10 Tips for Turning around Flagging Sales and Boosting your Small Business Revenues

Posted on 14/10/202030/01/2021Categories Business TrendsTags , , , , , , , , , , , ,   Leave a comment on 10 Tips for Turning around Flagging Sales and Boosting your Small Business Revenues

10 Tips for Turning around Flagging Sales and Boosting your Small Business Revenues

If your sales are struggling and revenues are falling, it’s essential to conduct a full review of your small business to understand where things have gone wrong and where the opportunity lies for turning things around.

This is, of course, easier said than done when you are living and breathing this stuff each day, but here are some tips that can help you stand back from your day-to-day business and build a plan for a successful turn-around.

1. As the Owner and Manager, It all Starts With You

Be honest, are you running your business as it should be run – holistically, with an eye on strategy and a finger on oversight, but without being buried in the day-to-day minutiae?

This is a toughie, especially if you are new to business or have experienced sudden growth. Running a business is not like having a job, unless you provide a very niche service to a small group of clientele, it’s rare that you can do everything yourself.

If this is you – try to step back and understand where you need help, whether it’s with accounting, marketing, building a better business Web site, or empowering your team, do it, it’s worth the investment. If you can’t afford help in these areas, consider outsourcing certain functions.

2. Embrace, rather than Retreat from Market Forces

Understanding and keeping a finger on the pulse of your industry is fundamental. Ask yourself – has the industry changed, do you still have a full grasp of the market and goals in place to go after that market? What is the competition doing? If they are doing well, take a hard look at what it is that you think your business is doing wrong, in the light of what your competition across town is doing right. Next find a way to re-connect with your target market using those lessons learned – whether it’s diversifying your products or correcting your price points. Embrace, rather than retreat from market forces.

3. Give Your Customers What they Want

One of the hardest parts of running your own business, is giving customers what they want, not what you think they want.

It sounds obvious, but to go back to the basics. Frequently the reason so many restaurants fail is that the restaurateur lacks a clear vision for his market, is not really in tune with his customer needs, and ends up trying too hard to keep everyone happy by offering hundreds of dishes but invariably fails because the restaurant can’t prepare a single dish well.

4. Manage your Inventory

Retail stores and restaurants have to manage inventory. If it doesn’t shift it quickly becomes money ill-spent and dated.  Your accountant can offer guidance on finding new and better ways to handle your inventory, including re-stocking, and its impact on cash flow and profitability, reporting inventory for tax purposes, warehousing, and how and when to take inventory.

5. Review your Pricing Policy

Review your cost base (constantly). Do you need to adjust pricing – how will this impact your customer relationships?  In reality, a low pricing strategy may increase customer interest but result in lost revenue, while a high pricing strategy may alienate customers.

6. What’s Your Image?

Perceptions are created based on several things – your product, price, your service, ease of doing business with you, your location, merchandising, and of course your marketing (signage, ads, Web site, etc.).

If you have doubts about your image, or want to shake things up a little.

7. Revisit Your Business Plan and Plan Ahead

What were your original goals and how did you plan on getting there? Have market forces changed? Is there a new competitor in town? How is your budget?  If it’s going to take a new approach to get where you need to be, make sure you revisit your plan, benchmark your goals, and outline the elements that will help you get there (staffing, new markets, etc.).

8. Manage Cash Flow and Keep Good Records

Do you know where your money is going?  Are you budgeting wisely so that you know the interval of your monthly income and outgoings? Cash flow is the lifeblood of your business. If you need to get a grip on your cash flow to help you ride the highs and lows of business call us 786-250-4450

9. Help Your Staff Help You Succeed

There are many ways of building successful teams that deliver exceptional customer service and ultimately help add to the value of your brand and improve sales – from employee incentive programs and empowerment activities, mentoring team members, hiring motivated employees, and more.

10. Get Help

Getting outside help, your accountants can help you objectively assess the state of your business and build an approach for turning it around.

Gustavo A Viera CPA

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7 Tax-Saving Year-End Tax-Planning Tips

Posted on 14/10/202014/10/2020Categories TaxTags , , , , , , , , , ,   Leave a comment on 7 Tax-Saving Year-End Tax-Planning Tips

Despite confusion created by recent and probable year-end tax legislation changes, the 2010 federal income tax environment is still quite favorable.

“We may not be able to say that after 2010; therefore, tax planning actions taken between now and year-end may be more important than ever,” said Gustavo A Viera CPA, managing partner for the Tax & Accounting firm, in a statement. “Be careful, though—Congress could change the ball game before the end of the year.”

Following are seven planning ideas for your clients to consider while there is still time to act before the end of the year.

1. Accelerate Itemized Deductions into this Year. If your Adjusted Gross Income will be more than $170,000 ($85,000 if you are married and file separately) next year, you may want to accelerate into 2010 your state and local tax payments that are due early next year. You may also want to prepay in 2010 some charitable donations that you would normally make in 2011. Why? Because for 2010, the phase-out rule that previously reduced write-offs for the most popular itemized deduction items (including home mortgage interest, state and local taxes, and charitable donations) is gone, but is scheduled to come back in 2011, unless Congress takes action to prevent it, which looks increasingly unlikely.

