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.

How to Deal with Your Business Getting Sued

No one goes into business expecting to be sued but unfortunately, it does happen. It could be a customer, a supplier, another business or an employee that files a claim against you and win or lose it is likely to cost you money. Even worse though is the harm it can do to the reputation of your business and that could lose you sales. You need to have the matter dealt with as quickly and as amicably as possible, so what should you do if someone sues your business?

Speak With An Attorney

This should be the very first thing you do.  You need to review the situation with a specialist, such as a nursing license defense attorney if the claim against you is for medical malpractice, or a ta lawyer if your issues are with the IRS. Different areas of lawsuits need different specialist knowledge and not seeking the right sort of assistance could affect your chances of winning the case.

When they are reviewing your case, if any information in the litigation is incorrect they are able to put the case on hold and also apply for a preservation order. This means that both parties must retain all data relating to the legal action.

You should always be honest and open with your attorney and do not try to hide anything from them. They cannot handle your case effectively if they only have half the facts.

You should have no direct contact with the person or company that is accusing you. Once they file a lawsuit the time for talking has passed and if they do contact you, you should refer them to your attorney.

Inform Your Insurers

There are many different types of business insurance policies to cover these sorts of eventualities, and if you have such a policy you should inform your insures of the impending court case. If you are covered, normally the insurers would pay your attorneys fees, court costs and any money that has to be paid to the other party. You should never just assume you are covered though as sometimes there can be specific circumstances that exclude it from the policy.

Do Not Ignore It

One of the worst things you can do if you’re sued, is to ignore a lawsuit. After a specified time, the plaintiff will win the case without you being able to do anything about it.

When you first receive it you will be given a time limit to respond, in most states, this is 30 days. You have that time to confer with your attorney and decide how you will respond. Before you do that, you need to understand the nature of the claim and the potential liability you and your business are exposed to.

Your attorney should make a plan of action with you and explain the pros and cons of defending the claim. Your level of insurance could also affect your decision at this point, and you only have those few days to get all this sorted out.

All the time the case is going on you need to deal with any requests for information promptly, as the more times the attorney has to ask you for things, the larger their bill will be. You also need to remember that while all this is going on you still have a business to run, and you need to stay focused on that too.

4 Types of Insurance You Need to Protect Your Small Business

Optimism is high among small business owners, with revenue and staff growth on the rise as 53% of small businesses reported that they planned to expand in 2018. Growth is great and indicates positive trends for many small business owners in various industries, but it also brings with it more questions regarding company compliance and protection as you work to cover all your bases. Business insurance is a tricky subject that really depends on the type of business you run and how you are operating, but if you want to ensure you are covered, you will want to take a look at these four policies.

General Liability Insurance

If you are just getting started and are only going to invest in one type of insurance for your small business, then it absolutely must be general liability insurance. This will ensure your company and all of the time and money you’ve invested into is safe as it protects your business and any employees from any damages incurred as the result of bodily injury, property damage, medical accidents or associated expenses, libel, slander, the cost of defending lawsuits, and settlement bonds or judgments required during an appeal procedure. Every small business, even if it is home-based, should invest in general liability insurance.

Professional Liability Insurance

This is particularly useful and important for businesses that provide services to customers. Professional liability insurance, also known as errors and omissions insurance, covers you against any claims or damages caused to your clients that result from mistakes or failure to perform. General liability insurance policies generally do not provide this type of coverage and it is crucial in ensuring you are protected against any false claims as well as malpractice.

Business Owner’s Policy

If you are interested in getting a little bit of every type of coverage, try looking for a business owner’s policy that includes various features that benefit your small business. This type of policy will not only include all of the types of insurance you are required to carry as a business owner, but it will also include other things such as business interruption insurance, property insurance, vehicle coverage, liability insurance, and crime insurance. You can usually tailor your specific plan to fit what you need, making this type of policy one of the best as it often costs less than the total cost of all the individual coverage you might be looking for.

Personal Property Insurance 

Seeing as most small businesses operate out of homes, it is important to note that home insurance doesn’t always cover home-based losses. You may be required to add additional riders to any existing home insurance policy in order to cover losses associated with your business, which is where personal property insurance might come in handy. If you own the building you operate out of and it is not covered by any other insurance, personal property insurance will cover the property inside of it, such as office equipment, computers, inventory or tools.

Staying Insured From the Get-Go

While it may not seem so if you are just getting started, as your small business grows and takes on additional risks and responsibilities, business insurance will quickly become a must. By taking these four different types of business insurance policies into consideration, you can formulate a plan that makes sense for the size of your business, the industry you operate within, and what type of product or service you provide.

Guest Author, Jenny Holt, is a former HR executive turned freelance writer, who now spends more time with her young family and ageing, but ever eager Labrador, Rover.

Business Expansion: 5 Concerns When Moving Your Company across State Lines

The fact that your business is growing is good news. However, with expansion comes a new set of challenges. Whatever your situation, here are five concerns to consider when moving your company across state lines.

Regulations

Some states will have fewer regulations than others, or regulations on one thing but not something else that was more heavily regulated in your old state. For example, a product may be required to be made without a certain material or you may now be allowed to sell certain kinds of products. Other important regulations to follow include any relating to employees. Different states have different workplace rules that you must follow as an employer.

