IRS Increases Standard Mileage Rates for 2013 |  |
- IRS Increases Standard Mileage Rates for 2013
- Top Tax Trends For 2013
- Your End of Year Legal Checklist
- 15+ Places to Promote Your Blog On The Web
- Starbucks, Other Multinationals Face UK Tax Backlash
| IRS Increases Standard Mileage Rates for 2013 Posted: 04 Dec 2012 01:00 PM PST The IRS just released its standard mileage rates for 2013, which show slight increases from the current 2012 rates. These rates are made available so that employees, self-employed individuals, and other taxpayers can calculate their tax-deductible transportation costs for business, charitable, medical or moving purposes. The 2013 standard mileage rates are set at 56.5 cents per mile for business transportation or travel, 24 cents per mile for medical care, and 14 cents per mile for charity purposes. The 2012 rates are 55.5 cents per mile for business transportation or travel, 23 cents per mile for medical care, and the rate for charity purposes stayed the same at 14 cents per mile. The new rates will take effect on January 1, 2013. These rates don't necessarily reflect what a company has to pay their employees for these types of errands. However, employees and self-employed workers can use these numbers to calculate their approximate transportation costs and deduct them for tax purposes. As always, taxpayers can choose to calculate the actual costs of using their vehicle for these purposes and deduct that amount rather than using the IRS's standard mileage rates. For businesses that reimburse their employees for transportation costs, rates can be lower than the IRS's standard mileage rates, and then employees can simply deduct the difference. The only way companies can pay their employees more than the standard rates is if the actual costs add up to more than those rates and the employee provides records of those costs. Additional items such as tolls and parking can be taken into account when calculating the actual cost of transportation. The standard rates usually stay the same throughout the year, but in 2011 the IRS updated the business travel rates mid-year to reflect the increase in gas prices. The standard mileage rates are based on an annual study of both fixed and variable automobile transportation costs. The post IRS Increases Standard Mileage Rates for 2013 appeared first on Small Business Trends.      |
| Posted: 04 Dec 2012 11:00 AM PST In 2012, taxes made headlines and it is likely that taxes will continue to be at the forefront in 2013. Congress needs to act on many measures impacting small businesses. The IRS is in gear to continue or initiate a number of programs impacting small businesses. Here are some trends to watch for in 2013. 1. Uncertainty About Tax Rules Could Linger Congress continues to debate the fate of a number of expired or expiring tax rules impacting individuals and businesses. The tax rules for 2013 are anything but certain now and "taxmageddon" (an overall tax increase of about half a trillion dollars) is still a threat; this status could continue into 2013 unless there is a solution in Congress by December 31, 2012. The income tax rates on individuals (the rates that apply to sole proprietors, partners, limited liability company members, and S corporation shareholders) for 2013 are unknown. It is possible that current rates could be retained for every other than "high-income taxpayers," defined by President Obama as singles with income over $200,000 and joint filers with income over $250,000. Another possibility is the extension of current rates for 2013, with the expectation that Congress will find a permanent solution to tax rates during 2013 that will start in 2014. 2. Affordable Care Act Rules Will Come Into Focus The Patient Protection and Affordable Care Act ("Obamacare") was enacted in 2010 and does not impose the mandate on individuals and large businesses for health coverage until 2014. However, the impact of the law will start to be felt tax-wise in 2013. This is because two additional Medicare taxes come into play:
3. The Corporate Tax Rate And Regime Could Change As recognition of the global economy increases, the current rules for taxation of C corporations could be revised in one or two ways:
4. The IRS Will Look Closely at Write-Offs for Company Vehicles In 2012, the National Research Program concluded a three-year project on employment tax compliance. It is now focusing on the findings. Already, the project has revealed companies are not reporting, either properly or at all, employee use of company vehicles. The IRS has indicated that it will look closely at reporting of and tax deductions claimed for the use of company vehicles. 5. Retirement Plans Will Come Under Greater Scrutiny In 2011, the Department of Labor's Employee Benefits Security Administration (EBSA) added 1,000 employees to conduct audits of qualified retirement plans. Noncompliance with tax rules can result in steep penalties on these plans. Their efforts in 2012 produced significant results. Expect to see audit activities increase, especially among smaller plans, including solo 401(k)s. These audits will likely focus on whether contributions were made on time and required 5500 forms were filed. 6 .Same-Sex Married Couple’s Tax Status Will Be Settled Two federal appeals courts have struck down the federal Defense of Marriage Act (DOMA), paving the way for the U.S. Supreme Court to decide whether the federal ban on same-sex marriages is constitutional. Many expect the high court to decide the issue in its current term, which means there will be a decision by June 2013. What does this means to business? If the Court says that same-sex married persons should be entitled to the same treatment as heterosexual couples, then all benefits programs will have to be revised to offer the same coverage for spouses of employees who are of the same sex. This will affect qualified retirement plans, education assistance programs, and other fringe benefit options. The resulting expansion of coverage will increase the cost for companies to some degree and could lead to changes in benefits that are offered. 7. Security Concerns Will Mount Tax information has traditionally been one of the areas in which privacy has been absolute. However, with the unrelenting growth of identity theft, there is an increased concern about the protection of tax information. Christopher J. Lee, senior attorney, National Taxpayer Advocate Service, said on October 25, that the IRS would issue identity protection personal identification numbers (IP PINs) to about 500,000 individuals for the 2013 filing season. This is double the number in the 2012 filing season. The PINs are computer-generated numbers issued to taxpayers who may have had their Social Security number and tax information co-opted by identity thieves. 8. There Could Be A Shift From S to C Corporations Many small businesses are set up as S corporations to avoid the double taxation associated with being C corporations. In 2013, that preference may change because of the opportunity for equity crowdfunding (offering small ownership interests to investors via an online platform). Under the Jumpstart Our Businesses (JOBS) Act passed in the spring of 2012, corporations will be able to raise money from small investors up to $1 million without the cost and complexity of going public. Rules from the Securities and Exchange Commission (SEC) on equity crowdfunding are expected to enable capital raising to begin in early 2013. Because S corporations have a 100-shareholder limit, C corporations may become the entity of choice. 