If the phase-out rule comes back as expected, it will wipe out $3 of affected itemized deductions for every $100 of AGI above the applicable threshold. For 2011, the AGI threshold will probably be around $170,000, or about $85,000 for married individuals who file separate returns. Individuals with very high AGI may have up to 80% of their affected deductions wiped out.

2. Think Twice Before Deferring Income into 2011. This strategy makes sense if you are confident you will be in the same or lower tax bracket next year, but the tax picture for 2011 is blurry. With just weeks left in 2010, the fate of many tax provisions for 2011 and beyond is still unknown. The top two rates have widely been expected to increase in 2011 from the current 33 percent and 35 percent to 36 percent and 39.6 percent, respectively—at least for taxpayers earning $250,000 or more ($200,000 or more if single). Therefore, if you fall into this group, you might want to consider reversing the traditional strategy and accelerating income into 2010 to take advantage of this year’s presumably lower rates. However, legislators could still vote to delay any tax increase to after 2011.

3. Time Your Investment Gains and Losses and Consider Being Bold. As you evaluate investments held in your taxable brokerage firm accounts, consider the impact of selling appreciated securities this year instead of next year. The maximum federal income tax rate on long-term capital gains from 2010 sales is 15 percent. However, that low rate only applies to gains from securities that have been held for at least a year and a day. In 2011, the maximum rate on long-term capital gains is scheduled to increase to 20 percent. That will happen automatically unless Congress takes action, which currently seems unlikely.

To the extent you have capital losses from earlier this year or a capital loss carryover from pre-2010 years (most likely from the 2008 stock market meltdown), selling appreciated securities this year will be tax-free because the losses will shelter your gains. Using capital losses to shelter short-term capital gains is especially helpful because short-term gains will be taxed at your regular rate (which could be as high as 35 percent) if they are left unsheltered.

What if you have some poor performing securities (currently worth less than you paid for them) that you would like to dump? Biting the bullet and selling them this year would trigger capital losses that you can use to shelter capital gains, including high-taxed short-term gains, from other sales this year. If you think your investments that are currently underwater are poised for a comeback, you can buy them back after taking a loss as long as you do not reacquire them within 30 days before or after the sale.

If selling many poor performing securities would cause your capital losses for this year to exceed your capital gains, no problem. You will have a net capital loss for 2010. You can then use that net capital loss to shelter up to $3,000 of this year’s high-taxed ordinary income from salaries, bonuses, self-employment, etc. ($1,500 if you are married and file separately). Any excess net capital loss gets carried forward to next year.

Selling enough poor performing securities to create a big net capital loss that exceeds what you can use this year might turn out to be a good idea. You can carry forward the excess net capital loss to 2011 and beyond and use it to shelter both short-term gains and long-term gains recognized in those years, plus up to $3,000 of ordinary income each year—all of which may well be taxed at higher rates after 2010. This can also give you extra investing flexibility in future years because you will not necessarily have to hold appreciated securities for more than a year to get better tax results.

4. Maximize Contributions to 401(k) Plans. If you have a 401(k) plan at work, you can tell your company how much you want to set aside on a tax-free basis for next year. Contribute as much as you reasonably can, especially if your employer makes matching contributions. You turn down “free money” when you fail to participate to the maximum match.

5. Take Advantage of Flexible Spending Accounts. If your company has heath or child care FSAs, before year-end you must specify how much of your 2011 salary to convert into tax-free plan contributions. You can then take tax-free withdrawals next year to reimburse yourself for out-of-pocket medical and dental expenses and qualifying child care costs (depending on the type of plan). Watch out, though, FSAs are “use-it-or-lose-it” accounts—you do not want to set aside more than what you will likely have in qualifying expenses for the year. And, starting in 2011, over-the-counter drugs (e.g., aspirin and antacids) will no longer qualify for reimbursement by health FSAs, so you may need to consider that when determining your 2011 contribution amount.

If you currently have an FSA, make sure you drain it by incurring eligible expenses before the deadline for this year. Otherwise, you will lose the remaining balance. For health FSAs, it is not difficult to drum up some items such as: new glasses or contacts, dental work you may have been putting off, or prescriptions that can be filled early. Also, for 2010, over-the-counter drugs still apply.

6. Adjust Your Federal Income Tax Withholding. If it looks like you are going to owe income taxes for 2010, consider bumping up the federal income taxes withheld from your paychecks now through the end of the year. When you file your return, you will still have to pay any taxes due less the amount paid in. However, as long as your total tax payments (estimated payments plus withholdings) equal at least 90 percent of your 2010 liability or if smaller, 100 percent of your 2009 liability (110 percent if your 2009 adjusted gross income exceeded $150,000; $75,000 for married individuals who filed separate returns), penalties will be minimized, if not eliminated.

