Volume 2 | Issue 10

October 2010

Dear Mark,

Have you noticed the slower the economy gets the harder and smarter you have to work? It doesn't always seem fair that all of your hard work is not immediately rewarded. As a small business owner, personal investor, or even as an employee we have to remember the mid-to-long-term. We have to plant the seeds today to reap the harvest later. A farmer does not simply plant the seeds and walk away, but the farmer continues to care for the plants by fertilizing, watering and weeding. To survive and thrive in this economy we need to be farmers of our businesses, investments and careers. What seeds are you planting today to reap your harvest in the future?

Best wishes,

Mark Wyssbrod, CPA

Planting the Seeds For the Future

Three Ways to Increase your Financial Harvest

What seeds are you planting today to reap your harvest in the future? We need to remember the overall economy is growing! Although the environment for most small businesses is still extremely volatile and challenging; believe it or not, opportunities abound! Unfortunately, most small business owners' attitudes don't allow them to see these opportunities. They are stuck in the "good 'ol day" mindset when it was comparatively easy. Small business owners need to regroup and develop a strategy for the future. Here are a few seeds you can plant today:

Seed #1 - Review and Revise Your Business Plan: The business plan and model you had 5 years ago or even just 6 months ago may need to be updated for your current economic climate. Your plan should just not prepare you for your current business position, but should incorporate a flexible plan for were you want your business to be in the future. Don't forget to be flexible with your mindset and focus on execution!
Seed #2 - Create a Board of Advisors: Everyone needs to be held accountable. A common problem among small business owners is that they don't like to ask for input from others before executing on an idea. A board of advisors can help you identify strengths, weaknesses and opportunities. Then your board can assist you in crafting your strategy and action plans.
Seed #3 - Review Your Operations Effectiveness: Here are some questions you should ask yourself. Are you still preparing your service or manufacturing your products the same way? Is your way the most effective and efficient way? What can you do to save time, energy and resources without losing any value or quality? A small difference can have a large impact on your bottom line. For example, if you have revenue of $1,000,000 and you can improve you margins by 1% you have increased your gross profit by $10,000. Every 1% improvement is another $10,000! What is your 1% change?

Most seeds you can plant are cost efficient. To assist with these and more personalized ideas for your business please contact us today. As a part of your business team we want to help you plant your business seeds today so you can reap your profit harvest in the future.

Deadline Reminder

Important Dates to Remember

October 15 - Final individual tax return filing deadline for 2009
October 20 - Georgia sales tax returns are due
October 31 - 3rd quarter payroll tax returns are due
December 31 - S-corporation shareholders (owner of 2% or more) must report their employee benefits in their W-2 (i.e. health insurance, dental insurance, HSA contributions, etc.)
December 31 - Deadline to set up SEP, 401(k) and other retirement plans. You may need to fund the plans by this date as well

Do You Conduct Business Across State Lines?

Be Mindful of Tax Laws in Other States

Are you registered in the states you are doing business in? Each state has its own nexus rules with who is required to register with the Secretary of State or Department of Revenue (its equivalent) or both.

For example, if your corporation was created in Delaware and doing business in Georgia you would have to register with Georgia's Secretary of State as a "foreign" corporation. Foreign in this case means any corporation which was not created in the state in which it is doing business.

Nexus issues are becoming a priority to a lot of the Department of Revenue audit divisions since they believe many taxpayers are not reporting income taxes on income earned in their state. For example, California, Illinois, New Jersey and New York have major budget shortfalls and have begun searching for businesses who should be reporting in their state, but are not.

Action steps you can take:

Review nexus rules for each state you are conducting business in
- Where are the employees, offices, fixed assets and inventory of the business located?
- What are the teleworking laws in the states you are non-physically located in, but providing services to?
Register with the Secretary of State for each you are required
Register with the Department of Revenue (or its equivalent) when applicable
File the required tax forms for each state

Please contact us should you have any questions regarding which states you should register and file in.

IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein