Taxes: How Your Small Business Can Tackle Tax Season

For many business owners, tax season is perceived as headache season but taxes don’t have to be a hassle. Strategies like keeping your records in order all year long, familiarizing yourself or your staff with the relevant deductions and regulations as well as understanding your tax return post-filing will prove valuable. Here are several tips to help you master taxes.

Keep it Together

About 60 percent of small business owners say they spend more than 40 hours a year dealing with federal taxes. Dial down the stress and save some time by staying organized year-round. You don’t only need well-kept numbers for tax prep purposes but business owners often need to provide financials when in the pursuit of investors or lenders. Why not glean twice the benefits simply by being systematic about what you spend? Sifting through receipts and files a day before deadline is no one’s daydream. Stay one step ahead by making the time to be organized. Put a system in place or bring someone on board who has the time and expertise to assist.

Don’t Miss a Minus

Make the time you invest into organizing your tax records worth it. Understand what qualifies your personal effects and spaces as write-offs and keep accurate track of their usage. Don’t overlook deductions like your car and your home office. Track mileage and parking charges you’ve incurred for business travel. Is your home the primary location where you conduct your business? Or is there a space in your home dedicated exclusively to your business operations? You can deduct the relevant expenses. New to the business ownership bracket? Claim start-up business expenses like computers, furniture and inventory. Courting new clients? You can write-off 50% of business entertainment expenses like business lunches. Stick with the trend of being organized and record who attends and the nature of those outings. You won’t regret having records to back-up the deductions you’ve claimed when it means avoiding an audit or at least being prepared, in case the IRS randomly selects your return.

Make it your Business to Know, or Go Pro

According to the National Small Business Association, nearly 60 percent of business owners say administrative burdens were the biggest problems posed by federal taxes. Tax code is complicated -- especially with new regulations in place such as healthcare law and the permanent tax break via an extension to Section 179, which addresses deducting depreciable assets (equipment) up to $500,000 based on an organization’s gross revenue [Section 179 Infographic] -- perhaps so much so that code is a catalyst for many small business owners to hire a tax preparer come tax season. It’s crucial to check tax laws every year. If you have an in-house accountant or bookkeeper, confirm he/she has access to the most current information which is not only vital for tax filing in the present but for planning for your business’ future. Hiring a tax professional means added money and time spent for a typically already budget conscious small business but the NSBA’s report revealed that 85 percent of business owners surveyed relied on a professional to prepare their returns. With a looming hope for lower taxes on small businesses, make sure you take the time to research a trustworthy tax preparer before you pay someone to crunch the numbers for you. It’s important to avoid penalties and equally important that you’re getting all those deserved deductions.

Roll Call

It’s essential to accurately classify your employees. Full-time employees and freelancers (independent contractors) are two very different animals when it comes to tax filing and reporting income. Remote worker bees and telecommuters continue to make more appearances in workplace dynamics -- and on payrolls -- and in many cases are a necessary element for small business success. Be careful, don’t get fined because your employees’ roles with the business are not accurately defined. Intuit offers a worker “wizard” to help you classify team members as an independent contractor or employee.

Review to Avoid a Repeat

It takes time but it’s a simple practice to put into place. Reviewing your business’ return with an accountant will provide guidance for future endeavors. Understanding the return and what it means for your business will unveil areas needing improvement and how you can avoid tax mishaps or set yourself up for similar success moving forward.

Other Helpful Resources

IRS Calendar for Small Business and Self-Employed

Small Business and Self-Employed Tax Center

Watch out for Scammers Impersonating the IRS

Report a Tax Related Scam

Online Tax Tools for Small Business

Rhode Island Tax Awareness Workshop

Vermont Small Business Seminar

Massachusetts Business Taxes and Employer Obligations

Maine Secretary of State's Small Business Resources page

BBB offers a directory of qualified tax preparers and accountants, important IRS resources and tips on how to avoid tax scams for the 2016 tax season. For more information you can trust, visit us at bbb.org/boston, like us on Facebook, or follow us on Twitter and LinkedIn.

Written by Stephanie Benz, Senior Social Media Associate for Better Business Bureau Serving E. Massachusetts, ME, RI & VT. Meet Steph.

Giving Back: How Team BBB Makes a Difference

This time of year, it feels extra special to give more and take less! The holidays just have that effect on us. Some individuals also take the initiative to give back year round. Meet just a handful of BBB team members whose generosity is more than worthy of a “thank you!" In making the gift of kindness sound easy, they inspire us to do some good everyday.

AMY SCHRAM

BookPALS (Performing Artists for Literacy in Schools) is a signature children’s literacy program of the SAG-AFTRA Foundation designed to provide an opportunity for performers, gifted in the art of storytelling, to help develop a love of reading in children and give back to their local communities.

With teachers for parents, Amy has always loved school. In addition to her upbringing surrounded by educators, she has held roles in the field of education and performing arts including an elementary school, library. theatre camps and talent agencies. “Being able to give back to underprivileged children is a gift to me, just as much as it is for them.” Her favorite part of working with BookPALS is being in the classroom reading to the children -- seeing their faces light up when you walk in the room.

Make-A-Wish-Foundation’s mission is to grant the wishes of children with life-threatening medical conditions to enrich the human experience with hope, strength and joy.

Amy’s passion for the performing arts includes time spent with The Walt Disney World Company in Orlando, FL. It was during her time spent as a Disney employee that her heart was truly warmed by Make-A-Wish’s efforts.  As a performer she was able to see first hand the absolute magic that this experience creates for families. “To see the faces of not only the wish children light up, but their families as well, is something I will never forget. Being able to shine a bit of hope and help them enjoy happiness and respite from their daily medical routines, drives me to want to involve myself even more.” When Amy moved back to Massachusetts from Florida, she felt this organization was a great way to stay involved and spread a little ‘pixie dust ‘ outside of Disney!

Random Acts of Kindness In addition to regular volunteering with the above mentioned organizations, Amy used a recent vacation to demonstrate 30 Random Acts of Kindness. In celebration of her own 30th birthday, she made others feel special. On the trip to Disney World, she handed out stickers and jellybeans to children waiting in line, lollipops to toll booth attendants, and notebooks to "princesses" hoping for magical autographs from their favorites. Though some of Amy's 30 gestures remained anonymous, most of her efforts involved face-to-face interaction with both guests and park employees. All together it was a simple way to give a little and have it mean a lot.

JOAN SCHMITH

Bellingham High School Soccer Boosters is a parent-run, nonprofit group that provides support for the boys soccer program.

Joan has volunteered and served as Treasurer of the boosters for the past 5 years. She was motivated to get involved with the group in order to help make soccer a fun experience for her boys.  Joan’s favorite part of volunteering for the organization is "being able to provide the players with things that are outside the school's budget like warm-up jackets and hats, team bonding events, additional equipment, a banquet and awards."

ZINDA BRACKEN

Polar Plunge is the best day at the beach all year — and it’s in the middle of winter! Every year Special Olympics Massachusetts’ brrrravest supporters are “Freezin’ for a Reason” when they plunge into icy Atlantic waters. Plungers and Chickens (fundraisers who don’t take the plunge) compete for bragging rights in various team and individual fundraising categories, and are then treated to a big party on the beach with music, food, costume contests and more!

This year is Zinda’s third year doing the Polar Plunge for The Massachusetts Special Olympics, a cause for which she feels fortunate to be part of. Zinda is one of several BBB employees who “take the plunge” at one of 5 beaches in Massachusetts. Through the generosity of its participants and donors, Special Olympic athletes are not asked to pay for programs.

Keefe Tech Boosters is a nonprofit organization run by volunteers serving the communities of Ashland, Framingham, Holliston, Hopkinton and Natick, MA. The boosters raise funds for scholarships for students of Keefe Regional Technical School. The group's Indoor Snack Shack is open after school as well as during evening school classes and special events.

This is also Zinda’s third year with the boosters. During the football season, she is part of a team who run the Outdoor Snack Shack during the games. Though Zinda doesn’t have any children, her nephew attends Keefe Tech and she is a proud Alumni. Last year they raised an impressive $18,000 for scholarships, helped sports teams with their banquet and sweatshirts, bought a prom dress for a student who couldn't afford it, donated to 4 homeless students’ families and gave a gift to the teacher of the year. Zinda finds great reward in giving back to the students, “I am really glad I can help these kids out and I have seen how wonderful they are. They are respectful, caring and always take care of each other.”

DAN SCHMITH

Love of the Game runs sports programs that benefit individuals with disabilities. Their mission is to emulate the joys of being a collegiate athlete for those who wouldn't normally get that opportunity. With an emphasis on school spirit, the group provides an outlet for guests to connect, learn, and grow through on-campus sports clinics that are coached by student varsity and club athletes. Clinics are open to individuals with developmental disabilities ages 8+ and are held at the community recreation center on campus at the University of Massachusetts Lowell with tentative spring and summer events planned for Volleyball, Floor Hockey, Soccer and Baseball.

As a student at UMass Lowell, Dan entered an idea into the DifferenceMaker program. Half ‘Idea Hatcher’ and half ‘Shark Tank’, he formed a team around his concept and led it through the competition to win a few thousand dollars in funding. As founder of the program, Dan is involved in the entire process from setting up events to working directly with guests of the program.

Love of the Game’s first clinic took place in October 2015 featuring the Men's Riverhawk Varsity Basketball team who taught guests the game of basketball and made them feel included throughout the event. Dan’s inspiration for his program is his experience with Track & Field. After running at the high school level and currently a Division 1 runner for the University of Massachusetts Lowell, Dan felt athletics provided him with many benefits including mental, physical and emotional toughness, confidence, leadership and time management skills. “I decided that I owed it to life to pay these benefits forward and if I can do it in a very scalable way, all the better!” All eight of Dan’s LOTG teammates are not only athletes but most of them currently play or have played sports at the Division 1 level at their university and are now paying the benefits of sports forward. “Everyone involved in my program from the volunteers, to my co-workers, to the guests are very excited to be there. I get to work very enthusiastic people.”

In addition to running Love of the Game, Dan volunteers at the Boys and Girls Club of Greater Lowell in their athletics program.

Are you or your business considering involvement with a charity? Always do your research before you contribute your time or money to a cause. Visit Give.org for a nationwide list of charities and their reviews. BBB Wise Giving Alliance uses 20 standards to evaluate philanthropic organizations including finances and complaints. For more information you can trust, visit us at bbb.org/boston, like us on Facebook, or follow us on Twitter and LinkedIn.

Written by Stephanie Benz, Senior Social Media Associate for Better Business Bureau Serving E. Massachusetts, ME, RI & VT.

Are Weak Passwords Putting your Business at Risk?

Let’s face it, everybody hates passwords. They are a pain and a nuisance, but in today’s connected world, they are clearly necessary. Passwords are multiplying and are not going away any time soon. Most companies have no real password requirement. Everyone has a password but the clarity on what needs to be done and what is appropriate and/or what’s not appropriate is not distributed to the company.

You need to take this seriously, securing your information is important.

“But Marge does not have anything really sensitive on her computer so we just leave her alone.” – Anonymous Owner

There is often a feeling that certain people need less security, because their work does not deal with sensitive information. Please understand leaving one person’s password unsecured is like leaving a door unlocked to your palace. You cannot make this assumption without paying high penalties.

All passwords need to be secure and updated. Often breaches start by entering a smaller target to gain access to the real target. We see hacks that use smaller companies who service larger organizations targeted because they tend to be very lacking in basic security.

So what is a secure or strong password?

It may sound cliché, but your password has to be strong or there is no point in it. There are plenty of articles and viewpoints out there about how complex passwords must be, but you should always have a minimum of at least eight characters. It should not be a dictionary word (in English or any other language). It should include both uppercase and lowercase letters and a special character or two. A passphrase is a great approach as well, as long as it is not common. Passwords like 123123, letmein, birthdays, sports, names, even password1 are no good. It is like having a key with no ridges.

NOTE: Stop writing your latest password on sticky notes and “hiding” them under your desk. That is a security 101 no-no. Store it somewhere safe, out of everyone’s hands.

The top passwords for this year:

1. 123456

2. password

3. 12345

4. 12345678

5. qwerty

6. 123456789

7. 1234

8. baseball

9. dragon

10. football

11. 1234567

12. monkey

13. letmein

14. abc123

15. 111111

16.mustang

17. access

18. shadow

19. master

20. michael

21. superman

22. 696969

23. 123123

24. batman

25. trustno1

Apparently lots of people enjoy playing baseball with a dragon and driving a superman mustang. Personally, we prefer the bat mobile.

Put your password to the test at this “How Secure Is My Password” website.

Your password policy: 
Create – Implement – Enforce
Your WRITTEN policy needs to define secure and unsecured passwords, sharing rules, frequency of changing and reiterate the importance of them. All those that complain may not be fully educated on the impact that a breach would have on everyone, not just the company. Please explain to your staff clearly why it is a requirement of being employed. Lastly, your employees need to acknowledge they understand it and are responsible to abide by it. They need to also be accountable.

The skeleton of your policy should include:

1. Minimum password length
2. Password composition:
• Character requirements and allowances as well as capitals, lowercase, numbers, special characters or items such as your name and the company name are not allowed.
3. Password age limitation:
• The frequency of change required.
4. Password storage:
• Passwords are not to be written down, they must be memorized or kept in a password manager.
5. Reuse of passwords:
• Do not use the same password at work that you use in any other account.
6. Sharing and transferring:
• Passwords are not allowed to be shared without proper authorization.
• If it is shared, establish what criteria is needed to share.
7. Electronic transmission:
• No transmission over insecure networks or communication.
8. Requirements for System Administrators:
• Both their permission level and power to control others as well as a clear understanding of how are they held accountable
9. Enforcement:
• Roles, responsibilities, consequences and sanctions
10. Exemptions:
• Policy and forms for any exceptions

Now let’s be reasonable, you are not Fort Knox, but perspective still matters. If you have anything of value on those systems that you wouldn’t want distributed to everyone: your employees, competitors, vendors, partners, investors, ex-spouse, etc. then you need to protect it. Like your key to the lock on the front building that’s there for a reason.

But really, who is out to get me? I am just a small business owner.

Maybe you are the kindest person with no secrets willing to give away all your information. Even so, you may not realize largest offenders are most often internal or external IT people [who have the largest amount of access to your network]. They have access to your servers, workstations, applications and firewall. Make sure you have a process to verify their compliance as well. Also, be certain that many times these mistakes are simply that, mistakes. If one person unknowingly provides their password to an outsider who has any malicious intent, your biggest asset, and your information could be swiped from you in minutes. In this case you can be yourself, be trusting on other levels, but don’t be naive with your information.

Avoid Reaction, Take Action.

1. Create a written password policy. It should be part of your computer usage policy. Make sure all employees are familiar with it and agree to abide by it.
2. Help them understand why it is important. Listen to the groans, appreciate their issues and then insist they do it.
3. Help them understand what appropriate and inappropriate passwords are.
• While you are at it, help them understand that their families and personal information needs to be safeguarded as well. They need to keep their interested protected as well. Make it a service announcement for them. Identity theft is booming. Keeping yourself safe is very important.
4. Make sure your IT support puts the policy in place that requires policy to be followed. Often they will not like this because they will have to spend more time “resetting passwords”. A small price to pay for security.
5. Make sure your IT people are following the same procedure. We have seen often they circumvent it, because they have the authority.

For more information you can trust, visit us at bbb.org/boston, like us on Facebook, or follow us on Twitter and LinkedIn. Become an Accredited Business and get the resources you need to give you confidence and help keep your business safe and secure. 

Written by Dan Adams, CEO of BBB Accredited Business, New England Network Solutions (NENS).  

Dan is a serial entrepreneur who ran his first retail operation in high school. He founded NENS in 1993 and over the years, owned and managed several start-up companies. Dan is passionate about sharing his success strategies with fellow entrepreneurs.

Preparing your Small Business for Growth

Your business is busy trying to deliver a solution while standing out in a crowded marketplace and keeping up with developments in your industry -- it can be exhausting. Things like your brand can sometimes get lost in the happy-to-have but crazy commotion that is growth. 

Here are a few tips for staying on track while your business is making moves: 

Set distinct goals. To improve and maintain traction in the marketplace you must set goals. An easy starting point: write down your business objective and then break down how this objective will be met. Make your business goals clear and definitive and most importantly, relevant. Establish who is responsible for meeting each aspect of the objective as well as a timeline, so that everyone is held accountable as your business evolves. As time and circumstances allow, employ analytical tools to evaluate what’s working and what needs tweaking. 

Understand your market. In order for a business to grow, doing your due diligence with market research is a must. It helps you understand your industry, competition and target customers. To start, conduct an internet search using trustworthy and credible sources. For more tailored results, connect with your customers through surveys, q&a's and focus groups. Once you have a stronger understanding of the customers who make up your demographic, reach out to them regularly via a blog or email newsletter. Interact with them on social media and most importantly, listen. Encourage your customers to give you feedback and embrace it as a way to celebrate and/or improve your business endeavors. 

Be the brand. Ensure your employees are educated -- and receive continued education -- on the business’s key points and purpose. You and your team are the best branding tools imaginable. Take advantage of this and empower your colleagues to bring the brand to life. They can communicate about your brand confidently and accurately while your business evolves. Developing an elevator pitch is a great way to give an employee a springboard for how they present themselves and represent your business in the community. 

Anticipate change. Change will happen. Be thoughtful of your core principles while you do your best to roll with the punches. You’ve made an investment and it’s important not to allow it to be lost in a changing marketplace. Staying true to your point of view will allow you to further strengthen relationships with your existing community while at the same time earning the trust of prospective clients. 

Are you a rising new business less than a year old? Apply to become a New Business Sponsor. The program will arm you with the tools you need to keep up with your business’s growth. Is your business more established? Get Accredited with BBB as part of your formula for success.

For more information you can trust, visit us at bbb.org/boston, like us on Facebook, or follow us on Twitter and LinkedIn.