7. Make Energy Efficiency Improvements to Your Home. A great way to cut energy costs and save up to $1,500 in federal income taxes this year is to make energy efficiency improvements to your principal residence. Basically, if you install energy efficient insulation, windows, doors, roofs, heat pumps, furnaces, central A/C units, hot water heaters or boilers, or advanced main air circulating fans to your home during 2010, you may be entitled to a tax credit of 30 percent of the purchase price. However, the maximum total credit you can claim for 2009 and 2010 combined is limited to $1,500. Without Congressional action, the credit will not be available after 2010.
Taxpayers should consult with a personal tax advisor before applying these or other tax strategies.

Gustavo A Viera CPA

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5 Things to Talk to Your Accountant About

Posted on 14/10/202030/01/2021Categories Business TrendsTags , , , , , , , , , , , , , , ,   Leave a comment on 5 Things to Talk to Your Accountant About

5 Things to Talk to Your Accountant About

It’s probably a good idea for most small business owners to focus on the core of their business, such as selling fishing lures or designing websites, and use experts to help them in financial matters. According to the IRS, more than 90% of small businesses use accountants to prepare their returns, something you may be acutely aware of during tax season. But tax return preparation isn’t the only reason to use an accountant.

Here are five areas to discuss with your accountant:

Cash flow

Cash flow, which is the cycle of money in and out of your business, is the lifeblood of any company. If you fail to monitor cash flow carefully, you may run short and, in the worst case, be forced out of business. You can learn what cash flow is and how to manage it from your CPA.  Unfortunately, many small business owners don’t understand the importance of cash flow or how to monitor it.

There are some online options, such as MyBizHomepage.com (it’s free), that help you track your cash flow easily. However, it’s a good idea to work closely with your accountant to find sound ways to improve cash flow and address problems that you detect. Your accountant can:

  • Review your budget and suggest items that can be trimmed and other ways to reduce overhead; the less you spend, the better it is for cash flow.
  • Help you with collection policies so you’ll get your money from sales faster and easier.
  • Review your pricing policies; you may be undercharging and missing an opportunity to boost your cash flow, and consequently, your profits.

Theft protection

According to the Annual Report to the Nation by the Association of Certified Fraud Examiners, the median loss by fraud in small businesses (fewer than 100 employees) is $200,000. The most-named reason for these losses is fraudulent billing schemes. The best way to detect this and other problems early or avoid them entirely is to have adequate internal controls in place, and the best way to do this is to work with an accountant.

As a privately-held business, you don’t need to have annual audited financial statements prepared by an accountant. You do need to have a professional review your numbers regularly as well as suggest ways to safeguard your financial information and your money as theft protection measures. Safeguards can include simple steps such as better password protection or controls over access to the company’s financial data; you may also want to use more sophisticated monitoring.


  • You may want or need to raise additional funds to grow your business or undertake a specific purchase or project. An accountant can:
  • Discuss whether you’ll want to seek equity financing (where you bring in a new investor) or debt financing (where you borrow from a bank, a vendor, or other source).
  • Refer you to possible lenders and investors. Accountants often have a network of people that they can approach and who may be in a position to help you find capital.
  • Help you in the loan application process. If you decide to look for a commercial loan such as one backed by the SBA, you’ll usually need a business plan with a number of financial statements, such as a balance sheet and a profit and loss statement. Even if you don’t need a business plan, financial statements are required. An accountant can help you review the numbers and prepare any necessary statements.


Taxes are a complex and costly concern for most businesses. Some self-employed owners like to handle tax return preparation themselves using tax software, such as TurboTax and TaxCut. However, most business owners prefer to let experts do this for them; when there are multiple owners, complex transactions, and multiple states involved, things can be very confusing. Using an accountant for this purpose can ensure that you:

  • Take advantage of new law opportunities. These come fast and furious and can easily be missed without an expert pointing them out and suggesting action you’ll need to take in order to enjoy new law benefits.
  • Maximize write-offs. There are many tax elections available and it may require expert advice to make the right choices for your situation.
  • Issue required statements, such as W-2s to employees and 1099s to independent contractors. Failure to issue these information returns in a timely manner can trigger unnecessary penalties.
  • Avoid missteps that can “red flag” returns for audit. Failing to make certain disclosures or include certain information can cause a return to get special attention from the IRS; you don’t want to draw this type of attention.
  • Taxes aren’t just about reporting income and claiming deductions and credits. It also involves considerable planning. For example, an accountant can help you understand the implications of hiring an employee versus using an independent contractor, or buying versus leasing a business vehicle. Your accountant can also help you choose the best type of qualified retirement plan for your business and make other tax-savvy decisions.

If your business involves inventory, you’ll want to stay on top of your merchandise and find new or better ways to handle your inventory. You can, of course, do things yourself using various software and other tools. But an accountant can offer guidance on:

Reporting inventory. There are choices on how to value inventory for tax purposes that can affect your after-tax earnings (or losses).

  • Warehousing. Where you store your inventory can impact state taxes.
  • How and when to take inventory. You’ll want to do a physical count of your merchandise on a regular basis—as suggested by your accountant.
  • Re-stocking. Determining when and how much to order can impact cash flow and profitability.

Bottom line:

Using an accountant can help you grow your business and avoid problems. If you have an accountant, review these areas with him or her. If you don’t have an accountant, consider engaging one. You can find an accountant by a referral from someone in business you know and trust, or through your state accounting society.  As well, to be well informed so you can ask your accountant better questions, find extensive tax information here.

