t use last year and add it to this year’s deduction. (Check your 2008 Form 8829 and look to see if there is any carryover available for 2009 at the bottom of the form.)

The home office deduction is worth the trouble because it also reduces your self-employment tax amount.

Click here to get the details on how to take the deduction here:
IRS Instructions for Form 8829

2. Write off new equipment (Section 179 deduction)

Rather than depreciate business property over several years, you can choose to expense business assets in the year of purchase. Here are basic guidelines for what qualifies:

• Tangible property, like machines, equipment, furniture
• Off-the-shelf computer software

It does not apply to:

• Real estate
• Property used less than 50% in your business
• Property you inherited or received as a gift

You can “write off” (deduct as an expense) newly purchased assets up to $250,000 for 2009.

This is another smart deduction that helps to reduce both your income tax and your self-employment tax.

Click here to get all the specifics here:
IRS Instructions for Form 4562

3. Use Per Diem Rates for Business meals & incidental expenses while Traveling

As long as you can document your away-from-home business travel, you can deduct a per diem rate (per day) for meals and incidental expenses instead of the need to keep records of and report your actual expenses. This can give you a much bigger deduction if you spend less than the daily rate, not to mention it makes the recordkeeping easier.

Of course, you only get a 50% deduction on meals and entertainment for business purposes, but if you’re frugal, you will still get a much better deduction than you would with claiming actual expenses.

And, yes, this one reduces both income and self-employment taxes.

Click here to get all the specifics here:
IRS Publication 1542

4. Maximize your HSA Contributions

If you have a high-deductible health plan (HDHP) for your health insurance and a Health Savings Account (HSA) for your out-of-pocket medical expenses, you have until April 15th to make your 2009 deductible contributions. That’s up to $3,000 ($4,000 if you are over 55) for a self-only coverage plan, or $5,950 for a family coverage plan.

While this one won’t reduce your Self-employment tax, it is a nice deduction in addition to any self-employed health insurance deduction you can take for what you paid in insurance premiums on that high-deductible haelth plan. This winning combination makes 100% of your medical costs deductible, even if you do not itemize. That’s sweet.

Click here for all the specifics are laid out here:
IRS Publication 969

5. Maximize your IRA Contributions

If you have a traditional IRA, you can still make your 2009 contributions up until April 15, and still claim any deduction you are entitled to (usually for a traditional IRA as opposed to a Roth IRA) now. This is an especially smart choice because when you make contributions to your retirment accounts, you will likely also get the retirement savings contributions credit (depending on your income level, among other things). It’s one of the very few times you can legally get a double-dip for a deduction.

General traditional IRA contribution limits for 2009 are:

$5,000 ($6,000 if you’re over 50 or older) – there are, however, several factors that affect how much of your contribution is deductible.

As a self-employed person though, you may seriously want to consider opening a SEP-IRA, since this type of retirement plan allows you to make larger contributions and thus get bigger deductions on your tax return.

IRAs have lots of twists and turns, but if you already have one set up, or want to set up a quick traditional IRA (you can do this easily) and make a contribution for 2009, it’s just smart to max out your contributions and take the deduction for 2009 by April 15.

Click here to get all the ins and outs of IRAs here:
IRS Publication 590
IRS Publication 560

To keep your tax bill as low as possible, the smartest choice is to do your tax planning BEFORE the end of the year. But at least these tips will help you pay as little as legally possible right now for 2009, and then be all the wiser for 2010.

It’s Gabrielle Fontaine with a heads-up critical update for everyone currently (or formerly) using QuickBooks software.

Intuit, the company that makes QuickBooks, just announced that there is a potential security risk that has been found that would allow hackers to access the data on your computer.

The threat is due to a newly discovered vulnerability in Microsoft’s ActiveX technology, which is commonly used by many popular computer programs.

