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Posts Tagged ‘business’

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4-13-2011 Business Meeting

Question: Credit Card Merchant Accounts?

I recently submitted an application for a business credit card merchant account. It is an existing business with an existing merchant account with another company. This new provider wants me to give them my social security number even though the company has its own EIN/tax ID. Why would they want my social? Does this open me up to financial liabilities of the company? I know if they hard pull my credit information, this has a negative impact on my personal credit rating. The other option is to jump through hoops of sending several years tax returns and months of bank statements. What is the best course of action?
We have been in business for almost 7 years so it is not from lack of history.
This is not for a business credit card, it is for a merchant account to process credit cards.

Answer: When a merchant applies for a merchant account, there are a number of documents that he or she will have to submit. Whether your business is new or an existing one, the application process is the same.

As far as credit history is concerned, a review of the business’ financial performance will almost certainly be done during the application process. A typical request a card processing company will make is to see the business’ financial statements for the latest two years. The organization’s principals will also be scrutinized and they are usually required to provide their tax returns for the latest two years. If not satisfied by the information in the tax returns, the merchant services provider will pull their credit files. Either way, SSN must be provided. You need to understand that banks view a merchant account as a form of a line of credit and the application process is designed accordingly.

DATEVINTERACT Consultant Application for Microsoft Surface by designaffairs

Question: Starting up LLC questions?

Im interested in starting an LLC and just wondering the process i need to go through. I know i first have to register the name with the state and then i heard something about applying for a Federal EIN tax number and then a State tax number.
Is it true you need the EIN when running the LLC?
Also what should i know before starting the process, just dont know about the whole registering process.
What about putting my vehicles under it?
What if something bad happens and im not registered as LLC? Would my business property get taken?

Answer: OK – just so you know, I have a full C Corporation and three LLCs that I am currently running.

Your first statements are correct – and yes, I would suggest getting an EIN for your LLC as that adds more credence to the fact that you are doing business as a company when you file your taxes (http://www.irs.gov/businesses/small/article/0,,id=102767,00.html)

OK – the very next thing you should do (even before transferring the vehicle or worrying about legal issues) is to find a really good accountant for a LLC – this will be a LOT HARDER than it sounds. As I have already noted, I found one that is both an accountant and a tax lawyer (even more rare)! You want to find someone who really understands a small LLC and is willing to push to get all the tax benefits for you that are legal in today’s tax code. Many accountants do not really understand the tax codes for LLC. This one item can save you tens of thousands of dollars in very short order!

My advice here is to read the book Rich Dad Poor Dad (if you have not already) and use that as a basis to question accountants to see if they know how the tax codes work for small C corps.

The next thing to do is start setting up your advertising to be as much word of mouth as you can possible stand (good way to use that vehicle to mentioned to get around to network and meetings). You want to plan as best as you can to ensure that you have as much cash flow as your company will need. Depending on the type of business you are in, there could be any number of natural ups and downs that you will need to plan for.

As for the vehicle – again the accountant should be able to advise you best. I have been told that the safest way to have the company own a vehicle is for the company to lease one. This then become a full write off. Yes, you will still need to keep track of mileage and/or other information as directed by your accountant. The LLC can also put money in a 401K or other retirement plan for you and your employees.

You should set things up so that medical expenses are paid by the LLC. My wife retired with a good pension and medical benefits (although the company is cutting back on retiree benefits now), so in my case, my C Corp picks up all unpaid medical that is not covered by the insurance company. Also under medical can be health club dues for medical reasons – thus one of my LLC’s has a fitness complex that is on it’s property that my C Corp then pays dues for the use of it.

You might also want to check you local area to find out if there are other small LLC owners. If so, you might want to ask them to join you in developing a master mind group where you can all share ideas on everything from building your organization to benefits from sharing resources (like accounting, purchasing office supplies, payroll services, etc.).

Thus you are right – there are a lot of tricks to the trade of learning how to run a LLC to benefit you and the company and also pay your legal (albeit small) amount to Uncle Sam – play like a big boy using their tools in a small company.

Good Luck.

Also, you probably already know the following, but just in case, here is what I typically recommend to those thinking about starting out in business:

Anytime you want to start any kind of business, there are several basics that you will need:

* You should first sit down and think about what it is you want to do and then write out the scenario in detail! This may sound tedious, but it will help you clarify what it is you are thinking about. Also, when you talk to anyone about the business (mentor, bank, clients, prospective investor), you will have a clear vision to share with him or her. You can check any number of books at your local library or the Internet for ideas on creating a business plan or goals list.

* Is there anyone out there doing something like what you want to do already? Can you research what it is that they do and maybe even talk with them about what they do?

* Are there businesses out there that are doing some aspect that you want to do? In this case, you want to create an online drop shipment business. What websites have you seen that you like (can you talk with them)? How does the local McDonalds or other retail outlet do business that might help you in yours (i.e. how is McDonalds able to provide a product to a customer on demand at almost anytime of day – and do it with a much of high school kids)?