9. Worker Classification Continues To Be A Focal Point The IRS, the Department of Labor, the National Labor Relations Board, and state agencies will continue to direct attention to proper worker classification. Some companies treat workers as independent contractors rather than employees as a way to avoid paying employment taxes and benefits (it saves an estimated 30% to classify workers as contractors rather than as employees). The government does not like this when classification fails to reflect the actual work arrangement; it loses money. 10. The IRS May Move To “Real Time” Audits If you file a tax return today, the IRS usually has three years in which to initiate an audit. The delay in auditing results from the time needed to match information provided to the IRS, such as earnings reported on Form 1099-MISCs, Payment Card and Third Party Network Transactions, with the earnings reported on taxpayer returns. Under a real-time system, information would be provided electronically to the IRS before tax returns are filed, enabling the government to match information as returns come in. Since most returns (more than 80%) are filed electronically, matching can be easily automated. Former IRS Commissioner Doug Shulman, addressing the American Bar Association in September, expressed hopes that shifting to a real-time system could be done soon. All that is needed is for Congress to approve the measure. 11. The IRS Will Launch A New Information-Matching Program After 2012 returns have been filed in 2013, the IRS intends to start a pilot program for matching receipts reported on Form 1099-K, with income reported by businesses on Schedule C of Form 1040, Form 1065 (for partnerships and LLCs), Form 1120 (for C corporations), and Form 1120S (for S corporations). Company Vehicle Photo via Shutterstock The post Top Tax Trends For 2013 appeared first on Small Business Trends.     |
| Your End of Year Legal Checklist Posted: 04 Dec 2012 08:00 AM PST We're entering the home stretch of 2012. The next two months are hectic for everyone, but particularly for small business owners. While it's easy to become overwhelmed with end of the year sales (not to mention holiday planning and parties), business owners should take some time to make sure their business is "legally fit" for 2013. After all, what better gift could you give your business than a fresh start for the New Year? Here's a checklist of legal aspects for small businesses to consider before the calendar hits 2013: 1. Incorporate or Change Your Business Structure Many small businesses start out as sole proprietorships or partnerships, but then eventually transition to another entity. For example, if your business is not incorporated, you may want to consider incorporating (either as a C Corp, S Corp, or LLC) to shelter you from some financial risk and possibly give you more flexibility when it comes to taxes. Discuss the different legal entities with your CPA, so you can determine the right entity for your situation and the right time to make the change. You can look into a "delayed filing" option with a document-filing company. This means that you can get all of your paperwork submitted now and it will be held and filed on the first business day of 2013, allowing you to start fresh next year. This will simplify your paperwork and tax filings, as your business will have the same business structure for the whole year. 2. Close an Inactive Business Did you start a business a few years ago, but it's no longer operating? Even if you're not actively promoting the business and it has no revenue, you still need to file a formal termination of that LLC or Corporation. Otherwise, you will be charged fees associated with the business, you'll still be expected to file an annual report, and you'll still need to submit tax returns to the IRS and state. If you have an inactive business, you should file an “Articles of Dissolution” or “Certificate of Termination” document with the Secretary of State where your Inc. or LLC was formed. In most cases, you’ll need to settle any owed taxes before you can do this. You should also cancel any kind of permit or licenses you hold with the state or county. Again, make sure to take care of these matters while it’s still 2012. There’s simply no reason to pay an extra cent in fees toward a business you've essentially retired – there's a lot more you can do with that money! 3. Hold An Annual Meeting For Your Corporation or LLC If you've gone through the work to incorporate your business, make sure you keep it in good standing. Keeping good corporate books is a frequently overlooked corporate activity. The end of the year is a good time to hold your annual meeting for your Corporation or LLC. Along with the meeting, you'll need to generate written minutes/resolutions to be signed by the shareholders (Corporation) or members (LLC). 4. File "Articles of Amendment" for Any Changes If you made any changes to your Corporation or LLC ? for example, you changed your business address, authorized more shares, or a board member left ? you'll need to file an official notification with your state of incorporation. In most states, this paperwork is known as "Articles of Amendment." While this type of paperwork may seem pretty trivial, it's critical to keeping your LLC or Corporation in good standing (and thus protecting your personal assets). 5. Review Your Estimated Tax Payments For 2012 Now that we're nearing the end point for 2012, review what your business has made year to date and assess your estimated tax payments to avoid underpayments or overpayments. You'll want to adjust your final 2012 payment (due Jan 15th) as needed. 6. Tie Up Any Loose Ends The next two months are a perfect opportunity to tie up any loose ends you've been putting off throughout the year. For example, does your business need a Fictitious Business Name (or DBA)? Did you get a Tax ID number (Employer ID Number)? Are all your necessary licenses and permits in order? The next few months will be busy, but set aside some time to take care of your business' legal and administrative activities. By addressing certain issues in 2012, you might be able to save money in fees, taxes, and penalties moving forward. And in other cases, you'll be preparing your business for a fresh start in 2013! Business Fitness Photo via Shutterstock The post Your End of Year Legal Checklist appeared first on Small Business Trends.     |
| 15+ Places to Promote Your Blog On The Web Posted: 04 Dec 2012 05:00 AM PST No matter how good your content is, earning a regular readership requires promoting your blog to audiences who would find it useful. And that means doing some legwork to promote your blog in as many different mediums as you can to help readers find it. As a blogging business, where should you be promoting your blog to help connect with readers and help them fall in love with your content? Below are a few places to start.
