Stimulus summary for small business

A quick summary for those of us too busy to know all of the ins and outs of the stimulus!  The benefits to small business owners all had to do with taxes!  I put the different provisions into four categories: Reorganizing of the business, expensing/income timing, estimated tax payments and hiring incentives. 

First is the reorganizing of the business.  There are two provisions that dictate when and how you are taxed if you sell small business stock and the taxation of your business if you convert it to an S corporation.  If you either sell or convert your company to an S corporation during 2009 or 2010 you may be eligible for reduced taxes on the gains.  Check in with your CPA if you are considering selling or reorganizing your business, this year might be the year to do that!

The second issue has to do with the timing of certain expenses and income.  Two provisions have to do with the purchasing of items that are eligible for depreciation.  One allows you to deduct the full cost of some item up to $250,000 and the other allows you to take extra depreciation the first year you buy it.  If you are considering making a major equipment purchase during the year talk to your CPA to see if it qualifies for either type of accelerated expensing, it may help you make the decision between buying it this year or next! Another provision allows you to carry back net operating losses over five years instead of 2 years.  You will want to talk to your CPA to determine what the best course of action is for your 2008 taxes!  Finally there is a provision for those businesses that are having debt cancelled.  When you have debt cancelled or they take less than you owe this is considered income in the year it happens.  Some businesses will be allowed to claim that as income over a 10 year period versus one year.  So it may be very wise to touch base with your CPA on all the provisions that came from the stimulus bill and how you can incorporate them into your business.

The third issue has to do with the amount of your estimated tax payments if more than half of your income is from a small business and is less than $500,000.  Normally you are required to pay in 100% of the prior year’s tax amount due.  This year the stimulus package allows for you to only pay in 90% of 2008’s tax due.  You do need to be careful with this as it does not mean that all taxes won’t be due it just means that you can avoid penalty for underpaying if you paying at least 90%.  Talk to your CPA if you handle your own quarterly payments.

The final provision that may affect small business is the incentive to hire unemployed veterans and disconnected youth.  This allows you to claim a tax credit of up to 40% of the first $6,000 in wages you pay to unemployed veterans and disconnected youth.  An unemployed veteran is someone who was released discharged or released from active duty within the past five years and has claimed unemployment money for more than four weeks in the past year.  A disconnected youth is anyone between the ages of 16 and 25 that have not been employed or in school for the past six months.  When hiring remember to tell your CPA if any of your new employees fall into one of these categories!

Now is a great time to sit down and review where you are at with your business and how these and other economic issues may be affecting you. So grab your CPA, attorney and business coach and make plans!

Out of the Box Motivation

What do you do when you need a boost of confidence, or energy, or just enough motivation to keep going?  What happens when the normal does not work?

This weekend was a bit of a downer for me.  I was really struggling with the positive energy to keep working on my business.  It is especially hard when you work alone as an entrepreneur, my self motivation was gone!  Even though it was the weekend, I just could not shake my lack of excitement and motivation for my business.  It affected me all weekend and would not go away! 

So how did I move on and get energized and ready for work today?

Well it was tough, at first I tried to exercise (which usually is the golden ticket), then I tried entertaining friends at our place and then went to a friends house.  Normally all these things will get me motivated and ready for another day, but they just were not working!  Luckily my husband started making suggestions on Sunday.  He said read a book – “and I mean one for fun not to learn more about a project”.  I just started at him, because I really don’t own many of those books!  (Self help is my world).  Then he said or go watch a movie (Max was napping so I had time)!  For me that was the winner, I never take time to watch movies!  Amazingly I felt so refreshed after the movie (Sex in the City).  I was amazed.  What I began to realize is that sometimes it takes stepping out of our box, in all areas of our lives to create balance.  So even though I am very adamant about keeping my life balanced, I rarely change what items I am balancing.  I learned that by not always relying on my workout to give me ideas will make my rejuvenation even better.  Making my Monday even better!

So I challenge you, expand your life balance.  Do something out of the ordinary!  You never know where it might lead you!

Stimulus Bad

I was in a meeting the other day with about 15 people.  As part of the meeting someone asked 2 people to stand up and debate the stimulus package – one side that it is good and one side that it is bad.  No problem on getting someone to debate the bad side, but a very long silence to covered the room when it was time for someone to debate the good.  Finally a brave soul stood up and after a few seconds of trying to figure out what to say said “I am getting ready to buy a house, so the home buying incentive would be good.”  Then he sat down.   We finished the meeting and I went on my way, not thinking too much about it.  However, as the days went by I began to think more and more about this.  Not ONE person was for this stimulus package.  It was not that anyone did not think something should be done, but every single person agreed that they were going about this the wrong way. 

So how do the guys in Washington think this is a good idea when most Americans are not in favor of it?  I came up with two answers.  First, Washington is out of touch with reality and their brains.  Nothing new here, what has the government done successfully (other than the military)?  Second, those of us who know this is bad and really don’t want the government to mess with our lives don’t have the time to spend chasing our reps and trying to get heard.  We are busy trying to make a living, provide for your families and live our lives the way we want to, because we know that Washington will not and cannot fix our lives for us.   Maybe we should all refocus on making our own lives better because of what we do for ourselves and we would not be as bad off as we are!  It is amazing how self responsibility works as a stimulus.

To let go of a goal or not…

Most of us are taught that you should set a goal and go for it until you achieve it.  Is this really a beneficial way to succeed?  I personally do not believe so.  Many times half way through a goal I will realize that it is the wrong goal, or that it needs a small change to really make it my goal.  We change as we grow and learn, so how can the goal that was right for us 4 months, 6 months or 2 years ago be the right goal now?  Goals should be ours, which means they should change as we do.  This is not wimping out or being weak – it is strength to admit we were headed in the wrong direction and that we need to move forward.  Does this mean if we are not achieving something that we automatically change the goal?  NO, it does mean we need to evaluate why we are not meeting that goal and take steps to solve the problem.  That could mean a new goal or a new approach to reaching that goal.  Your goals are your goals: adjust them, rewrite them and achieve them in a way that works for you!