Taxpayers face delayed refunds if tax code issues aren’t resolved

Posted on 14/10/202010/04/2021Categories TaxTags , , , , , , , , , ,   Leave a comment on Taxpayers face delayed refunds if tax code issues aren’t resolved

Taxpayers face delayed refunds if tax code issues aren’t resolved

IRS Commissioner Doug Shulman warned lawmakers Wednesday that making retroactive changes to the tax code in early 2011 could create an “unprecedented and daunting operational challenge” that could lead to service disruptions and delayed refunds for millions of taxpayers. Several popular tax breaks expired at the end of 2009, including a deduction for educators’ out-of-pocket classroom expenses and a property-tax deduction for homeowners who claim the standard deduction. Congress hasn’t acted on legislation that would extend the incentives through 2010.

Even more significantly, Congress hasn’t enacted a stopgap measure that would limit the number of taxpayers subject to the alternative minimum tax. The AMT is a parallel tax system that eliminates many popular deductions and credits, resulting in a higher tax bill. It was originally intended to prevent wealthy taxpayers from using loopholes and deductions to avoid paying any taxes. But it was never indexed to inflation, and in recent years, Congress has enacted a “patch” to limit its growth. If Congress fails to act by year’s end, more than 21 million taxpayers will face an average tax increase of $3,900 for tax year 2010.

Leaders from both parties assured the IRS in November that they plan to approve an AMT stopgap by year’s end. Shulman said he has directed the IRS technology team to program the agency’s computers accordingly. If Congress fails to approve the fix, Shulman said, “Our computers will have been programmed incorrectly, and we will need to delay filing for these individuals as we reprogram our computers to the actual law in effect.”

In the past, Congress has approved tax extenders and the AMT before Dec. 31. This year, though, tax code updates have been tied up in the debate over the expiration of the Bush tax cuts. Republicans want all of the tax cuts extended, while President Obama wants to allow them to lapse for wealthy taxpayers.

“While I know you and your colleagues have a difficult challenge to enact legislation this year,” Shulman said, “I want to stress that it would be extremely detrimental to the entire tax filing season and to tens of millions of taxpayers if tax law changes affecting 2010 are deferred and then retroactively enacted in 2011.”

Gustavo A Viera CPA

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Balancing Profits and Customer Service: Tips for Determining Effective Pricing Policy Practices

Posted on 14/10/202014/10/2020Categories Business TrendsTags , , , , , , , , , , , ,   Leave a comment on Balancing Profits and Customer Service: Tips for Determining Effective Pricing Policy Practices

Balancing Profits and Customer Service: Tips for Determining Effective Pricing Policy Practices

Successful small businesses owners know there is a delicate balance between customer service needs and maximizing profits. In an ideal world, attracting new customers and maintaining existing relationships happens in sync with a rise in profits. In reality, a low pricing strategy may increase customer interest but result in lost revenue, while a high pricing strategy may alienate customers. For help with determining the best pricing plan for your business, read on.

How Do I Make a Profit?

The rule of thumb to increase profits is fairly straight-forward: do your research and sell your brand.

Do Your Research

  • Market research: Market research is essential when it comes to pricing. Look at national, regional, and local industries to determine pricing baselines for your goods and services. On the other end, find out the ceiling price – the highest price that customers are willing to pay for your goods and services. An honest assessment of your pricing baselines will help inform the decision of where your prices should fall. Start your search online, looking for CPAndustry standards and publications.
  • Benchmarking: Benchmarking is also a valuable tool to compare your goods and services with your competitors’. Competitive analysis and competitive pricing will help you determine how your prices compare to local, regional, or national competitors.
  • Factor in All Costs: Remember to factor in all costs including office space, equipment supplies, and fringe benefits like social security and health insurance, environmental demands like legal and tax constraints, when deciding on your pricing policy. If the price that you would like to set does not meet these costs demands, you may want to reconsider your pricing strategy or figure out a way to rectify your cost needs and pricing goals. Learn more about developing a marketing budget for your small business.

Sell Your Brand

  • Brand Exclusivity: What makes your product or service unique? Why should customers buy your product or service instead of a competitor’s? Unique business concepts and services may help protect your business from falling industry prices- because customers are more willing to pay higher prices for niche goods and services they cannot find elsewhere.
  • Reputation: Develop a good name and reputation for your products and services. Customers would be willing to pay more for a brand they trust and/or are more likely to become repeat customers.

How Do I Attract and Maintain my Customer Base?

Selling your brand – developing brand exclusivity and a good reputation – attracts customers. However, to keep the customer base that you have developed requires (1) a customer reward system; (2) clear communication.

  • Reward Customer Loyalty: Customers like to feel special and unique. You can especially by being rewarded for their loyalty to your product(s) or service(s). Discounts for repeat customers are a good way to build long-term relationships with loyal customers. Read more about reaching out to customers with the 30/30 retail rule and holiday marketing tips that don’t break the bank.
  • Communicate Your Services: Communicate the uniqueness of your products and services to attract customers into doing business with you by honing your elevator speech. Be straightforward and transparent with fees and other charges; it is a gateway to superb customer service in keeping customers happy.

