Category Archives: Tips

Education, IRS, Tips

FREE Webinar: Advising Small Businesses In A COVID-19 Economy by Hector Garcia

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Regular readers of this blog know that I’m a huge fan of Hector Garcia and the various webinar series he’s presented through the years. He has done so much to help QuickBooks ProAdvisors and their clients, that we are all truly indebted to him.

He maintains this helpful approach by offering a free webinar about how to assist small business clients during this difficult time. Here’s the webinar — and I’ve summarized his notes and posted them below.

 

Summary of Hector Garcia’s COVID-19 for Small Businesses Webinar —

What small businesses need in today’s environment:
• Cash Flow
• Morale
• Purpose
• Retooling

Cash Flow
• Generate more sales – sell online, sell other things, web-based versions of your services
• New channels and forms of income – offer delivery, pre-sell future products/services, offer white-glove “touchless” alternative
• Reduction of expenses – downsize ASAP, cut unnecessary monthly services, ask vendors for “special programs” or reduce services to bare minimum, share expenses/ call friends and colleagues to share plans and services
• Delay payment of expenses – use credit card for purchases, switch to vendors that accept credit cards, ask for payment terms or extend current ones
• Cash Injection (capital or loan) – SBA loans, State-sponsored disaster/ economic relief loans
• Float Payments

Morale
• Mental health (someone to talk to – setup mastermind groups with colleagues)
• Staying in business, staying relevant, sell “something”
• Keeping talented employees (choosing which ones to let go)
• Employees not feeling like they can lose their jobs
• Ability to know that downsized employees are going to be “ok”
• Offer-up excess capacity (staff, tools, infrastructure, knowledge)

Purpose
• Businesses should have a vision/mission statement – is there a way they can still fulfill that even if the business model substantially changes?
• If they change target market, could they still fulfill their purpose?
• If they change business models and purpose, could the new purpose be as fulfilling?
• Do you have a purpose-driven brand?
• Do you have a loyal customer base that you can contact online?

Retool
• Does the business have a valuable online presence or community? If not, time to build it.
• Does the business have a contingency plan for working from home? If not, time to start preparing one.
• Is this business “social distancing” proof? If not, time to build a plan.
• Does the business have ability to sell online? If not, time to create it.

5 Key Advisory Questions
• What opportunities to fix things about your business can you take advantage of during the interruption?
• What have you learned about your business during the interruption that you didn’t know before?
• If you could have done something before the interruption what would it have been?
• As your business returns to normal what opportunities are there for you to better serve your customers?
• What is the question, that if you had the answer, would allow you to more easily recover from the interruption?

Thinking outside the box —
• Digital Tip Jars
• Gift cards, Pre-paid services, packaged discounted future services
• Reduction of services, but maintaining the customer relationship
• Delivery
• Serving the essential industries (food distribution, healthcare)
• Distilleries making sanitizer
• Restaurants (Curbside pickup, free TP/sanitizer, selling frozen food, selling “kits”)
• Farmers (drive trough fresh market)
• Babysitting for healthcare workers working overtime – https://www.mncovidsitters.org
• Drive-through confessions – https://www.deseret.com/platform/amp/faith/2020/3/23/21189502/confessions-drive-upcatholic-sacrament-faith-religion-parishioners-grace-mercy-forgiveness-covid
• Online Classes – “Zoom” version of their business – https://www.facebook.com/GuzmanDojo/?hc_location=ufi

Loans
• Check your state’s Dept of Revenue website
• County & City resources
• Check Gusto’s COVID-19 Resources spreadsheet:
https://docs.google.com/spreadsheets/d/1SRBZE2_6Nftwd02M6Oxj8MoeuZ7y93spXIgIPhkkp2w/edit#gid=0
• SBA Disaster Loan
• SBA Express Bridge Loans

Tips for Loan preparation:
• Owner’s credit will be pulled, so get a copy of the credit report (Experian, Equifax, and Transunion all offer FREE versions).
If score is under 700, have statement ready to explain areas of issues in the credit
• Use the credit report to build debt (liabilities) portion of Personal Financial statement
• Identify debt that is listed both on the individual’s (owner) personal credit and also on business balance sheet (have that narrative ready)

