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Archives for March 2021

5 Legal Tips for Starting & Protecting a Small Business

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It has never been easier to start your own business. There are thousands of websites, services, and resources available online for you. But it’s important to protect your business as you grow. Here are 5 small business legal tips for starting and protecting your new business. Protect Your Personal Assets It’s extremely important to separate your business assets from your personal ones. 45% of businesses fold within the first five years of opening, and 65% in the first 10 years. This isn’t meant to discourage you, only to underscore the importance of making sure your personal assets are protected and separated from your business assets in the event of a closure. There are a few different ways to protect your personal assets. The first is to create an LLC or other legally-recognized business class. This limits the degree to which you, as the business owner, are liable for damages incurred by customers. This is the best way to protect your business in the event that a customer tries to sue you after a bad experience with your product or services. Another way to protect personal assets is to set up a separate bank account for your business finances. Even if you just have a small craft shop, or you only do business locally, it’s important to keep your personal finances and your business accounts separate in the event of theft, fraud, or a failing business. Check Trademarks & Copyrights Before you get too stuck on a business name, you should check to make sure the name doesn’t violate an existing business trademark. Business cards, websites, social media pages – all of these things need a legally legitimate name to be able to operate your business. Here’s how to find out if a business name is taken. It’s also important to apply for trademarks and copyrights to protect the integrity of your business. You don’t want another person or business with the same name creating confusion when potential customers are looking for your products or services. Use …

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4 Tips for Last-Minute Tax Filing

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2020 was crazy and 2021 is shaping up to be a very busy year. But one constant is the swiftness with which the tax filing deadline approaches. Here are some tips for last-minute tax filing. Beware of Common Errors So You Can Avoid Them In your rush to complete your taxes on time, it may be tempting to “skim” over your work so you can finish more quickly. But this rush, coupled with the new and updated tax programs that were put in place due to the coronavirus pandemic, means you will very likely make mistakes. Here are the most common mistakes to look out for: SSN Errors – One of the most important things to have correct on your tax forms are the names and Social Security Numbers for everyone on your tax return. Make sure to check the SSNs for yourself, your spouse, and any dependents. Incorrect Account Numbers – 8 out of 10 taxpayers get their refunds by direct deposit. If you get your refund direct deposited, it’s worth the time to make extra sure your bank account and routing numbers are error-free. Forgetting to Sign – Your returns are not valid unless they are signed. If you are filing jointly, make sure your spouse’s signature is there, too. File Electronically In a PDF titled “Tips to Help Last-Minute Taxpayers”, the IRS stresses the importance of filing electronically. This is a great way to complete your returns quickly, taking some of that deadline pressure off you. Double Check Your W-2 & 1099 Forms On February 9, the IRS published a news release urging taxpayers to double-check that they received their W-2 and 1099 forms. “With some areas seeing mail delays, the Internal Revenue Service reminds taxpayers to double-check to make sure they have all of their tax documents, including Forms W-2 and 1099, before filing a tax return.” In a typical year, you should receive the following forms near the end of January: W-2, 1099-MISC, 1099-INT, 1099-NEC (new this year), 1099-G. If you are missing forms, you can reach out via …

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6 Small Business Tax Credits