When you are planning your pricing policy, keep in mind the two important factors of high profits and strong customer base. Remember to do your research and sell your brand to improve your profit margins, but don’t forget to reward customer loyalty and maintain outstanding customer service to keep up with those gains. At the end of the day, the two go hand in hand in insuring the success of your small business.

Gustavo A Viera CPA

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Understanding and Expanding Cash Flow

Posted on 14/10/202010/04/2021Categories Business TrendsTags , , , , , , , , , , , , , 1 Comment on Understanding and Expanding Cash Flow

Understanding and Expanding Cash Flow

For small businesses, cash is king.  You need it to start, operate, and expand your operations, but many small business owners often have trouble managing and maintaining appropriate levels of cash. Inaccurate cash flow statements – or lack of available cash – can affect not only your business’s everyday operations, but also impacts outside factors like loan eligibility.

Cash Flow 101

Cash flow is the movement of money in and out of your business.

  • Inflow comes from operations such as the sale of goods and services, loans, lines of credit, and asset sales.
  • Outflow occurs during operations such as business expenditures, loan payments, and business purchases.

It’s crucial to balance these two figures and maintain a reasonable balance of cash at all times.  An effective cash flow system will help you manage funds to cover operational costs and bills and you help to foresee potential problems in the future.  Inaccurate cash flow statements – or even lack of available cash – can affect not only your business’s everyday operations, but also outside factors like loan eligibility.

Profit and loss statements and income statements can be used to determine projections for future cash flow trends of your business.  These financial documents are instrumental in making cash flow projections, but a cash flow statement serves an important and independent purpose – it accounts for non-cash items and expenses to adjust profit figures.  Cash flow statements display not only changes over time, but also available net cash.

Develop a Cash Flow Statement

Cash flow statements are generally separated into three parts:

  • Operating Activities – This section evaluates a business’s net income and loses.  By assessing sales and business expenditures all income from non-cash items is adjusted to incorporate inflows and outflows of cash transactions to determine a net figure.
  • Investment Activities – This section reports inflows and outflows from purchases and sales of long-term business investments such as property, assets, equipment, and securities.  For example – if your bakery business purchases an additional piece of kitchen equipment, this would be considered an investment and accounted for as an outflow of cash in this section.  If your business then sold equipment that was no longer needed, this would be considered an inflow of cash and accounted for in this section.
  • Financing Activities – This section accounts for the cash flow trends of all money that is related to the financing of your business.  For example – if your small business was issued a loan from the bank to assist with start-up funding, the loan itself would be considered an inflow of cash.   Loan payments would be considered an outflow of cash, and both would be recorded in this portion of the cash flow statement.

Gustavo A Viera CPA

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Small Business Expenses and Tax Deductions

Posted on 14/10/202030/01/2021Categories TaxTags , , , , , , , , , , , , , ,   Leave a comment on Small Business Expenses and Tax Deductions

Small Business Expenses and Tax Deductions

Guidance for the Self-Employed and Sole Proprietors

There are two basic tax concepts new business owners need to add to their vocabulary: business expenses and capital expenses.

Business expenses:

are the cost of conducting a trade or business. These expenses are common costs of doing business, and are usually tax deductible if your business is for profit. For example, costs of renting a storefront, business travel, and paying employees are all deductible business expenses.

Capital expenses:

are the costs of purchasing specific assets, such as property or equipment, that usually have a life of a year or more and increase the quality and quantity of products and services. For example, if you own a landscaping business and you purchase mowers and excavating equipment, these costs are capital expenses and do not qualify as deductible business expenses. However, you can recover the money you spent on capital expenses through depreciation, amortization, or depletion. These recovery methods allow you to deduct part of your cost each year. In this way, you are able to recover your capital expenses over time.

Figuring business expenses vs. capital expenses is not always clear cut. Consider taking advantage of free tax training opportunities offered by the IRS. If you have hired an accountant, you should also seek his or her advice regarding tax deductions.

The following information provides a brief overview of expenses that quality as tax deductions, with links to resources that provide clear guidance on deducting and capitalizing your expenses.

Deducting Business Expenses

To be deductible, a business expense must be both “ordinary” and “necessary.” An ordinary expense is one that is common and accepted in your field of business. A necessary expense is one that is helpful and appropriate for your business.

Personal vs. Business Expenses

Generally, you cannot deduct personal, living, or family expenses. However, if you have an expense for something that is used partly for business and partly for personal purposes, divide the total cost between the business and personal portions. You can deduct the business portion. For example, if you borrow money and use 70% of it for business and the other 30% for a family vacation, you can deduct 70% of the interest as a business expense. The remaining 30% is personal interest and is not deductible.

Home Office Deduction

If you use part of your home for business, you may be able to deduct expenses for the business use of your home. These expenses may include mortgage interest, insurance, utilities, repairs, and depreciation. The home office deduction is available for homeowners and renters, and applies to all types of homes, from apartments to mobile homes. There are two basic requirements for your home to qualify as a deduction:

1. Regular and Exclusive Use. You must regularly use part of your home exclusively for conducting business. For example, if use an extra bedroom to run your online business, you can make home office deduction for the extra bedroom.