Beyond loan application and submitting tax returns, proactively prepare:
• Personal Financial Statements for all owners (SBA form 413)
• Business Debt Schedule SBA form 2202
• Monthly sales figures: 3 years historic, plus current year with estimate/forecast – SBA form 1368
• Have all 4506-T Forms readily signed for personal and business tax returns
• Have copies of extensions filed for 2019 returns (if extension was filed)
• Have books completed up to last month prior to loan application
• Draft a Loan narrative of what the loan proceeds will be used for, how you will be able to stay in business and keep employees on staff
• Draft Financial projections that show the post-interruption numbers supporting a profitable business that can REPAY the loan

Loan forgiveness “Paycheck protection loan” – may be passed by Congress today
Keep tight records of:
• Payroll costs (burdened)
• Rents and mortgage interest
• Utility payments
• Essential costs to maintain business operational
Comparing 8-week period from loan proceeds vs. previous year

How can accountants with multiple clients help?
• Make inventory of all your clients’ excess capacity (laid off workers, kept workers (and their skillsets), information about hours they work or are available, list of tools/infrastructure with excess capacity, unique knowledge/knowhow how team members)
• Make a database public within your client base (use Google Sheets or Airtable)
• Help them do business with each other or barter

Companies/Industries growing and hiring – if you need a job NOW…
• US Census
https://2020census.gov/en/jobs.html
• Monster.com’s top 100 Companies Hiring:
https://www.monster.com/career-advice/article/companies-hiring-now
• Amazon is hiring 100,000 new associates:
https://blog.aboutamazon.com/operations/amazon-opening-100000-new- roles
• Telecommunication software companies (Slack and Zoom)
https://jobs.lever.co/zoom
https://slack.com/careers#openings
• Grocery Stores, Pharmacies, Walmart, etc.
• Logistics and delivery companies
• Restaurants that do delivery
• 50,000+ Work from home Jobs:
https://www.indeed.com/jobs?q=work+from+home&l=Miami%2C+FL
&from=homepage_relatedQuery
• 200,000+ transportation Jobs:
https://www.indeed.com/q-Transportation-jobs.html

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

Education, Illinois, Tips

City of Chicago March 2020 Business Education Workshops

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Each month the City of Chicago offers twice-weekly (Wed & Fri) FREE business education workshops presented by experts in private practice as well as representatives from various city departments. There are quite a few good ones this month — see the list below — and they’re all offered at City Hall (right downtown and near public transit). To register for any of them, email BACPoutreach@cityofchicago.org or call 312.744.2086.

City Inspections – Ask Questions, Get Answers
Wed, March 4, 3:00 PM – 4:30 PM
City Hall, 121 N. LaSalle St. – 8th Floor, Room 805

Presented by the City of Chicago

To operate a successful business in Chicago you need to know what it takes to maintain compliance. Officials from several City departments will provide insight on how to operate safely, stay compliant, help prepare for inspections and highlight the do’s and don’ts of operating a business.

Empieza Un Pequeno Negocio
Fri, March 6, 9:30 AM – 11:00 AM
City Hall, 121 N. LaSalle St. – 11th Floor, Room 1103

(WorkshopPresented in Spanish)
Presentado por el Northwest Side CDC(Northwest Side Community Development Corporation)

Venga aprender como abrir un negocio, los pasos quedebe de tener y no tomar. Habláramos sobre creando un plan de negocio, entiendosu mercado, y creando un plan de acción. También se hablara los pasos parasacar su licencia de negociante. 

Small Business Center on the Road Expo
Sat, March 7, 10:00 AM – 2:00 PM
Kennedy King College – Building U, 740 W. 63rd Street
The Small Business Center on the Road Expo brings business resources to the community for new and existing entrepreneurs looking to start or grow their business in the City of Chicago. This expo is free and open to the public. You can find more information or register expo at www.chismallbizexpo.com 

Employee (HR) Handbooks & Workplace Policies
Wed, March 11, 3:00 PM – 4:30 PM
City Hall, 121 N. LaSalle St. – 8th Floor, Room 805

Presented by Charles Krugel, a Management-Side Labor, Employment and Human Resource Attorney
Open discussion concerning whether a business needs a handbook, written policies & procedures, and how to implement them.