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QuickBooks Versions Affected By The Threat
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All QuickBooks Simple Start, Pro, Premier and Enterprise Solutions versions, 2009 and older (including trial versions) are vulernable.  The new QuickBooks 2010 versions, however, are not affected.

Intuit updates its currently supported versions from time to time by releasing software patches. Each update or patch is given a “Release” number for easy identification.

Right now, downloading Intuit’s updates is the only immediate way to eliminate the vulnerability in currently supported versions of QuickBooks. In time, Microsoft will likely release a patch with
their regular security updates for ActiveX.

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How To Protect Your Computer Now
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All QuickBooks users of 2007, 2008 and 2009 versions should verify that they have downloaded and installed the most current updates.

You can check if your software is up to date by opening QuickBooks and then using the F2 key.

These are the most current updates that include a patch which eliminates this new threat:

QuickBooks 2009 – R8
QuickBooks 2008 – R10
QuickBooks 2007 – R13

The best way to stay up to date is to enable the automatic update feature AND to install those updates when prompted.

You can also manually download the latest updates directly from the QuickBooks website.

http://support.quickbooks.intuit.com/support/productupdates.aspx

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If You Are Running QuickBooks 2006 or Older….
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If you are running QuickBooks 2006 or older, you are vulnerable to this security threat. Since these versions are no longer supported by Intuit, there is no downloadable update. Your best defense is to upgrade your QuickBooks software to a supported version (2007-2009)
as soon as possible.

You can find both 2009 and the newest 2010 versions on amazon.com

Additionally, if you have an older version of QuickBooks installed on your computer but it is no longer in use, remove it by uninstalling the program to remove the ActiveX threat.

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If You Are Running a Non-US Version of QuickBooks….
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For Canadian versions of QuickBooks, you can download the updates directly from the Intuit website:

http://support.intuit.ca/quickbooks/en-ca/kb/update/update-quickbooks-to-new-product-update/Update_main.html

For UK versions of QuickBooks, you can download the updates directly from the Intuit website:

http://support.intuit.co.uk/quickbooks/en-gb/kb/update/update-quickbooks-to-new-product-update/Update_main.html

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I’ve Made a Video to Show You Exactly What to Do
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As an Advanced Certified QuickBooks ProAdvisor, I want to see you get the most out of your QuickBooks software. That’s why I created my free video training blog, QB QuickTips.

My latest video post walks you through each of the steps outlined above to show you exactly how to protect yourself from this new ActiveX threat.

If you want to stay informed about critical updates for QuickBooks like this one, as well as learn insider tricks and tips on how to use this powerful software for your business success, be sure and
sign up for the QB QuickTips notification list.

You’ll also receive private, subscriber-only bonuses that are not even posted on the blog.

Get your free subcription here:

===> http://www.QBQuickTips.com

If you’ve been feeling the pinch caused by our “new economy,” then you may be a sitting duck for business opportunity scam artists. At least that’s what the Federal Trade Commission (FTC) said in a press release issued this week. They announced an intensified crackdown campaign against a variety of scams tied to the down economy.

The FTC stated that there have been 120 law enforcement actions so far this year against those promoting dubious “opportunities.” The Commission alleged that a handful of widely publicized get-rich-quick schemes have already swindled over $300 million from unsuspecting consumers.

Why now?

In hard economic times, fraudulent businesses boom. The scammers know that when the money gets tight, emotions run high, and irrational decisions are more likely. That’s because distress caused by financial pain makes it easier to believe big promises of recession-proof income made quickly with minimal work.

We want to believe.

Warning Signs

According to the FTC, fraud is most often associated with investing in vending machines, display racks, pay phones, medical billing, work-at-home, and Internet-related business opportunities. Beware of promises to make lots of easy money in a short period of time with little effort or skill.

Another earmark of fraudulent operations is their high pressure tactics, often including telemarketing as part of the sales process. The aim is to make you feel like you will lose out if you don’t fork over your money immediately.