2. Principal Place of Your Business. You must show that you use your home as your principal place of business. If you conduct business at a location outside of your home, but also use your home substantially and regularly to conduct business, you may qualify for a home office deduction. For example, if you have in-person meetings with patients, clients, or customers in your home in the normal course of your business, even though you also carry on business at another location, you can deduct your expenses for the part of your home used exclusively and regularly for business. You can deduct expenses for a separate free-standing structure, such as a studio, garage, or barn, if you use it exclusively and regularly for your business. The structure does not have to be your principal place of business or the only place where you meet patients, clients, or customers.

Generally, deductions for a home office are based on the percentage of your home devoted to business use. So, if you use a whole room or part of a room for conducting your business, you need to figure out the percentage of your home devoted to your business activities.

Visit the our page on Home Office Deductions for a full explanation of tax deductions for your home office.

Travel, Meals, Entertainment and Gifts

Generally, you can deduct all of your travel expenses if your trip was entirely business-related. These expenses include the travel costs of getting to and from your business destination and any business-related expenses at your business destination, including tips, cab fare, and other “life on the road” expenses such as dry cleaning. Meals are the only exception. You can deduct only 50 percent of your meals while traveling.

If your business trip includes personal side trips or extended stays for a personal vacation, you can only deduct travel expenses used for business-related activities. For example, suppose you live in Atlanta, and then went on a 5 day business trip to New York. You spent 3 days in business meetings, and two days sight-seeing and visiting friends. You can only deduct the costs of the 3 days you spent on business activities.

If you take your family on vacation to Hawaii, and conduct business there, you can deduct any expenses that are directly related to your business. However, you may not deduct the entire cost of the trip as business expense.

Business Use of Your Car

If you use your car in your business, you can deduct car expenses. If you use your car for both business and personal purposes, you must divide your expenses based on actual mileage. Refer to the Car Expenses Section in IRS Publication 463, Travel, Entertainment, Gift, and Car Expenses. For a list of current and prior year mileage rates see the Standard Mileage Rates. Also, be sure to read Tax Deductions for Personal Vehicles Used for Business Purposes.

Other Types of Deductible Business Expenses

There are numerous other costs of doing business that qualify as deductions. These include but are not limited to the following:

  • Employees’ Pay – You can generally deduct the pay you give your employees for the services they perform for your business.
  • Interest – Business interest expense is an amount charged for the use of money you borrowed for business activities.
  • Retirement Plans – Retirement plans are savings plans that offer you tax advantages to set aside money for your own, and your employees’, retirement.
  • Rent Expense – Rent is any amount you pay for the use of property you do not own. In general, you can deduct rent as an expense only if the rent is for property you use in your trade or business. If you have or will receive equity in or title to the property, the rent is not deductible.
  • Taxes – You can deduct various federal, state, local, and foreign taxes directly attributable to your trade or business as business expenses.
  • Insurance – Generally, you can deduct the ordinary and necessary cost of insurance as a business expense, if it is for your trade, business, or profession.
  • Business-Related Education – Such as seminars, classes, educational tapes or CDs and conventions.

Deducting Capital Expenses

There are two ways to deduct capital expenses. You can “depreciate” them by deducting a portion of the total cost each year over an asset’s useful life; or you might be able to deduct the cost in one year as a Section 179 deduction.


If property you acquire to use in your business is expected to last more than one year, you generally cannot deduct the entire cost as a business expense in the year you acquire it. You must spread the cost over more than one tax year and deduct part of it each year on Form 1040, Schedule C. This method of deducting the cost of business property is called depreciation.

What property can be depreciated?

You can depreciate property if it meets all the following requirements.

  • It must be property you own.
  • It must be used in business or held to produce income. You never can depreciate inventory because it is not held for use in your business.
  • It must have a useful life that extends substantially beyond the year it is placed in service.
  • It must have a determinable useful life, which means that it must be something that wears out, decays, gets used up, becomes obsolete, or loses its value from natural causes. You never can depreciate the cost of land because land does not wear out, become obsolete, or get used up.
  • It must not be excepted property. This includes property placed in service and disposed of in the same year.


You cannot depreciate repairs and replacements that do not increase the value of your property, make it more useful, or lengthen its useful life. You can deduct these amounts on line 21 Form 1040, Schedule C or line 2 of Schedule C-EZ.

Depreciation Method

The method for depreciating most business and investment property placed in service after 1986 is called the Modified Accelerated Cost Recovery System (MACRS). MACRS is discussed in detail in How to Depreciate Property (IRS Publication 946).

Section 179 Deduction

Purchasing such things as office equipment and computer software would seem like ordinary and necessary expenses, however, the IRS considers these costs to be capital expenses. Unlike assets that are acquired for the production of income (such as investment property), Section 179 of the U.S. Internal Revenue Service Code gives you the option to deduct the costs assets acquired for business use as expenses in the year you purchased the assets, instead of requiring them to be capitalized and depreciated. Eligible property is generally limited to tangible, depreciable property which is acquired for use in the active conducting of a trade or business. Section 179 deductions are subject to dollar amount and deductible limitations.