Buying and Selling a Business: Find, Evaluate and Negotiate
Fri, March 13, 9:30 AM – 11:00 AM
City Hall, 121 N. LaSalle St. – 11th Floor, Room 1103

Presented by LemaKhorshid, Fuksa Khorshid, LLC            

Do you want to buy a business and don’t know where to start? In this step-by-step seminar learn how buying a business can be an alternative to starting up a new business. Also, learn how to effectively analyze new business opportunities and understand a business purchase contract so that you can quickly close the deal.

How to Open a Concession at O’Hare and Midway International Airports
Wed, March 18, 3:00 PM – 4:30 PM
City Hall, 121 N. LaSalle St. – 8th Floor, Room 805

Presented by City of ChicagoDepartment of Aviation – Concessions Department

Are you interested in operating a restaurant or shop at O’Hare or Midway International Airport, but don’t know where to begin? Come and learn about the Request for Proposals (RFP) process and how to operate a business at the airport. This workshop will also provide an overview of the Airport Concessions Disadvantaged Business Enterprise (ACDBE) program.

How to Obtain a Mobile Business License
Fri, March 20, 9:30 AM – 11:00 AM
City Hall, 121 N. LaSalle St. – 11th Floor, Room 1103

Presented by City of Chicago Department of BusinessAffairs & Consumer Protection (BACP)

From Food Trucks to Peddlers to Mobile Merchants, not all businesses need a store front from which to operate and Chicago is proud to support many types of mobile businesses. Attend this workshop to learn how to obtain a Mobile Food or Retail License from the BACP, including operational conditions, required inspections and application processes. Licenses covered by this workshop will include Mobile Food Dispenser and Preparer (Food Trucks), Mobile Merchant, Mobile Prepared Food Vendor, Mobile Frozen Desserts Vendor, Produce Merchant, and Peddler.

What Kind of Funding is Right For You/Your Business
Wed, March 25, 3:00 PM – 4:30 PM
City Hall, 121 N. LaSalle St. – 8th Floor, Room 805

Presented by the U.S. Small Business Administration

If you need access to capital to achieve your business goals, the SBA offers a variety of funding programs for all kinds of small business ventures. Learn what kind of funding is right for you!

What You Need to Know About Your Business & Taxes
Fri, March 27, 9:30 AM – 11:00 AM
City Hall, 121 N. LaSalle St. – 8th Floor, Room 805


Presented by the Internal Revenue Service (IRS) and Ladder Up


This workshop will answer important tax questions for your business including: Are you required to file a tax return? Is your worker an independent contractor or an employee? What will the IRS request during an audit? Are you required to make estimated tax payments? What resources does the IRS have for small business owners?

To register for a workshop, email BACPoutreach@cityofchicago.org or call 312.744.2086.

Also, in case you weren’t aware, BACP offers a Business Start-Up Certificate Program, designed to give business owners the essential elements in starting and growing a business. Attend nine workshops at BACP and learn the essentials of business planning, financing, marketing, legal issues, technology and more. Complete the program workshops within six months and earn your certificate, as well as get free advice on your business plan. You can register for the Business Start-Up Certificate Program at any BACP workshop. Learn about the full set of BACP offerings here.

And visit their Business Video Library here.

Source: City of Chicago :: Business Education Workshop Calendar

Illinois, POS - Point of Sale, Tips

Increase in Chicago Restaurant Tax as of January 1, 2020

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City of Chicago Dept of Finance

It recently came to my attention that apparently restaurants in Chicago were not notified by the city of an important change to local taxes they are required to collect.

The Chicago City Council recently doubled the city’s 0.25% restaurant tax, which means that starting January 1, 2020, the city of Chicago’s restaurant tax rate is 0.50%.

Therefore, the total sales tax for restaurants in the city of Chicago is now supposed to be 10.75% instead of 10.50% — this includes state and local sales taxes as well as the city’s 0.50% restaurant tax.

(For restaurants located within the MPEA Food and Beverage Tax zone, the total sales tax will be 11.75% — made up of sales taxes + 0.50% restaurant tax + the 1.00% MPEA food and beverage tax).

