Our Two Cents

 

“You need to spend money to make money.” Whoever came up with that was probably in marketing, or should have been. Marketing is an investment that can offer significant returns. From brand development to influencer marketing to email campaigns, it’s a great way to differentiate your business in a crowded or competitive space.

 

Welcome to David in Taxland - a series of tax articles written for business owners. Spoilers: all income is taxable unless it’s not and the moral to the story is to pay and file your taxes on time.

Taxable income is cleverly defined by the IRS. Instead of making certain types of income taxable, and leaving the rest not taxable, it took an opposite position: all income is taxable—unless it’s not. The basic idea is this: any increase in wealth for a taxpayer (individual or business) is taxable unless the IRS provides a specific exclusion or deduction. Note: income can be cash or non-cash (such as fringe benefits).

Welcome to inDinero’s Pot of Gold. In this series, you’ll learn quick, actionable tips to protect and build your company’s capital and personal finances. Whether your “pot of gold” is figurative or literal, these tactics will better enable you to maximize your wealth.

Today we’re exploring a popular but often-misunderstood tax-saving strategy: travel expense deductions.

 

Welcome to inDinero’s Pot of Gold. In this series, you’ll learn quick, actionable tips to protect and build your company’s capital and personal finances. Whether your “pot of gold” is figurative or literal, these tactics will better enable you to maximize your wealth.

Today we’re looking at how taxpayers can maximize their retirement savings through a handy accounting maneuver known as the “backdoor Roth.”

 

As a small business owner, you might be worried when you find out how frequently small businesses fail. Especially when you read that according to the Small Business Administration, only about half of all businesses survive past the first five years.

Statistics like that can be troubling, but you shouldn’t let it deter you from your dream to start your own business. A wide range of factors can come into play when a business fails, and there is a lot you can do to protect your business. One thing every small business owner should do is to find out the different causes of small business failure so they can learn how to avoid them.

 

The Story of Nolan, an NOL and a Very Bad Haircut

Welcome to David in Taxland—a series of tax articles written for business owners. Spoilers: this article only considers C-corporations. Hint: don’t be like Nolan. Future articles will bring happier subjects, shorter articles and, of course, Al Capone.

Businesses are usually created for profit, but many operate at a loss in the early years. In Taxland, a business is profitable when it has more revenue than deductions. If it has more deductions than revenue, it’s operating at a net loss—it has a Net Operating Loss, an NOL. We call a C-corporation with an NOL a loss corporation.

Some companies are better equipped than others for growth. The difference can come down to something as seemingly simple as business structure—not leadership vision, not go-to-market strategy, but the details of an incorporation document. Specifically, we’re talking about the distinction between an LLC and a C corporation.

If you own a startup, chances are good your business is structured as an LLC (short for limited liability company). Chances are also good your business could benefit from converting to a C corporation (AKA “C corp”).

Your business needs money as soon as possible. Like, today. Maybe a big order just came in and you don’t have the necessary supplies to fulfill it. Perhaps a major customer payment hasn’t arrived on time, or a tax deadline is approaching, or an expensive piece of equipment just broke down.

Like getting struck by lightning or dying in a plane crash, an Internal Revenue Service audit is as terrifying as it is unlikely. The IRS audits fewer than 1% of taxpayers every year. Nonetheless, there is always a remote possibility you’ll receive a notice that your tax return has been selected for examination.

If you’re one of the (un)lucky ones, don’t panic. Take a deep breath and do the following:

It’s time to bring your business to the next level. Maybe you’ve recently launched and sparked significant interest in the market, or maybe you’ve been building the company for several years and have recently achieved a sustainable pattern of growth and momentum. Whatever stage you’re at—whether you’re looking for seed capital, early stage funding, or later stage financing—you’re entering into serious discussions with potential investors.

• Do you know which investors are worth your time and energy?
• Are you able to pick out the worthwhile sources of capital and smart strategic partners from the crowd?

If you can’t, you risk not only wasting your own time, but potentially setting your business up for significant legal and financial instability.