If you’re unsure, don’t let them pressure you with scarcity before you’ve gathered all the information you need to be comfortable with your choice. Listen to your gut. Use what I call strategic procrastination. If it is a truly viable business opportunity, it will still be there AFTER you’ve had all your questions answered. Otherwise, let it go. It probably wasn’t a good fit for you anyway.

You should also pay attention to specific claims about how much money you “can” make. The FTC Franchise Rule says if the seller is making earnings claims, they must provide proof for those claims. This includes the number and percentage of previous buyers who achieved at least the earnings promised.

If the cost of the program is $500 or more, they must back up their earnings claims in a written document. Otherwise, they are violating the law.

Are there testimonials? Be sure these are legitimate. Ask for contact information. The FTC requires business opportunity promoters to give you the names, addresses and phone numbers of at least 10 previous buyers who live the closest to you.

Personally interview these people, doing so in person if at all possible. It’s best if you can see their business operations with your own eyes. This dramatically reduces the chance of being misled by phony references. Don’t skip this step if the program calls for a substantial investment.

Does that mean all business opportunities are scams?

Sadly, these fraudulent business promotions make it harder to recognize legitimate businesses. They’ve mastered the same highly effective marketing tactics used by credible, successful companies.

So if a business, for example, is making a time-sensitive offer, or its program is limited in some way, it doesn’t necessarily mean it’s a scam. There are plenty of legitimate companies who offer valuable information for short time periods or on a limited basis for valid reasons.

But when they are making big promises with a big ticket price, you need to be careful and take the time you need to decide if it is the right decision for you. Whether it is a scam or not will usually become evident with due diligence.

Do your homework

First be clear on your own goals and objectives, and don’t make your decision based solely on emotion. Making smart choices means doing your homework.

Whenever starting any kind of business or going into a new market, you need to do your own investigation into whether there truly is an existing demand for the type of product or service you’ll be selling. That’s always true, regardless of whether you are considering the purchase of a business opportunity or not.

Be especially wary of those who claim you do not need to put much time or effort into the business to get big rewards. You may reasonably be able to achieve those kinds of results in the long run, but starting a business always involves risks and substantial work on your part in the beginning.

If you are required to sign a contract, consider discussing it with your lawyer and accountant first, especially if a sizable amount of money is involved.

It may also be wise to get information about the company from the Attorney General’s office, consumer protection agencies and Better Business Bureau. Just remember that a lack of complaints doesn’t necessarily mean that the business opp is a good one.

What if you’ve already been scammed?

If you’ve already bought into an “opportunity” that didn’t live up to its claims, and you’ve tried to get your money back without success, you may have been scammed.

But all hope is not lost, yet. You can take your case to the authorities.

Where to report fraudulent business opp promotions:

• The state Attorney General’s office in the state where you live and in the state where the business opportunity promoter is based.
• Your county or state consumer protection agency. Check the blue pages of the phone book under county and state government.
• The Better Business Bureau in your area and the area where the promoter is based.
• The FTC. File a complaint online at www.ftc.gov or call toll-free 1-877-FTC-HELP (1-877-382-4357).

It is definitely possible to start or grow your business successfully in any economy. But to make smart choices, especially when scammers are rampant, you need to pay attention to the warning signals and do your homework before opening your wallet too quickly.

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WANT TO USE THIS ARTICLE IN YOUR OWN BLOG OR E-ZINE? You have permission to re-publish it, as long as you include the following author’s bio and link:

Gabrielle Fontaine, PB is a freelance Professional Bookkeeper and Advanced Certified QuickBooks ProAdvisor. She specializes in assisting Internet-savvy entrepreneurs get control of their books and maximize profits. Gabrielle also publishes the business-boosting online ezine, Smart Money Choices. Get more information at http://www.BookkeepingDirect.com

Finally a couple breaks that gives a bit of relief specifically for self-employed folks!