Unfortunately, it doesn’t appear that this change was communicated widely to restaurant owners, so many of them did not update their Point of Sale systems to increase the tax charged to customers. This means they probably underpaid their monthly restaurant tax and will owe when they file their annual restaurant tax returns.

I suggest the following steps:

  1. Update your Point of Sale software to reflect the 10.75% tax immediately, so you can begin collecting it from customers.
  2. Calculate the approximate underpayment for January and February (0.25% of sales) and add it to your restaurant tax payment for March.
  3. It will all come out in the wash when you file your annual restaurant tax return in August.

For more information on state and local changes to legislation, rulings and ordinances that affect restaurants, check out this briefing from the Illinois Restaurant Association: News Laws in Effect as of January 1, 2020 – Illinois Restaurant Association

And for information on this and other consumer taxes in Illinois, check out this recent article by The Civic Federation.

Education, IRS, Tips

SECURE Act Summary & Planning Tips

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Just before 2019 ended, Congress passed the SECURE Act (“Setting Every Community Up for Retirement Enhancement”). It had been languishing for months and was suddenly wrapped up in the budget legislation and passed accordingly — a surprise to most of us. It’s designed to make retirement plans more available to American workers, but there are also quite a few revenue-raisers in the bill as well that will throw a wrench into existing estate planning.

As a result: for employers, it’s a good time to revisit the retirement options you’re offering your staff; and for taxpayers, it’s a good time to revisit your retirement and estate planning.

Forbes provided a good summary as to the highlights of the Act.

Several rules related to tax-advantaged retirement accounts were altered. Here’s what will change:

  • The age at which retirement plan participants need to take required minimum distributions (RMDs) has changed to age 72 (changed from 70 ½). This only applies to those who hadn’t reached 70 ½ by the end of 2019.
  • Limited to $10,000 annually, the IRS has approved the use of 529 accounts for qualified student loan repayments.
  • For child adoption and family planning, individuals can withdraw up to $5,000 from 401(k) accounts penalty-free to assist in the cost.
  • Employers with an automatic enrollment into a 401(k) or SIMPLE IRA plan will receive a maximum tax credit of $500 per year.
  • Part-time employees who work at least 1,000 hours throughout a year or have 500 hours of service within three consecutive years can enroll in the employer-sponsored retirement plan.
  • An option for plan sponsors to use annuities in workplace plans to reduce liability if the insurer cannot meet its financial obligations.

If you’re an employer, definitely take a look at the credit available toward starting up a company retirement plan, and if you’re an employee, let your boss know about this credit, and that many part-time employees are now eligible to participate, but without tipping the scales away from full-time, highly-compensated employees. It’s a win-win.

As an employee, remember that there is still a credit for lower-income taxpayers for saving toward retirement, called the Retirement Savers Credit. In my work as a tax preparer I see this as an underused but very valuable perk toward getting folks started on saving for the future. Nerd Wallet wrote up a nice summary of the credit.

The SECURE Act also impacts so-called “Stretch” and Roth IRAs. It caps the distribution period for Stretch IRAs (a type of inherited Traditional IRA plan) to ten years, inflating the taxable income for recipients who otherwise would have taken smaller distributions over a longer period of time. This makes Roth IRAs more attractive — because when a Roth is inherited, it doesn’t have the same effect of bumping beneficiaries into a higher tax bracket (since with a Roth, the tax was paid before the IRA was funded).

Henry Montag of Bloomberg Tax offers a clear explanation of this situation, as well as some great planning tips, here — INSIGHT: Planning Considerations Regarding the SECURE Act.

Some options for estate planning now that “Stretch” IRAs aren’t as attractive include:

  1. Taxable investment accounts
  2. Life insurance
  3. Leave the IRA to a charity
  4. Roth conversions

Regardless of your tax bracket or plans for retirement, the SECURE Act will likely affect you in some way, shape, or form… so be proactive and work with your CPA or lawyer to make sure you’re making the most of it.