Listed property

You must follow special rules and recordkeeping requirements when depreciating listed property. Listed property is any of the following.

  • Most passenger automobiles.
  • Most other property used for transportation.
  • Any property of a type generally used for entertainment, recreation, or amusement.
  • Certain computers and related peripheral equipment.
  • Any cellular telephone (or similar telecommunications equipment).

Form 4562.

Use Form 4562, Depreciation and Amortization, if you are claiming any of the following.

  • Depreciation on property placed in service during the current tax year.
  • A section 179 deduction.
  • Depreciation on any listed property (regardless of when it was placed in service).

For clear and complete rules for deducting depreciation, refer to How to Depreciate Property (IRS Publication 946).


Where depreciation allows you to deduct the cost of an asset over the asset’s life, amortization is a method of deducting certain capital expenses over a fixed period of time. The IRS allows you to amortize costs associated with:

  • Starting a Business, including the costs of researching a business idea and creating a legal entity
  • Getting a Lease on Business Property
  • Intangible Assets defined in Section 197 of U.S. Internal Revenue Service Code, including business licenses, permits, patents, trademarks, trade secrets, customer loyalty (goodwill); and the intangible value of physical items such as client lists and accounting and inventory records
  • Oil and Gas Exploration
  • Pollution Control Facilities
  • Research and Experimentation

Gustavo A Viera CPA

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Make time to get in touch with your customers

Posted on 14/10/202014/10/2020Categories Business TrendsTags , , , , , , , , , , ,   Leave a comment on Make time to get in touch with your customers

Make time to get in touch with your customers

Simply put, your success depends upon paying attention to your most important customers, all year long. Strike up a conversation with them from and listen. You just might be surprised at what you find.

Here are 10 reasons why:

1. It’s your busy season, not your customers’. Your customers don’t have the same pressures at the same time of the year that you do. They will most likely have the time to meet with you. And, in case it escapes your notice, they’ll also have time to meet with your competition, too.

2. You’ve got their attention. Customers are more aware of your services/products when they’re in the middle of using them. This makes the perfect time to engage them in meaningful conversations, reconfirming what’s most important to them and demonstrating how much you value your relationship with them.

3. Your weaknesses are exposed. During your busy season, your customers are experiencing your services and service levels while they are being stretched to their design limits. Weaknesses and cracks in the foundation may begin to appear. Proactively asking for feedback allows you to identify issues and fix them before they become major problems.

4. Not everyone is tied up with work. Not everyone within your company is consumed with serving customers during busy season. Someone – your marketing director, chief financial officer, the partner leading your management services practice, etc. – can find the time to visit your top clients.

5. The process can be outsourced. Most customers feedback initiatives can be outsourced without compromising their quality. In fact, an independent third party will reduce the risk of positive bias in the feedback and will demonstrate to your clients your commitment to the process.

6. Maintain your momentum. You’ll maintain the growth focus you had going into busy season. You won’t have to re-ignite your business development initiatives – or worse, start them over from scratch.

7. Find new opportunities. When you meet with customers and talk with them about their needs, you are likely to uncover opportunities for additional business of which you were previously unaware. This chance to cross-sell and up-sell services will let you hit the ground running once busy season is over.

8. Clients may feel ignored.  Your focus is probably set on getting your customers work completed and meeting deadlines. As a result, you run the risk of missing important cues from your top customers – and making them feel insecure about the relationship.

9. Your competitors are staying close to your key customers. Even if you think you’re staying close to your most important and profitable customers, you can be sure your competitors are doing their best to get even closer. And what better time to make significant advances than your busy season? The competition is betting that you’re too wrapped up with work to pay attention.

Ask yourself this question: Will your customers be inclined to listen to rivals who promise that they’ll love them more and charge them less? And then ask yourself: How can you be so sure?

10. There’s never a bad time to invest. There’s never a bad time to invest in customers feedback and retention – unless, of course, it’s after a key customers switches to a different company. Because then it’s too late.

We regularly find that between 60 and 80 percent of customers will tell you they are satisfied or even very satisfied with you and your company – right up until the moment they leave. When you compare the tangible benefits of retaining existing customers to the costs of securing new ones, making continuous investments in customers feedback and retention yields high returns on your invested time.

So what can you do to make your customers relationships more secure?

Put yourself in your customers’ position and think about when and how they experience your services/products. You’ll strengthen your bond with customers, reduce their vulnerability to the advances of your competitors, and accelerate your revenue and profit growth.

Gustavo A Viera CPA

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Three Big Mistakes Entrepreneurs Make When Starting Businesses

Posted on 14/10/202030/01/2021Categories Business TrendsTags , , , , , , , , , ,   Leave a comment on Three Big Mistakes Entrepreneurs Make When Starting Businesses

Three Big Mistakes Entrepreneurs Make When Starting Businesses

All too often they let naysayers discourage them, they fail to listen to market demands, and they don’t delegate enough.