The American Recovery and Reinvestment Act (ARRA) has created a few tax breaks for 2009 that are only available this year, some with just a few months to take action and save taxes. Here are a couple you may want to take note of right now because they can have a quick impact on your cash flow.

Estimated Tax Requirements Modified

There are changes to the estimated tax requirements. This is welcome news since the next deadline is Monday, June 15th.

You can defer your estimated tax payments, paying a larger part of your 2009 estimate at the end of the year. The payment requirements have been modified as well.

Now you only need to pay in the lesser of 90% of your 2008 or your 2009 tax bill through estimated payments. The most significant qualification for this new rule is that more than half of your gross income in 2008 had to be from your small business.

Making Work Pay Credit for the Self-Employed

We’ve heard lots about how employees are getting the benefit of this new credit right now, but what about us?

The new credit is equal to 6.2% of your earned income, up to $800 (depending on your filing status). Of course, there is a phaseout of the credit for taxpayers with higher income (AGI over $75,000-$150,000). But if you qualify, you can take the credit now by deducting it from your estimated tax payments.

For directions on how to make the calculations, use Worksheet 2-9 on page 43 of Publication 505

For additional small business tax breaks that may apply to your business, check out the summary of ARRA small business info available directly on the IRS website.

This is a special time-sensitive invitation…

Click Here =>Free Mini-Site Webinar

I’d like to invite you to join me in attending a one-time-only webinar happening THIS coming Wednesday, June 10th.

If you’ve got a website up for your business…or need to get one, this is an event I’m sure you’ll want to attend along with me!

This new, absolutely free, LIVE *webinar* is being offered by my favorite online trainer, Jim Edwards. This special class is called:

“The Ultimate Mini-Site Formula“.

Regardless of where you are in your business, this live webinar contains proven battle-tested blueprints for making your online presence profitable with quick and easy little “mini-websites” you can easily create yourself in just a single afternoon!

(And if you’re just getting ready to put up your website, this is MUST-HAVE information to make sure your site will actually do the selling for you and make money!)

Get the full story right here:

Click Here =>Free Mini-Site Webinar

Using the latest webinar technology, we’ll discover together….

• What exactly is a “mini-site” and why you NEED to have at least one for your business
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• Breakthrough strategies that will help you to set up an autopilot mini-site that brings you a never-ending flow of new leads and customers.
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• The Exact 4-step process every successful mini-site business MUST follow to profit online
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• How to instantly double your mini-site profits just by changing ONE link
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• One of the BIGGEST TRAPS you can fall into that guarantees failure and why everyone is trying to get you to fall into it (and more importantly, how to AVOID it!)
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• A detailed run-through of Jim’s Million Dollar “Ultimate Online Success Formula” (That’s no hype, either. Jim is literally a multi-millionaire because of this exact mini-site formula!)
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• Jim says he’ll even create a REAL mini-site LIVE on the Webinar in just 4 1/2 minutes! (And he’ll also show you a 30-second trick for turning this site into profits, almost instantly!)…
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• And much, MUCH more!

Plus not only will you be able to hear Jim sharing this NEW information, but you’ll also get to SEE and WATCH it happening in real time on your computer screen, complete with LIVE examples! (And it doesn’t matter what connection speed you have or even if you have a PC or Mac.)

I’m definitely looking forward to being on this webinar myself — that’s why I thought you’d want to know about it too. It’s going to to be a first-class event!

I truly hope you can join me. You won’t regret it — of that I’m 100% sure.

Gabrielle

P.S. – Considering it’s been almost ONE YEAR since Jim’s last free mini-site training webinar, and since there’s zero tuition cost for this one-time-only event, Jim said this will be completely booked up very quickly.

If you’ve ever wanted to use the Internet and a website to build your business, this is one free event you don’t want to miss! I know I’ll be there! Don’t wait and kick yourself later.

Click Here =>Free Mini-Site Webinar