IRS, Software, Tips

IRS Free File Program For Taxpayers With $69,000 of Income Or Less

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The IRS has a partnership with ten leading tax preparation software companies that allows users with income of $69,000 or less to use their Free File Software program — though fees for state returns and/or e-filing will apply, and the service is not available for all tax forms.

(As a tax preparer, I feel an obligation to point out that how much money a person makes rarely correlates to their being qualified to self-prepare tax returns, and that there are many situations when working with a qualified and responsible CPA or EA will be a much better decision. However, if you are going to be preparing and filing your own taxes anyway, why not take advantage of the Free File program if you meet the requirements?)

Free File Software provides free federal tax prep and e-file for taxpayers. Select a brand-name software program, create an account, and then the software guides you through return preparation.

  • Use free brand-name software to prepare and print.
  • Software guides you through return preparation.
  • Need Help with an error or the software? Contact the company for free customer service.
  • State return preparation and e-file is available for free but fees may apply.
  • Available if your Adjusted Gross Income (AGI) is $69,000 or less.
  • Offers the most commonly used forms.

Source: About the Free File Program | Internal Revenue Service

Tips

Setting Healthy Boundaries with Clients

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More than ever before, people can work where they want, when they want. Research shows that flexible work allows people to take better care of themselves and spend more time with family and friends. Conversely, research also indicates that just the expectation of receiving work emails after hours can cause anxiety and stress -– not just in the worker, but in members of their family.

A recent AccountingWEB article by Sandra Wiley reminds us that:

“The first step toward establishing boundaries is to realize that you need to take responsibility for setting them. Often, the biggest enemy is ourselves – not the technology, clients or employers. We think we need to be available all the time because we have a mobile device or a home office, but in most cases, it’s simply not the reality – nor should it be.”

I recognize this is true — however, I take great pride and derive fulfillment and satisfaction from my job when I feel like I can be there for clients as they need me. Possibly more importantly, I love being able to take at least one stress off the shoulders of my small-business clients (who are wearing far too many hats as it is) by their just “knowing” that I’ve got their back. So even if there isn’t an emergency, they find themselves with less anxiety, because they don’t necessarily need to anticipate the possibility of having one. They can focus on the day-to-day of running a business.

It feels terrible to find out that a client had a crisis and didn’t contact me, because they “didn’t want to bother” me. I want them to bother me when I’m needed. I want to help make their problems less painful. And chances are, if they’re having an accounting “emergency”, I’ve seen it happen before, with other clients, and I may have some insight on how to deal with it as painlessly as possible. And sometimes, when they try to deal with it themselves, without assistance, it simply causes a bigger problem for all of us down the road.

So what’s the solution? What happens when too many clients have crises simultaneously? What happens when a client feels their needs are time-sensitive and you disagree? And how do you ever take a true “day off (when you know no one can reach you, or there’s no need to even think about your phone or laptop)?

I don’t know the answer — and neither does this article, but it gave me some more ideas to consider. For example, the author discusses “practicing what you preach” if you are setting boundaries with clients:

“Occasionally, I’ll open my laptop outside of my “office hours” to catch up on emails in the late evening. To respect my clients’ time and reinforce my own boundaries, I set up a rule on my email to only deliver emails during work hours. I can compose a response at 10 p.m., but it won’t hit my client’s inbox until 7 a.m. the following day. If you tell your clients you’re not available in the evenings, then you’re sending emails at 10 p.m., clients will start thinking you actually are available at that time.”

That said, I love getting work done in the wee hours, when everything is quiet and I can concentrate with few interruptions. It’s a joy to find a client responding to my emails at that time, bonding over our night-owl tendencies, and working out a solution to a problem before bedtime.

For me, the ideal situation would be not to set these boundaries — but also to make sure that folks know I can’t be there for them 24/7. When I was in the hospital and folks had an emergency, I simply had an out-of-office email response set, explaining my very real and human situation, and asking them to text in the case of a true accounting “emergency”. Everyone was great about it except one client — who I later decided to leave, since it was clear we weren’t a good fit. The experience, though challenging, brought out the best in my staff and my clients.