Above are just a sampling of places to help you scratch the surface. How do you make sure your blog gets seen? The post 15+ Places to Promote Your Blog On The Web appeared first on Small Business Trends.     |
| Starbucks, Other Multinationals Face UK Tax Backlash Posted: 04 Dec 2012 02:30 AM PST Starbucks and other multinationals including Google and Amazon have incurred the wrath of lawmakers and the media in the UK and some other European nations for allegedly not paying their fair share of taxes for profits made in those countries. While Starbucks and other firms say they’ve obeyed the law, their predicament illustrates the issues faced by companies large and small when expanding internationally. As Starbucks seems to be rethinking its tax position in the face of continued bad publicity abroad, it’s a good reminder for all business owners to be mindful of public feedback and how it can impact a brand. Poor ImpressionsTax troubles jolt coffee seller. The specific issue for Starbucks centers on a report that claims the coffee seller has paid only 8.6 million pounds in taxes in Britain since 1998 and no corporate or income tax over the past three years. Over the same period, the report suggests the coffee retailer sold over 3.1 billion pounds worth of coffee. Starbucks claims it followed UK law. Expanding into international markets means conforming to complex sets of regulations, and failing to comply with the letter or spirit of the law can damage your brand or worse. Reuters Starbucks bows to public pressure. Running afoul of norms and even customs in international markets can cause big problems for your brand. As Starbucks appears to be discovering in the U.K., businesses ignore these local rules at their own risk and can raise the ire of authorities and even their customers by refusing to comply. Doing business means being a part of a community, and businesses that expand internationally may be part of multiple communities at once. Being perceived as ignoring the norms of that community can have negative results. Scotsman.com Big DreamsStartups prepare for global conquest. Companies interested in going international should plan for such expansion from day one. Don’t wait for the moment when expansion seems right to start thinking about it. If you are starting a business and believe there is any chance that business will expand internationally, you will want to take a few steps right from the start to pave the way, says startup guru Martin Zwilling. Here are some very important considerations for those who are starting a business they believe could be destined for world fame. Startup Professionals Musings Things to know before you grow. Whether you planned to expand into international markets from the day you started your company or not, some businesses in their very early stages realize expansion into new markets is important for their growth. You no longer need to be a multinational conglomerate to enter international markets, that’s true. But careful planning is the best way to make sure your expansion is a success. In this guest post, Blaine Pike, UK community manager for OmniJoin Web conferencing explains the important steps to consider. The Savvy Copywriter How to make your exit. No matter how successful your international business becomes, the time may arrive when you think about selling. Understanding what’s at stake with an international business, whether large or small, can take special knowledge. Here’s an interview with Ian Shearer, Director of Mergers and Acquisitions at Atlanta International, an Ireland-based mergers and acquisitions company focused on technology businesses. Companies like Atlanta International are helpful for international companies when the time comes to move on. Tweak Your Biz Better Customer RelationsTips for focus on feedback. A critical method of avoiding problems as your business expands, either around the world or up the street, is to get customer feedback every inch of the way. Here Daniel Kehrer suggests six customer feedback essentials every business owner should consider to make sure they’re taking the pulse of their community accurately. Without customers you would have no business, so identifying sentiments about your product or service earlier rather than later is critical. Here are some ways to do it right. BizBest Collect your customers’ thoughts. Being open to customer feedback is one thing, but waiting for a complaint or scrap of praise to come your way may not be the best approach. Identifying what you’ve done right and wrong can help you make changes to your business and be more responsive to customer needs. So if you want to know how to pick your customers’ brains to learn more about their thoughts and opinions, Mike Abasov has some great suggestions on how to go about it. Have fun! Marketing Before Funding The post Starbucks, Other Multinationals Face UK Tax Backlash appeared first on Small Business Trends.     |
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