How to Deduct the Business-Use of Your Car this Year

Many business owners and employees have to use a personal car for business purposes, and luckily it’s quite simple to claim these as business expenses following IRS regulations. In order to do so, it’s paramount that you keep accurate mileage and depreciation records. If you’rereading this thinking, “Oh no, I haven’t kept track of any of that this year.”You may have to wait until next year, but you have the ability to begin your record keeping soon, on January 1.

If you use your car for only business purposes, you can deduct its entire cost of operation, with some limitations discussed below. If you use your car for both business and personal purposes, you may only deduct the costs from business use.

In both cases, everything must be documented and strictly business-related. Keep reading for more on this to get started and be sure to consult with a tax advisor. Each individual business situation is unique and can be very complex, so expert advice will definitely help ensure you are following all the rules correctly.

Keep Detailed Records

The IRS is very detail-oriented, and they expect you to be the same. Keep a record of all your expenses and business miles that you want to write off with a vehicle expense log. You can pick one of these up at most office supply or stationery stores. There are also a number of apps available for mileage tracking that will do it for you.

Items to support the deductions you claim include receipts, canceled checks, and bills. For each business trip in the car,be sure to log the date, miles traveled, destination, and the purpose, such as whether it is for business, personal use, or your commute. It’s best to have a car with great MPG,because there is a standard deduction per mile. For more information on record keeping, you can check out Topic No. 305 from the IRS.

Standard Mileage Rate

The IRS allows self-employed individuals and employees to use a standard mileage rate when submitting business claims.To use the standard mileage rate for a car, you must own or lease the car and use it in within the first year of your business. It’s fairly simple to track your total mileage for the year–write down the odometer reading of the first day you start using the car for business purposes and on the day the year ends.

Business miles include anything actually driven for business, such as visiting a client, going to the bank, or meeting with an accountant or lawyer. All of this counts towards your deduction, as well as the cost of parking fees and tolls you pay for the business.

If you’re self-employed, you can deduct your car loan interest that’s related to the business use of the car. Commuting time and running personal errands is travel that is not considered business related. For the most up-to-date standard mileage rate, check out Publication 463 from the IRS.

Actual Vehicle Expenses

The other method for claiming your personal car for business use is called the actual expense method. To utilize this, you must determine the actual cost to own and operate the car for business purposes. This includes gas, oil, repairs, insurance, licenses, tires,registration fees, and lease payments from the total business miles driven.

Depreciation

Depreciation is the amount you can deduct overtime for standard wear and tear the vehicle obtains over time. If you use the standard mileage rate, you cannot deduct depreciation on the vehicle,unless you use your car for 50% or less for business reasons.

Typically, the Modified Accelerated Cost Recovery System is the only method that can be used if your car was placed in service after 1986, but be sure to check with a tax advisor. Depreciation can be a very complicated subject and you want to make sure you are doing it right for your business. For more information, refer to TopicNo. 704 from the IRS.

Ownership

Knowing the different types of car ownership will help you determine how to claim your car for business use the correct way. A sole proprietor or self-employed owner is one that is a single-member LLC and files a Schedule C their personal tax return. Like this,you can choose to use either the standard mileage rate or actual expense method.

An S Corporation/C Corporation requires a vehicle used for business to be owned by the corporation or by an employee. The method of claiming the deduction will depend on this ownership. If the vehicle is owned by an employee or a shareholder-employee, they can submit a request for reimbursement to their employer based on their documented business miles.

Typically, the corporation or business can then reimburse the employee based on the standard rate. It’s also generally easier for a business to allow an employee to use their own personal vehicle for work and submit an expense reimbursement request. This puts the responsibility of record-keeping on the employee, which saves time and money for the employer.

Sam Casteris is a small business owner and freelance writer operating out of Phoenix, AZ. You can find more of her work on Contently.

Chief Challenges Business of Today Must Face

Getting operations off the ground is a daunting challenge. Yet, it is just the beginning of a series of trials and tribulations: the process of navigating the market and outmaneuvering the competition. The pace of economic and technological change has never been greater. Great uncertainty and volatility loom over entrepreneurs. It is never easy to discover what customers want and do a better job at delivering that to them than the next company.  This can only come through long-term strategic planning and the ability to solve dynamic challenges on the fly.

Cash flow management

Cash is the king of the business realm and maintaining a steady flow of itis the lifeline of any business. Running dry is always a risk in a less-than-ideal lending climate we operate in, which is to say that businesses need to come up with a rock-solid financial plan. What is more, money management and bookkeeping may require them to hire professionals versed in dealing with financial tasks and obligations, including accounting, taxes and invoices. This can help businesses acquire enough capital, pile up reserves,and anticipate downturns and emergencies ahead of time.

Finding your audience 

Barriers to entering the market are as low as ever. That may be a good thing, but staying in the business long-term is a different ball game entirely.Companies are facing immense competition and consumers are enjoying a wide selection of products and services across different industries. Hence, it is extremely difficult for a new business to find and carve out a profitable niche. What gives you a real fighting chance is extensive market research. It paves the way to a highly-focused approach to catering to people’s wants and needs (your target market).

Marketing on a budget

Marketing wilderness out there is getting rather complex and incredibly crowded. A new channel or tool comes to life almost every day. The bulk of modern brands have an online presence and they are trying to make waves in social media and other booming hubs. Well, the key challenge is to pull it off without breaking the bank or spreading oneself too thin. In other words, you need to figure out which channels hold the biggest potential to arrest and retain the attention of consumers. Then, you craft optimal brand messages to build trust and cultivate loyalty.

Building the right team

People are the glue that holds companies together. To harness the full workforce potential and assemble the best possible team, you have to create a sound recruitment policy, your road map. Look into, but also beyond just skills and experience. Make sure candidates fit your business culture and relate to your vision. Find out what drives them and foster a positive and healthy work environment. Offer enough perks and benefits to attract and retain talent. Keep the engagement, productivity and motivation going.

Reducing the overheads

Expenditures tend to quickly add up and they can melt the budget in no time. The best way to prevent this disaster from shattering your entrepreneurial dreams is to keep the spending in check. So, calculate exactly how much money is coming in and out of your business. Next, identify major problem areas, where you can make savings. There is no shortage of tactics here: working from home, outsourcing instead of hiring full-time, improving power quality to trim electricity bills, buying supplies in bulk, increasing water conservation, etc.

Sow the seeds of success

If you really mean business, you have to compete on more than just price or product quality. Never succumb to the temptation to cut corners or fight on all fronts at once. Take your time planning and fleshing out strategies. Assess risks and tackle problems before they spiral out of control. Get to know your audience and adapt to rapidly-changing preferences. Keep up the pace technological advancements and market trends. You should be able to tap into a steady stream of cash and propel your whole organization forward. 

Diana Smith is a full time mom of two beautiful girls interested in topics related to marketing and latest business trends. In her free time she enjoys exercising and preparing healthy meals for her family.

How to Set Up a Home Office on a Tight Budget

Working from a home office is many people’s dream. The idea of waking up and walking mere footsteps, instead of driving miles and miles, and being able to work in your pajamas, represents the height of living and working flexibly.

And while working from home offers many benefits, there are quite a few changes you’ll to which you’ll need to adapt. Specifically, you will be responsible for setting up your home office. This means not only finding the right equipment, but paying for it all, which can get expensive quickly.
But building a good home office doesn’t necessarily need to mean spending thousands on a high-end desk and premium computer equipment. You can set up a home office that can be a bastion of productivity even if you’re on a tight budget. And here’s how

Make It Separate

This is a way to save on your home office that might not be felt right away but that will still help lessen the burden on your pocketbook. Essentially, by making sure your office is completely separate from the rest of your home, and designating it as strictly an office, you will be able to claim this space on you tax returns, helping put money in your pocket at the end of each year.

However, before you get too excited, know that there are some stipulations involved with this deduction, especially after the new tax reform law that went into action in 2018. Essentially, you can only claim a home office if it’s your primary or sole place of business. So if you work for a company and they let you split between working from the office and working from home, then you might not be able to take this deduction. But if you run your own business, or work full-time as a freelancer, then you probably can.

Consider enlisting the services of tax accountant, as they can help you figure out if you qualify and also how much you can deduct. Typically, it will depend on how big the office is in comparison to the rest of your home. So if you have an 800 sq. foot home, and your office is 80 sq. feet, you should be able to claim 10 percent of your living expenses as business expenses, and these can be deducted from your taxes. However, it’s not always this black and white, so make sure to consult a professional before signing your name to any legally binding documents, i.e. your tax returns.

Find Used Equipment

A more immediate way to save when setting up your home office is to opt for second-hand or used equipment. While it might look nice to have brand new mahogany furniture, this will set you back quite a bit, and it might be best to wait for these luxuries until you’ve had the chance to save some cash.

But this also goes for computers and A/V equipment. It’s often nice for those working from home to have a separate monitor so that you can keep track of all the tabs and programs you have open, and these can usually be found second hand for rather cheap. A quick Google search for “used” or “second-hand office equipment” will reveal countless places where you can get what you need at great prices.

And if you’re in need of a new computer, ask yourself if you really need a brand new, $2,000 Macbook. For most of us, the answer is probably no, especially since you can find other options for much more cheaply. For example, shop around on manufacturer’s refurbished catalogues. These devices come with full manufacturer’s warranties, and they are often better buys than something brand new, as any issue they might have has already been detected and addressed.

Choose the Right Room

Working from a home office will require you to use more utilities than normal. For example, if you live in a colder climate, many of us are used to turning the heat way down during the day; it doesn’t make sense to heat an empty house. But when working from home, this might change. You may need to run heat or A/C all day, and you may start using more electricity. And while in the beginning this might not seem like a big deal, these expenses can add up quickly.

To work around this, spend some time to choose the right room in your house. Try to find a place that receives a good amount of natural light, as this will not only help reduce your need for lamps and lighting, but it can also help enhance your mood and productivity.

If you live in a warm climate, try to pick a room, though, that doesn’t get blasted by direct sunlight, as this will make it hotter and increase your need for A/C. But if you’re in a cold climate, this can help heat things up and reduce your need to turn on the furnace or baseboards. Rooms that face north tend to be a good happy medium as they will get light from outside but will not severely alter the room temperature of your office.

Opt for Free Services

There are countless services out there all claiming to help you manage your home business much better than you can on your own. And while this may be true, the expense of these services can add up quickly. So don’t discount free services. Google Drive can do everything and more than Microsoft Word, and it’s getting better every day. Trello can help you manage projects, Skype can work as a phone, and PayPal allows you to send and pay invoices for free.

Of course, there may come a time when it makes sense to pay for a service, such as when you want to make use of marketing automation or CRM software. But the key is to save elsewhere so that when you do need to incur these expenses it’s not as dramatic.

Set Your Home Office Up Today

While setting a home office up on a budget might make it look a little less glamorous, it will not affect its functionality. And by working to save wherever you can, you’re going to increase the margins on whatever you’re using the office for, boosting your income and turning you into a savvy remote worker.

About the Author: Kevin Conner is the founder of Broadband Search, a service dedicated to helping people find the right internet package for them. As an entrepreneur and a long-time home office worker, he’s always looking for ways to help others raise margins and boost productivity.

Choosing New Business Software

Running a business involves making regular improvements to your efficiency so that you are able to keep up with your competitors and offer your customers a fantastic level of service which they can’t get elsewhere. And one of the main ways that you can do this is by using various different types of business software. But with so many different choices out there, it can present a major challenge to know which ones to go for. So, here is a brief guide designed to make your task just a little bit easier.

Get Your Aims Clear

Before doing anything, you should decide on your aims when it comes to your business. What are the issues that you would like to address and how can the software help to improve these? Ultimately, your best course of action is to divide these up into priority order. New software takes time to get used to and you don’t want to change everything at once. And once you have installed the software and become used to how it works, you then need to address just how successful it has been in solving your problems.

Work Out Your Budget

The next step that you need to take is to determine your budget. Business software ranges from the free to the expensive, and you don’t want to risk overspending – especially if it proves not to work out. Find out whether there is an upfront cost involved in getting the software or if you have to fork out for a monthly subscription. And remember that just because some software is expensive, it doesn’t necessarily mean that it is going to be the best.

Look for Specialised Programs

With such a wealth of business software out there, it makes sense that it fits comfortably within your aims. Of course,there is plenty of general software out there, but if you can go for something which fits your business aims specifically, this is even better. So, you could take a look at some legal software if you run a firm involved in this area. The closer the software fits your individual needs and requirements, the more useful it is likely to be.

Get Input from Staff Members

It is not only you who could end up benefitting from business software. In fact, your staff may end up using the programs more than you do! So, it makes sense that you consult with them closely when it comes to working out the best software out there for your organisation.

Businesses both large and small use software to improve the way that they run. And while it makes sense that you do the same thing, you should think carefully about the types of programs which you choose to invest in so that you can get the maximum benefits from them.       

5 Actionable Tips for Scaling Your Small Business

Do you know how to scale your business? Starting your business took a lot of hard work. Now that you’re ready for expansion, you will likely face an entirely new set of challenges.

Already, as part of your routine, you must serve customers, supervise your staff, keep the books and fill other administrative roles. With so much to do, scaling your business might seem impossible. Where do you start? How do you find the time?

Use the following actionable tips for scaling your small business to do the job without becoming overwhelmed or busting your budget.

Embrace Success

Already, you’ve overcome the odds by building a successful small business. You know what failure looks like and you probably don’t like it. So, as you scale your business, think big and approach everything you do with a “success” mentality.

You can probably find thousands of fantastic ideas that can help you scale. Prepare yourself right now to say “no” to most of them. You have limited amounts of time and money, so stay focused on the things that matter the most.

Always keep the big picture in mind. Make every decision with an eye for the future. If you don’t, you could incur unnecessary expenses. For example, if you skimp on your data network or software applications, you may have to replace them if they can’t grow with you.

So, when you invest in systems, make sure they can scale with your business. Take a similar approach while assembling your team.

Get Help

Find someone who can serve as your mentor and advisor. Such a person could be anyone with experience either in your industry or your type of business. An investor, business owner, or someone with similar experience can fill this role.

In addition to getting advice from peers, you should learn to depend on your team. Rather than trying to do everything yourself, try delegating responsibilities. By letting other people share the load, you can have more time to plan and execute your growth strategy.

Of course, as your business grows, you will need to expand your team. Avoid the temptation to take shortcuts with your team. You need well-qualified people who can deliver a high level of performance. To do this, you’ll need to offer competitive wages, perks, educational opportunities, and other benefits.

Use Technology

As you scale, look for ways to work smarter rather than harder. Here, technology can play a vital role. For instance, you can use a cloud-based collaboration app to unify remote workers with your traditional employees.

When done right, your entire team can work together on documents, share files, and hold group brainstorming sessions. Tools that support instant messaging, live chat, video conferencing, and virtual whiteboards can also help your staff become more productive.

Automation offers you additional ways to scale your business. Thanks to technology, you can eliminate redundant data entry and automate many routine tasks. In the end, you can substantially improve productivity while eliminating opportunities for making errors.

Other opportunities for improving your business’ performance include analytics tools. These can collect and analyze multiple data points from your organization and provide insights into its performance.

Get Online

Your website and social networks are assets that you shouldn’t ignore. Spend time assessing their current state and then develop a plan for moving forward. Remember that a fresh and active online presence can grow your sales.

Now is a fantastic time to refresh your market research. First, identify the type of customers that need what you offer. Next, learn about the problems and challenges they face. You should also learn about their desires and aspirations.

Based on your research, create a persona that represents your ideal customer. As you create content, keep this person in mind. Create value by addressing the real-world issues that your persona faces.

Most of all, be consistent. On social media, share your brand’s personality. Socialize with your followers and share content. Do more than pitch sales. Become part of the community.

Encourage Feedback

In your quest for growth, never forget about your current customers. For starters, you can dramatically reduce your selling costs by closing repeat sales. In other words, by expanding your base, you can boost your profitability.

Your customers can also provide you with feedback that can support your ongoing success. They can provide you with answers to important questions:

● What new products and features should you sell?
● How can you create a better customer experience?
● What factors limit their frequency and volume of sales?
● How can you deliver more value to the marketplace?

Consider sending customers a survey after every sale. This gives them a chance to express their level of satisfaction and share their opinions. To encourage participation, keep your surveys short and simple. Additionally, offer an incentive such as a discount on a future purchase.

In conclusion, rest assured that you can successfully scale your business. However, to avoid the mistakes that have doomed other business, you should apply the above tips. Start by thinking big. your winning attitude will help you overcome failures and mistakes.

As you make progress, avoid distractions, get the help you need, leverage technology, and build your online presence. In the end, scaling your business requires a lot of work and some risk. What do you think about this topic? Share your comments or experiences that may help small business owners rise to the next level.

Joe Peters

Joe Peters is a Baltimore-based freelance writer and an ultimate tech enthusiast. When he is not working his magic as a marketing consultant, this incurable tech junkie enjoys reading about the latest apps and gadgets and binge-watching his favorite TV shows. You can reach him @bmorepeters

7 Foolproof Agility Factors That Accelerate Growth

Having a plan to help speed up your business operations and improve the overall functionality of your business is vital to getting a sizeable amount of growth and allowing a business to not only succeed but to also become the leader in your particular industry. You can always consider financing options like the business factoring, credit line financing etc. from trusted loan providers for a smooth business cash flow, but sticking to the predefined budget always helps. So what are some of the things that you need to consider when it comes to increasing speed and becoming more and more productive?

The following are some of the tips that the industry leaders use in their operations to become better at what they do.

Learn the Word No and Use it on a Regular Basis

It is okay for you to say no and to do so on a regular basis. Many people think that the word no is an evil word and that if they tell someone no that there will be some sort of fallout from it. The simple truth is that it is okay for you to not always feel like you have to say yes when you are asked to do something. Just because someone comes up with a particular idea does not mean you have to go with it. Learn to trust your gut a lot more and you will be just fine.

Set a goal that is your #1 goal

It is vital that you have a goal that is your biggest point. Too often a person will feel that they have to give equal attention to all of their goals. This is not the case, it is acceptable for you to simply find one goal and let that be the centre of your main focus. This will help you to not find yourself wandering all over the board with a variety of ideas. This allows you to stay focused on one single idea and avoids you taking away your focus for other ideas and projects. It may take a little time for you to look at all of the goals that you have, but you will need to narrow these down to a single one.

Don’t hesitate to become a partnership expert

If you feel that there is no real advantage to this, then simply look at Google and where they are as compared to where they were in 2005. This has come from the fact that they are willing to partner with other companies. The same can be said when talking about Amazon. These are companies that showed a willingness for them to partner with other companies to help and better their standing as well as help them to become more of a household name. the more partnerships that you build, then the stronger of a bond you will have in the business world. Taking a chance and building a partnership will go a long way in helping you to be in a better position with your business.

Take the time to create prototypes

It will be tempting to want to just get a product out to the public. This needs to be avoided and you need to make sure that you take the time to create test products that will allow any flaws to be seen before you send the final product out for people to buy. This is generally a great time for all of the bugs to be worked out and help you and your testers to see where some improvements can be made with your product. This may take a little more time for you to get things out to the public, but in the end, it will lead to you not having to send things back to the drawing board to fix any issues that were not discovered due to a lack of a test product.

Eliminate the budget from last year

Many people think that if they simply use the same budget that they had the previous year that everything will work out perfectly. That is a thought that needs to be left in the past as companies have budgets that swell and shrink based on their particular needs. If you are simply trying to use the budget from last year, you may discover that you are not able to get the same level of results as you had hoped. Understand that what worked last year may not be as valuable in the next year. You may even get to the point that you discover that you don’t need nearly as much as you did last year and can roll the savings over into another project or the next year’s budget.

End the use of a three-year plan

Planning is a good thing, but you need to also look at the fact that these three-year plans are not nearly as useful as they once were. Plans change and if you8 are locked on a three-year plan, then you will discover that this plan of action will not allow for you to make any concessions and your plans will be up in smoke before you even were able to get them going. A quarter by a quarter plan is a lot more effective and tends to have a lot better results.

Focus more on speed than you do costs

Those that look at the speed of their business as opposed to the costs will see that there is a big difference and this will generally lead to there being a small advantage to them being fast as opposed to cost mindful. There will be a lot of room for you to adapt and adjust this mindset if it is not working as well as you had hoped.

All of these ideas and tips are able to make a huge difference. No matter if you use just one of these or adopt all of them, you will see a drastic change in your business and see for yourself that the more effective you are, then the faster that you will be and the bigger growth you will experience.

Give Consumers What They Want With These Ecommerce Trends

The future of online retail isn’t just evolving, it is changing at an extremely rapid rate, a rate which many ecommerce owners are struggling to keep up with. It wasn’t that long ago that buying things online was considered remarkable and there were only a few companies out there that would provide this service. Some of them are even Nowadays, eCommerce sales are in the trillions of dollars, and it doesn’t look like they’re going to stop increasing any time soon.

Today, we look at the future of ecommerce with great optimism. The guys at Subscriptionly put together an infographic showing how brands both big and small are making improvements to their services, and making the entire online shopping process easier, more efficient, and quicker.

Industry experts have been following the movement of eCommerce since its beginning, and by also looking at consumer wants and needs, have come up with some predictions for the future of this industry.

One of the biggest changes that is set to come about in the near future is the rise of digital currency. Already, people all over the globe have started to use cryptocurrencies as a form of online payment method. As an immediate result of this, a few established ecommerce stores have started to accept certain cryptocurrencies, most commonly Bitcoin.

Over time, it is looking likely that the use of digital currencies will become more commonplace, therefore, people may favor stores that will let them pay using this method.

There are many perks with using this way of payment. For example, the transaction fees are much lower than credit card or PayPal fees.

Another benefit that people will be interested in is the fraud prevention that comes with it. All transactions that take place using digital currencies are recorded on a blockchain, a sort of digital ledger, making them safe and irreversible.

Speed is also a positive that comes with using digital currencies. When using a credit card to make a transaction, it will sometimes take hours or even days for the transaction to process. Some digital currencies are a lot quicker and could end up saving the user and store owner a lot of time.

If you are an ecommerce store owner, it may be worth taking the time to look into the various benefits of accepting cryptocurrencies as a form of payment.

You can find out more about this as well as various other trends that are set to change the course of ecommerce in the infographic below.

future-of-ecommerce-0607