I recently brought on a client who said that her biggest frustration with her former CPA was poor communication and unanswered calls and emails. I responded and told her outright that there are only four of us in my firm — and three are part-time — and we just don’t have the capacity to respond to emails within 24 hours — in fact, it’s sometimes 48 hours, or a week, or three weeks! But that if she ever had an urgent need, she could always text me, and I’d let her know if it was something I could make happen on short notice… or, if she felt like she’d been waiting on a response that may have fallen through the cracks, that she could always just shoot me a text. She loved the transparency and the setting of expectations, and realized in the end that it wasn’t a quick response she wanted… it was knowing what to expect, and knowing how to respond. And we’re enjoying working together.

So although I disagreed with much of the advice the author of this article had to share — for my own time and place in life at this moment, at least — I definitely saw the value of thinking through the whys and hows of running your own business in an “always on” culture. She closes with some very wise words, which I wholeheartedly agree with:

“If you’re having dinner with your family, leave your phone in another room, turn off your ringer and let calls go to voicemail. When I go to dinner with a client, I leave my phone in my purse or even back in my hotel room so I won’t be distracted during a face-to-face conversation.

The way we honor relationships is to give them time. Protect and honor your relationships with your family, friends, clients and yourself by setting boundaries, communicating them clearly, and turning off your phone and laptop. In an increasingly ‘always on’ culture, we can’t forget the importance of unplugging.”

Source: How to Set Healthy Boundaries with Clients

Education, Illinois, IRS, Tips

Chicago Feb 2020 Business Education Workshops

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Each month the City of Chicago offers twice-weekly (Wed & Fri) FREE business education workshops presented by experts in private practice as well as representatives from various city departments. There are quite a few good ones this month — see the list below — and they’re all offered at City Hall (right downtown and near public transit). To register for any of them, email BACPoutreach@cityofchicago.org or call 312.744.2086.

City Inspections – Ask Questions, Get Answers
Wed, February 5, 3:00 PM – 4:30 PM
City Hall, 121 N. LaSalle St. – 8th Floor, Room 805
Presented by the City of Chicago
To operate a successful business in Chicago you need to know what it takes to maintain compliance. Officials from several City departments will provide insight on how to operate safely, stay compliant, help prepare for inspections and highlight the do’s and don’ts of operating a business.

Construction Project Management
Fri, February 7, 9:30 AM – 11:00 AM
City Hall, 121 N. LaSalle Street – 11th Floor, Room 1103
Presented by City of Chicago Department of Business Affairs & Consumer Protection (BACP) and Department of Planning & Development (DPD)
Working with design and construction professionals to make your business dream a reality takes smart planning and organization. Learn the best practices for establishing your schedule and budget, hiring the right professionals and dealing with unforeseen challenges to ensure your project is completed on-time and on-budget.    

NO WORKSHOP DUE TO HOLIDAY
2020-02-12

Speak Up and Speak Out: Public Speaking Training for Small Business Owners
Fri, February 14, 9:30 AM – 11:00 AM
City Hall, 121 N. LaSalle Street – 11th Floor, Room 1103
Presented by Michele Williams MSW, MA, Public Speaking Consultant and Columbia College Speech Instructor
You have started or plan to start your own business. You know you have something special to offer but does the rest of the world? Whether it’s giving an elevator pitch, hiring staff, giving a community lecture, talking to a loan officer, or speaking at a National Conference knowing the basics of public speaking will enhance your ability to confidently speak up and speak out. Your speaker Michele Williams has been adjunct faculty at Columbia College for over 32 years and is a public speaking consultant. She has helped over 1,000 people become more confident public speakers. Topics include: choosing topics, types of speeches, organizing the speech, dealing with fear, relaxation, non verbal communication, relating to the audience, use of language and creating new opportunities. 

How to Obtain a Sidewalk Café Permit
Wed, February 19, 3:00 PM – 4:30 PM
City Hall, 121 N. LaSalle St. – 8th Floor, Room 805
Presented by the City of Chicago Department of Business Affairs & Consumer Protection (BACP), Public Way Use (PWU) Unit, Anthony Bertuca
Come learn about the Sidewalk Café Permit Application process by attending this informative workshop.  We will explain the application process, inform you of all the requirements, and help you get prepared to submit an application.  The entire application process may take up to 30 days and the 2020 Sidewalk Cafés Season begins on March 1st.