“There’s no way any company will engage you rather than McKinsey,” the man scoffed. He looked at me with a mix of contempt and sympathy, the way people often look at beggars, and I would have been smart to heed his warning. After all, he was a senior executive at a big company, had an Ivy League pedigree and was part of the WASP-y country club set. He should know if my business idea was worthy. It could not be done, he concluded, and I should stop before I even started.

Fortunately for me, I’ve never been good at listening to detractors. I ignored his advice and the criticism of others who said I couldn’t open a Miami CPA Firm focused on small businesses in the middle of a recession with small businesses closing up shop by the thousands. Two years later I’m still here, and I’m having a ball every time a company picks us over one of the big firms. We do more than accounting, we’re consultants first. A value added service sorely lacking from most accountants business offerings.

A lot of people told me I couldn’t do what I was setting out to do when I was setting up my second company, the Miami SEO Consultants Inc. I can’t even count how many people looked at me like I was a naïve fool. But that didn’t stop me. I couldn’t let it. All entrepreneurs receive more criticism than kudos when starting out.

A key mistake many entrepreneurs make is letting detractors get them down and discourage them. Entrepreneurship is about disruption, changing the world order and doing things no one else thought possible.

Do you really think anyone told Steve Jobs at Apple that he could beat Microsoft? Or that anyone advised Bill Gates to drop out of Harvard to consign typewriters to the trash bin forever? I wonder how many people thought Howard Shultz could make people pay $4 for a cup of coffee at Starbucks when they could buy it for a buck at the corner store. Probably 9 out of 10 would have thought all those people were nuts. Now look who are the billionaires.

Never let the haters, bozos or naysayers stop you as an entrepreneur. You will run into a lot of them. I still do every day. Of course you can’t get so arrogant and pig-headed that you stop listening to others and heeding their advice, but you should never get so overwhelmed by doubters that you stop. If starting a company were easy, everyone would do it.

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New Rules Require Rental Property Owners to Issue 1099s

Posted on 14/10/202010/04/2021Categories TaxTags , , , , , , , , , , , ,   Leave a comment on New Rules Require Rental Property Owners to Issue 1099s

New Rules Require Rental Property Owners to Issue 1099s

 The recently enacted Small Business Jobs Act contained one provision that may have escaped the notice of taxpayers who own rental property, but will affect them starting in January. Under the provision, owners of property who receive rental income will be required to issue Forms 1099 to service providers for payments of $600 or more during the year.

The act subjects recipients of rental income from real estate to the same information-reporting requirements as taxpayers engaged in a trade or business. Thus, rental income recipients making payments of $600 or more to a service provider in the course of earning rental income are required to provide an information return (typically, Form 1099-MISC, Miscellaneous Income) to the IRS and to the service provider. This provision will apply to payments made after Dec. 31, 2010, and will cover, for example, payments made to plumbers, painters or accountants in the course of earning the rental income.

While rental property owners will not actually issue the required 1099s until early 2012, they need to start keeping adequate records of payments starting Jan. 1, 2011, so they will be prepared to issue correct 1099s. They will also need to obtain the name, address and taxpayer identification number of the service provider, using Form W-9 or a similar form.


The law provides exceptions for individuals who can show that the requirement will create a hardship for them. The IRS is directed to issue regulations on this, but has not done so yet, so there is currently no guidance on what constitutes sufficient hardship to qualify for the exception or how a taxpayer would demonstrate that hardship.

The law also contains an exception for individuals who receive rental income of “not more than a minimal amount.” Again, the IRS is directed to issue regulations to determine what constitutes “not more than a minimal amount” but has not done so yet.

If such guidance is not forthcoming before Jan.1, all individuals who receive rental income should start keeping records of payments to service providers so they are prepared to issue 1099s in 2012.

The law also contains an exception for members of the military or employees of the intelligence community if substantially all their rental income comes from renting their principal residence on a temporary basis.

Information Return Penalties

Taxpayers should also be aware that in addition to creating a new reporting requirement, the act increases the penalties for failure to file a correct information return. The first-tier penalty increases from $15 to $30; the second-tier penalty increases from $30 to $60; and the third-tier penalty increases from $50 to $100. For small business filers (with average annual gross receipts under $5 million), the calendar-year maximum increases from $25,000 to $75,000 for the first-tier penalty; from $50,000 to $200,000 for the second-tier penalty; and from $100,000 to $500,000 for the third-tier penalty. The minimum penalty for each failure due to intentional disregard increases from $100 to $250.

The increased penalties apply to information returns required to be filed on or after Jan. 1, 2011.

Expanded 1099 Reporting After 2011

Currently, payments to corporations are excepted from the 1099 information reporting requirements, but starting for payments after Dec. 31, 2011, businesses (including, now, individuals who receive rental income) will be required to file an information return for all payments aggregating $600 or more in a calendar year to a single payee, including corporations (other than a payee that is a tax-exempt corporation). This change was made by the Patient Protection and Affordable Care Act, which was enacted in March. That act also expanded the information reporting requirements to include gross proceeds paid in consideration for property.

Gustavo A Viera CPA

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