Archive for April, 2009
As President Obama recently pointed out, the Small Business Administration (SBA) is on track to back only about half as many loans in 2009 as it did last year. The proof is in the numbers as the agency’s lending data for the first quarter shows some major drops.
The SBA backed $1.59 billion worth of loans in the three months ending March 31, a 47% drop from the same quarter last year. The total number of loans made through the 7(a) program was 8,278, down from more than 19,000 issued a year ago. In the first half of its 2009 fiscal year, the SBA’s total 7(a) loan volume was $3.5 billion, down from the $6.2 billion lent in the first half of last year.
What the numbers bear out is the fact that small businesses are fighting a lot of opposing forces when it comes to seeking a loan. Stiff collateral requirements and other restrictions have put SBA loans out of reach for many entrepreneurs. Banks are also clamping down on alternative small business funding channels like credit cards, credit lines and non-SBA loans. The credit crunch has delivered a major blow to small businesses. But while the outlook may seem grim, there’s still hope for entrepreneurs out there.
President Obama’s stimulus provisions were recently enacted and include temporarily waiving fees for the SBA’s loan programs and increasing – as much as 90% – the portion of each loan it will insure against default.
Also, small business concepts and franchises like Instant Tax Service, among others, have taken matters into their own hands when it comes to financing new franchisees. Remember, when you own a franchise you may be going into business for yourself – but you won’t be in business alone.
For qualified candidates worried about their initial investment, Instant Tax Service offers financing options to get started. In addition, Instant Tax Service can also provide a line of credit through its online supply store with tax season- friendly net terms.
Through programs just like this, the average third-year income tax franchisee is thirty-six years old and started franchising with Instant Tax Service on an initial investment of less than $50,000. Most franchisees had no initial experience in income tax preparation or the income tax franchise business, but Instant Tax Service provided all the tools, training, and resources they needed to open an entrepreneurial small business.
In the end, there isn’t one silver bullet that will solve the funding crunch, but progressive lending programs by companies like Instant Tax Service are paving the way for small business success in the current economy.
If you’re interested in learning a more about what it takes to become an independent business owner as part of Entrepreneur magazine’s # 1 New Franchise, #1 Low Cost Franchise and the #3 Fastest Growing Franchise, please click here.
It can be tempting for small business owners to put the whole issue of taxes behind them once they’ve filed their income tax returns…
But if you want to minimize your business taxes, make tax planning a year-round event! In the current economy, falling asleep at the financial wheel could cost you big come next tax season. Don’t miss out on critical tax law changes. Staying on top of what happening could help your business get through the recession just a little bit faster.
Sometimes it’s hard to keep your eyes fixed on the bottom line and pay attention to new tax laws and economic stimulus legislation. That’s why the IRS created the IRS’ Small Business and Self Employed Tax Center to keep tabs on the latest developments.
For example, in this year alone:
- Companies that incur net operating losses can carry those back five years instead of the usual two, applying those losses against taxes paid in the past and obtaining refunds.
- When making estimated tax payments, businesses are required to pay only 90 percent of their previous year’s taxes, down from the usual 110 percent.
- The sharply higher deductions for new equipment purchases enacted for 2008 are being extended into 2009. One of these provisions is the Section 179 deduction, which allows small businesses to deduct upfront the cost of equipment such as computers, furniture, manufacturing machines and vehicles, up to $250,000. The second is the bonus depreciation measure that increases the portion of a purchase price that can be deducted for the first year.
Given the flux in the economy and the inevitable tax changes that will come as a result, it’s critical that small business owners are on top of what’s going on in the tax world. So keep updated on those tax changes! You’ll be glad you did come tax time.
The Problem
Over the past few decades, the floor has been slowly eroding beneath middle-class families. Today, far too many are faced with challenges that seem insurmountable – from paying medical bills to putting kids through college. Simultaneously, many Americans have experienced job loss and tumbled into poverty.
In an effort to provide an estimated 150 million workers with the tax relief they need to tackle these problems, the Obama administration has recently made changes to the tax code to increase most workers’ net pay.
Beginning this month, many workers have started seeing small additions to their paychecks thanks to the new “Making Work Pay” tax credit.
How does it work? Read on.
How it Works
In 2009 and 2010, the “Making Work Pay” provision in the American Recovery and Reinvestment Act will provide a credit of 6.2 percent of earned income, up to $400 per person per year. That means a married couple can get up to $800 total, even if only one person works. The credit is phased out for taxpayers with adjusted gross incomes in excess of $75,000 and is zero for those earning more than $95,000. For couples filing jointly, the sliding scale begins at $150,000 and ends at $190,000. Remember that this is not a lump sum payment – eligible taxpayers will receive this credit gradually directly from their paychecks.
If you are eligible to receive the credit, you typically won’t have to do anything to receive it. The IRS has already asked employers to handle the new credit through automated withholding charges in your paycheck. If you’re self employed, you can still get the credit (if you’re eligible) by reducing your estimated tax payments or claiming it when you file your 2009 tax return.
Some Things to Note
While many will be receiving fatter paychecks through the end of 2010, if you’re receiving social security payments or pension benefits, you’ll get a $250 payment this spring instead of the yearlong tax credit.
Additionally, if you have two jobs and your employers are both paying you the full tax credit, you may owe money next tax season! To avoid this sticky situation, make sure your employers are withholding the right amount.