Choosing the Right Legal Entity: A Small Business Entity Workshop
Fri, February 21, 9:30 AM – 11:00 AM
City Hall, 121 N. LaSalle Street – 11th Floor, Room 1103
Presented by Chicago Lawyers’ Committee for Civil Rights (CLC)
As an entrepreneur starting a new business, you will be faced with many important decisions; one of the first and most important decisions will be selecting the right legal structure for your business. The legal entity you choose will impact many critical aspects of your business, such as your ability to raise capital, how your company will be managed, its tax treatment, liability protection for managers and more. At “Choosing the Right Legal Entity: A Small Business Entity Workshop”, CLC equitable development and small business attorney, Akele Parnell, will discuss the advantages and disadvantages of various business structures including the Sole Proprietorship, C-Corp, S-Corp, LLC, Benefit Corporation, Cooperative Association and more.  

What You Need to Know About Your Business & Taxes
Wed, February 26, 3:00 PM – 4:30 PM
City Hall, 121 N. LaSalle St. – 8th Floor, Room 805
Presented by the Internal Revenue Service (IRS) and Ladder Up
This workshop will answer important tax questions for your business including: Are you required to file a tax return? Is your worker an independent contractor or an employee? What will the IRS request during an audit? Are you required to make estimated tax payments? What resources does the IRS have for small business owners?

Digital Mindset for Growth 101
Fri, February 28, 9:30 AM – 11:30 AM
City Hall, 121 N. LaSalle Street – 11th Floor, Room 1103
Presented by Grow With Google #GoogleDigitalCoaches with JinJa Birkenbeuel 
Learn how to change your mindset from analog to digital by translating your entrepreneurial dreams into online action for your brand and your business. We will give guidance on how to create goal-based strategies for your business that will help it become more “discoverable’ and recognized online so you can connect with customers. We will touch on creative branding, social media, YouTube and content strategies. Come ready with your mobile phone to work and learn!

To register for a workshop, email BACPoutreach@cityofchicago.org or call 312.744.2086.

Also, in case you weren’t aware, BACP offers a Business Start-Up Certificate Program, designed to give business owners the essential elements in starting and growing a business. Attend nine workshops at BACP and learn the essentials of business planning, financing, marketing, legal issues, technology and more. Complete the program workshops within six months and earn your certificate, as well as get free advice on your business plan. You can register for the Business Start-Up Certificate Program at any BACP workshop. Learn about the full set of BACP offerings here.

And visit their Business Video Library here.

Source: City of Chicago :: Business Education Workshop Calendar

Tips

Benefits of Outsourcing Accounting Work

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Nice, short, to-the-point article in Accounting Web this week that I wanted to share encouraging folks to outsource their accounting function.

Accounting and finance are often among the first set of duties to be outsourced. These tasks, which require considerable attention to detail and expertise, can help businesses protect themselves from financial and legal hazards while also finding creative methods to improve their bottom line. An outsourced accountant can help your business organize (or reorganize) your books, prepare its taxes, generate long-term financial projections, establish an eCommerce platform and much more.

They illustrate how opportunity costs should factor into your decision, using a simplified example:

Suppose that your business’ accounting responsibilities require 100 hours of work per month. If you consider each hour of work to be worth $40 (or whatever number you deem fit), this means your business’ total accounting costs will amount to $4,000 per month ($48,000 per year). However, if your business could generate $50 worth of revenue for every operational hour that it gains, this means you are missing out on $5,000 per month ($60,000 per year) in positive cash flows.

They do a nice job of outlining the benefits to outsourcing as well:

  1. Cost-effective
  2. Access to expertise
  3. Access to new systems, structures & technologies

In fact, according to Deloitte, two of the most common reasons for outsourcing include improved performance (62 percent) and reduced errors (53 percent). Because only a fraction of business owners have accounting or financial experience, these functions are often among the first to be outsourced.

Source: Benefits of Outsourcing Accounting Work

IRS, Tips

IRS Confirms Tax Treatment Of Virtual Currency Charitable Donations

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Big news from the IRS that we’ve been waiting on for a while — how will charitable donations of virtual currency be treated for tax purposes? Forbes summarizes things for us:

The Internal Revenue Service (IRS) has issued guidance for donors (and charities) on the FAQ page of its website. The IRS addressed whether gifting virtual currency to a charity could result in income, gain, or loss. The IRS confirmed that if you donate virtual currency to a charitable organization, you will not recognize income, gain, or loss from the donation. That’s the same result as giving stock or other appreciated assets, which are also characterized as capital assets.

The IRS also explained how to calculate the value of a gift of virtual currency to a charity; addressed the charity’s responsibilities for gifts of virtual currency; and reviewed charity reporting requirements to the IRS.

Also a reminder that back in 2014, the IRS clarified that virtual currency is treated as a capital asset, provided it is convertible into cash.

More here: IRS Confirms Tax Treatment Of Virtual Currency Charitable Donations – Forbes

Illinois, IRS, Tips

How to Pay Quarterly Estimated Taxes Online – IRS & IL DoR

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UPDATED 12/31/2021: Due to a new law, Illinois S-Corps and Partnerships should generally now pay quarterly IL state (not federal) taxes through the business, rather than personally. This post below is about how to pay IRS and IL taxes personally; here’s how to make IL business tax payments.

There are multiple options for paying personal quarterly estimated taxes. You can a) have your tax preparer create vouchers for you, that you then print and mail with a check; b) prepare your own vouchers for the IRS and IL DoR; c) pay online.

As of March 2020, federal and state agencies and the Postal Service are having so many challenges with paper-mailed checks and vouchers that we are encouraging everyone to make any tax payments online.

If you want to pay online, the easiest way to do this is to use IRS Direct Pay and IDOR MyTaxIllinois. Paying online offers confirmation that the payment made it to the agency, reducing the chance of issues down the road, especially if the check is lost in the mail or routed incorrectly in the processing department. It also allows taxpayers to be very clear about what type of tax and tax period are being submitted, again eliminating confusion on the part of the agency and preventing future problems.

If you are paying online, I recommend making payments one day before the due dates, as sometimes it takes overnight for the agencies’ systems to process payments. The funds are usually pulled from your bank account the same day or one day later, so there is very little wiggle room.

You do not have to have an account with either the IRS or IL DoR in order to make payments using these methods.

Internal Revenue Service (IRS)

For the IRS, once you get to the site, select the following options (noted in the screen shot below) — 1) the reason for the payment, 2) the form you would be mailing in if you weren’t doing this online, and 3) the year to which the payment should apply… for example, for 4th-quarter 2019 personal estimated taxes, you’d select the following:

Settings for IRS Direct Pay

Here’s a nice little video that walks you through the process of verifying your identity.

Illinois Department of Revenue (IDOR)

For the IDOR, go to the MyTax Illinois site (if you already have an account for sales taxes or another reason — do not log in, unless you are making business tax payments), and then click the “> Make an IL-1040, IL-1040-ES, or IL-505-I payment” link (see print screen below).

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Then follow the instructions for making a quarterly estimated tax payment; it will make you enter your personal information (SSN, etc.) and ask you what kind of tax payment you wish to make.

It may require you to enter your driver’s license information or your AGI from a past tax return to confirm identity and get your IL-PIN.

Then it will take you to a Payment Information page.

You’ll want to select “IL-1040 Estimated Payment” and enter your tax year. Make sure it’s for the correct year and quarter — this is very important. The example below is for the fourth quarter of 2021.

Then, enter your payment information and click the Submit button.

It will require you to enter and confirm your email address before clicking OK.

Make sure to print the confirmation screen, even though they will send you an email receipt — every once-in-a-while IDOR fails to push the request through, and the amount is not debited or recorded. If you have the print-screen, you can prove you attempted to pay it on-time and that the mistake was theirs.

It will also include a confirmation code, the date/time of the request, the reporting period and amount, and bank withdrawal information. You can click “Printable Confirmation” or just print the webpage to pdf.

Please make sure to note how much you paid to each agency and on which dates — and let your tax preparer know this information as well. Securely uploading copies of the final confirmation screen to your tax preparer or bookkeeper is a great practice, so they can easily store the info in your file.

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.