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In a previous blog article, we covered everything you need to know about tax deductions. Today, we’ll talk about small business tax credits and offer some tips for taking advantage What Is a Tax Credit? A tax credit is a dollar-for-dollar reduction. NerdWallet explains “A few credits are even refundable, which means that if you owe $250 in taxes but qualify for a $1,000 credit, you’ll get a check for $750.” This is different from a deduction, which is a dollar amount you can subtract from your adjusted gross income. There are two types of tax credits, according to the IRS: Nonrefundable: tax credits where you get a refund only up to the amount you owe Refundable: tax credits where you get a refund, even if it’s more than what you owe Let’s go through some tax credits for the self-employed, including a few that have emerged in response to the coronavirus pandemic. Earned Income Tax Credit (EITC) The Earned Income Tax Credit is determined by income and is designed to help low- to moderate-income workers and families lower their tax burdens. To qualify, you must be between the ages of 25 and 65, be filing as an individual or married filing jointly, and be considered a low-income filer. Small Business Healthcare Tax Credit The Small Business Healthcare Tax Credit offers up to 50% in credits for “costs paid for premiums purchased through the Small Business Health Options Program (SHOP) plan for ACA coverage,” according to Zenefits. This tax credit is for businesses with fewer than 25 employees whose average salary is $50,000 or less per year. American Opportunity & Lifetime Learning Credits The American Opportunity Tax Credit is a credit for “qualified education expenses paid for an eligible student for the first four years of higher education.” The maximum annual credit is $2,500 per eligible student, which includes people whose modified adjusted gross income is $80,000 or less ($160,000 for married couples filing …

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I Received a CP01H Notice, Now What?

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Have you received a CP01H Notice? In this article, we’ll discuss what that means and how to fix it. What is a CP01H Notice? If you receive a CPo1H notice, it means the IRS wasn’t able to process your tax return and they’ve placed a lock on your account because the Social Security Number of the primary or secondary taxpayer you provided on your tax return belongs to someone who was deceased before the current tax year. Here’s what that means for you and how you can fix it if the notice has been sent due to an error. Why Did I Receive a CP01H Notice? The CP01H Notice is generated after the SSN you submitted was compared to the records the Social Security Administration has for you. Once the IRS has determined the SSN on your tax forms is incorrect, they send you the notice and lock your account. This is done to prevent identity theft. This may be a simple keying error, where someone (you or your tax preparer) entered an incorrect Social Security Number for you or your spouse (if you are filing jointly) Find out more about 1099 filing penalties here. Next Steps: Correcting an Error If you think the IRS received records in error, the first step you should take is to contact the Social Security Administration to correct the information. Once the Social Security Administration has corrected the information, you’ll need to follow the instructions on your CP01H notice to file your tax return. Next Steps: Unlocking Your Account Your account is automatically locked when the IRS sends the CP01H Notice, which means you’ll have to take some steps to have it unlocked. Here is a list of all the things you will need to send to the same address of the IRS campus where you filed your return in order to unlock your account, according to the IRS itself: A copy of your CP01H Notice letter A written request to unlock the account A photocopy of any one of the following items: Passport Driver’s license Social Security Card Other valid …

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8 Small Business Cybersecurity Tips

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Many businesses had to rapidly implement technology solutions due to the pandemic. In this article, we’ll cover some basic tips for improving small business cybersecurity. Cybersecurity Threats Are on the Rise According to an article from Small Business Trends, reports of cyberattacks have increased more than 30% compared to this time last year. And businesses are at greater risk due to the growth in working from home, customer-facing services, and online cloud use. Here are some cybersecurity tips to help protect your business this year. Establish or Refine Security Protocols Establishing – and refining – your security protocols is an important step in creating and maintaining a consistent approach to cyber threats. Take some time to discuss your plans with an IT professional and then write them down, so you can share them with your business partners, employees, and any independent contractors who might be using your networks in the future. Forbes has a great list of things to think about when you’re working out the details. Assess and Address Your Weaknesses As you are creating or updating your cybersecurity program for your small or medium-sized business, start by assessing potential areas of weakness. Target the areas that will be best served by digital upgrades or new security technology or procedures.  Train Employees on How to Mitigate Risks Your employees are both an important line of defense and one of the largest potential risk areas when it comes to protecting your business against cyberattacks. Ensuring your employees are properly trained is even more important in this new era of working from home. The most vulnerable areas in this regard include employee email accounts and home wi-fi networks. Educate your associates on recognizing suspicious email activity and increasing the security measures – like implementing a more secure Wi-Fi password – at home. Improve Password Behaviors Speaking of passwords, it’s also wise to educate …

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