How to Find More Information
Remember, it’s not necessary to submit a Form W-4 to get the automatic withholding change. However, if you have multiple jobs or you’re a married couple whose combined income places it in a higher tax bracket should consult the IRS withholding calculator and, if necessary, submit a revised Form W-4 to ensure enough tax is withheld. The IRS’ Publication 919 also provides additional guidance for tax withholding including a special “Making Work Pay” worksheet.
Tax Day is here! Today is the day where procrastinators scramble, post offices stay open till midnight and we’re working around the clock to make sure you either file on time or get an extension.
With over 1,200 offices in 35 states, Instant Tax Service specializes in professional tax preparation, and many locations will be open late tonight to help you either file your taxes or get an extension. To find the nearest Instant Tax Service center to you, pleaseclick here.
The countdown is on, and there are just a few precious hours left until today’s tax deadline. Here are some tips for all you procrastinators:
- If you need to file for an extension, it’s a good idea to send an estimated payment… or face potential interest and late filing penalties.
- Beware of scammers. Too many people are taken advantage of in these last few hours before the tax deadline. The IRS does not send emails or make phone calls requesting personal or tax information from individuals. Do not give out your personal information unless you’re dealing with your tax preparation professional or accountant.
- Consider e-filing at this point to avoid the lines and aggravation of getting to the post office on time.
- Make sure you sign your returns in the right place. A tax return is like a check. It’s not valid unless it’s signed.
To make sure you don’t make any of these last minute mistakes, visit the closestInstant Tax Service to you. Our experienced income tax professionals will ensure that you receive the maximum refund you’re entitled to… just when you need it most. And with ourTriple Guarantee, there’s no better time to get professional tax services from your local tax experts!
April 15th is almost here… are your taxes done? Or do you need to file a tax extension?
You can ask the IRS for more time. In fact, about 10 million people a year file for a tax extension, so you’re not alone.
Get an extra 6 month extension on your tax deadline by filing Form 4868, Application for Automatic Extension of Time to File.
To file an extension, you have a couple options:
- You can file Form 4868 electronically using IRS e-file.
- You can file a paper Form 4868
If you’re out of the country, you can also get some leeway from the government and an extra two months to file your return without an extension. This rule applies to people whose primary job is based outside the U.S. (like contractors in the European Union, architects in New Zealand, and our servicemen and women overseas). Just keep in mind that this rule doesn’t apply to you if you’re sitting on beach in Bahamas on spring vacation!
If you do choose to file an extension, bear in mind that there are some potential consequences.
Interest: You’re going to owe it, no matter what the excuse is for filing late. The IRS has heard just about every story in the book, so be aware that there will be interest due on your late payment. Typically, you will be charged about a ½ percent to 1 percent each month that you don’t pay your taxes. The max penalty is 25 percent.
Late Penalty: If you wait until after April 15th to file anything, you’re going to be hit with a penalty, which is usually about 5 percent of what’s due each month that you are late. The max here is also 25 percent. The penalties for filing late are much harsher than the penalties for late payment. So go ahead and send in your 1040, even if you need to work out a payment schedule.
What’s important to keep in mind is that an extension of time to file is not an extension of time to pay. Most tax experts these days advise filing electronically, which is much quicker and easier. But if you are one of those old school types who like to have your paper return in your hand, many post offices will be open until midnight on April 15th to make sure you get that important postmark date.
To save you time and headache, you can also check out a local tax preparation service, who can prepare and file your taxes for you. At Instant Tax Service, we have a team of experts who can help you file your taxes quickly and painlessly – and on time! To find the nearest Instant Tax Service center to you, please click here.
Instant Tax Service founder and CEO, Fez Ogbazion, was interviewed in Business Opportunities magazine about the benefits and pitfalls of franchising in the tax industry.
Check it out!
In today’s current economic climate, acquiring new customers and retaining old ones presents a whole new set of challenges for small business owners. Today, customers are putting their limited dollars behind products they know and trust. Gone are the days when newspaper and window marketing was enough to get someone through the doors of your small business.
We’ve entered an era where personal connections and interactive marketing are key to small business success. In today’s small business world, you need to employ marketing tactics that bring your customers into direct contact with what you sell in a way that is positive, memorable and connects you to them on an emotional level.
Yes, despite all the changes in the ways consumers access and share information, the essence of marketing remains the same. Great marketers understand their customers’ needs and develop a plan to address those needs.
Below are some key marketing tips for small business owners:
Know Your Customer
When it comes to your customers, target marketing is essential. Only a select segment of the population is likely to purchase your products or service. By taking time to craft your sales pitch and marketing efforts to the right niche market, you’ll spend your marketing $$ and time in the most productive way.
Network
Get out from behind your desk and attend events in your area. Go to Chamber of Commerce meetings, entrepreneur group meetings, and other organizational meetings that will be attracting your “ideal” customer. Get business cards. Then phone and email your new contacts to follow up. If they can’t use your services, ask them if they know someone who can and get their contact information. Nobody likes being solicited, but lots of people enjoy giving recommendations to friends and acquaintances.
Create Good Materials
Build useful takeaways. These are the types of materials that recipients keep because they have value. At the very least, be sure your material includes your name, phone number, email address and website information. Remember that customers need to hear your marketing messages at least 7 times to influence a buying decision. Stay on budget and use multiple vehicles for delivery – from direct mail to public relations to man-on-the-street marketing.
Create joint-ventures
Find colleagues and other local businesses that compliment yours and do joint promotions. This will help reduce your marketing costs and allow you to tap into a database of potential customers you may have not reached otherwise.