* Never listen to anyone who says that you CANNOT do something UNLESS they have been there and tried that!!!!! Anyone can tell you the good things that you can try or do, however, only someone who has actually tried the specific thing your are thinking can truly give you advise on the pitfalls that could await the unsuspecting.

* If you want to look for a mentor (free or paid – although mentors usually offer their time at no cost), the question that you should be ready to address is WIIFM (What In It For Me {the mentor})! What are you willing to do for your mentor to help them with something that they may need (for me it’s simple – I am looking for 10 points

Contacts:

* Contact your local Better Business Bureau or Chamber of Commerce – they have business people who will help start up operations.

* Contact your local high school, community college or university and find out whom the teachers are for courses related to your business (like business or computer/internet classes). Contact these teachers to get some ideas or even to see if they will take you company startup on as a class project or special project for some of the student to work on (might give the students extra credit and you a free startup). In the worst case, you might get the names of some good students whom you might hire to do certain aspects of what you need at a very low cost.

* Contact you local, county or state governments (check their websites) – many areas have small business administrations (or some other agency that can help with various things) that have any number of references and resources available at little or no cost.

* Go to your local library in the Reference Section and find the Encyclopedia of Associations. It is a three-book set published by Gale Research. The first book lists thousands of tiles of professional organizations and groups. It will give a code number to use in the other two books to find out more about that organization. Contact the organizations who have something to do with your idea and find out if they have a services to give you advise or local groups that you can network with. In many cases, just asking for membership and publications information may give you a lot of useful stuff.

Other outstanding sources that I have used in running my four businesses:

* Nightingale-Conant – the largest producer of audio/video training programs in the world. Many of their programs can be borrowed for free from local libraries. http://www.nightingale.com

* Entrepreneur Magazine (http://www.entrepreneurmag.com) – many great tips and ideas about running a company.

* Rich Dad Poor Dad – http://www.richdadpoordad.com/ – by Robert Kiyosaki. Has any number of products (read the book first) that you can choose from.

* Start Up Nation (besides their website, they have a radio show that may be on in your area – usually Sundays and read the book) http://www.startupnation.com/index.asp

The secret to success in business is to read everything that you can relate to your subject and to talk with as many people in the field as possible.

Good Luck – definitely read the book first (probably can be found at your local library). Depending on what your plan for your company – you actually might want to consider starting a full C Corporation first as there are more benefits with that over an LLC.

LLC in PA – Form a Pennsylvania LLC

Question: If I make roughly 11,000 in self employment income how much federal income tax do I owe?

This is my first year in business for myself and I know about self employment 15.3% tax but the federal income tax confuses me. I don’t really have any expenses to write off for my business and I’m single and 24 years old. I’m obviously going to be talking to a professional come tax time… But I want an estimate to alleviate stress. Any help is appreciated!
Aren’t I a likely audit target for having that much deduction on a schedule c? I’m not hiding anything but I don’t want to deal with an audit at all because they don’t sound fun. And I thought you couldn’t take a standard deduction if you were self emloyed…

Answer: 11,000 less 1/2 of SE tax, less $5700 standard deduction, $3650 personal exemption leaves you $872 of taxable income or about $87 in income tax.

Add that to the $1554 SE tax and you’ll owe $1641.

The forms aren’t that difficult if you have nothing to deduct–so do them yourself and save $300.

Self Employed

Question: I need help choosing the best accounting software.?

Hello! I am a small business owner, married, and have a full-time job out of the home. I want to get accounting and invoicing software for my businesses. I have a freelance writing and editing business and a jewelry and accessories business. I would like the software to allow me to create customized invoices and quotes, track payments, show where money is going and coming from, organize charges for tax purposes, allow me to print and email the invoices and quotes, organize my clients and customers’ information, easy to use, and not too expensive. I would prefer one software package rather than two to do both the accounting and invoicing. It can be any brand as long as I can download it. I would like only software(s) with a free trial to see if it is for me.

Any input, suggestions, etc. would be greatly appreciated.

THANKS!

Answer: It’s not exactly what you are asking for, but Quickbooks is the way to go. Yes, it’s a little expensive and takes some time to learn. But it’s full-featured. It can handle anything you are doing now or wish to do in the future. It has all the features you want.

You basically can’t get full-featured software that is ‘easy to use’ and inexpensive.
I know – I’ve tried many different accounting programs. Eventually, you will want to enter a transaction and the cheap software won’t have the required feature. As an aside, tax laws and tax tables change every year, so whatever you buy if you are planning to use it for tax purposes will need to be upgraded to the new tables each year. And yes, you have to pay for such updates.

HiTech Financial Accounting Software – Free Trial Download, Buy Online