Taxes

Taxes may be a significant part of the reason why you’ve chosen to move your business in the first place. Some states have much lower taxes than others, and it can be advantageous for businesses to move where they will be afforded a tax break. In some cases, however, you may be moving to a state with a higher tax rate. It’s important for all business owners to understand their tax burden and properly plan for it. Don’t forget to plan for tax that must be collected on sales across state borders—especially online sales.

Licenses

This is not relevant in every industry but it is important to a number of professions. For example, trade careers, such as electricians and plumbers, are almost always licensed at the state level. Restaurants need to be properly licensed in order to sell food and alcohol. Don’t forget about any local licenses your business may need. Check with your new state to see if anyone on your staff requires a license to perform their job.

Insurance

Due to a number of factors, including different laws and even different insurance companies servicing the area, your company will likely have to obtain new insurance coverage when moving to another state. This includes worker’s compensation insurance, liability coverage, vehicle insurance and more. Check to make sure your new location is not in an area that floods frequently. Flood insurance is not usually included in most policies but can be purchased separately if you have need of it.

Business Registration

You will need to register your business in your new state. This is usually as simple as filling out a form, especially because the business is already likely registered on the federal level. Consult with an attorney for any inquiries about business registration in the new state. While you work to get the registration sorted out, a multipurpose moving company such as Kloke Group Moving & Storage can store your company’s items and then move them when you are ready.

Moving a business across state lines is not as simple as it may sound. There are a number of concerns to investigate, with the most important being listed above. Educate yourself and plan ahead, and your move should go smoothly.

Guest author, Lizzie Weakley is a freelance writer from Columbus, Ohio. She went to college at The Ohio State University where she studied communications. In her free time, she enjoys the outdoors and long walks in the park with her 3-year-old husky Snowball.  @LizzieWeakley

 

The Foremost Factors Of Any Transportation Company

When it comes to setting up a new business, there are many different kinds to choose from. One which is almost always likely to be a good idea, however, is that of transportation. There are certain kinds of business which are likely to always be needed by certain industries. Going for these kinds of business is therefore a relatively safe way to get started in the world of business. This makes them a good option for those who do not have much – or any – experience in running a business. Transportation is the perfect example of such a business. Of course, that doesn’t mean that running a transportation company is easy or straightforward. There is a lot to it, and you need to know as much as possible before you get started to ensure your success. Let’s have a look at some of the foremost factors of any transportation company. Here are your main considerations.

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Find Your Place

As we have seen, the major benefit of a company of this kind is that it is always going to be needed by someone or other. Of course, there is another side to that: you are likely to have a considerable amount of competition as well. Competition is not necessarily a problem as such, but it is definitely something that you want to consider and take on board as early as possible. Before you even get started, you need to decide on a location for your transportation business. In one respect, you might say that the location is not all that important for a business of this nature. After all, the main task is transportation. But the location of the depot does matter – and so too does the area that your business is likely to service. So how can you find the best possible location for your new transportation business?

Above all, you want to try and find somewhere that does not have too much in the way of competition. This can be hard to discern to begin with, but with a little research you should be able to find out a good location in your area before long. You want to try and place your business physically so that you are as likely as possible to get as many customers as you can. It might help if you draw your desired radius of operation on a map, and try from there to work out the ideal location for your depot. Wherever it ends up being, you want it somewhere neither too cluttered, nor too distant from anything else. You should be locatable, but not dwarfed by other, well-established businesses all around your depot. You would be surprised at just how important this kind of detail really can turn out to be.

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The Fleet

Regardless of what kind of transportation you are going to be involved in, you will need to get your hands on some vehicles. Finding your vehicles is one of the most important early stages of setting up a transportation business. You should endeavor to spend a lot of time on trying to find only the very best for your fleet. What you want to end up with is a fleet of trustworthy and well-maintained vehicles with a good history. If you can’t trust the vehicles that your colleagues will be driving, then you will find that you lose faith also in your business, so be sure to find the best vehicles that you can.

Where do you look for such vehicles? In general, it is a good idea to stay within the industry. Don’t go straight for private sellers offering incredible deals. More often than not, you will find that this results in poorer vehicles and a fast buck for them. Instead, look to reputable dealers whose reputation would be damaged if they sold you something of poor quality. You will need to make some executive decisions here regarding balancing your books and the quality of the transportation itself. But it is worth bearing in mind that the quality of the vehicles is something that will see your business through to the future, regardless of their short-term cost.

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It’s also hugely important that you do everything you can to keep your vehicles in proper working order. Being able to properly maintain them is a big part of running this kind of business. If you allow them to fall into disrepair, it causes a number of issues. For a start, it is not the most financially savvy move for your business to allow your most important assets to fall apart over time. But more importantly, you should not do anything to put your staff or clients at risk. So it is very important that you carry out regular checks on your vehicles, and give them everything they need to keep as good as new. When a vehicle has really had its day, don’t be afraid to replace it entirely with a brand new alternative. Look after your fleet; look after your business.

Staffing Levels

In any business, finding and keeping hold of the right staff, and the right numbers of staff, is always something of a challenge. For a business of this kind, it is no different – except that you need to make sure you are being pretty diligent with your recruitment process. You need to be very careful about the people you hire, not least because they are going to be driving your precious fleet and the cargo that you have chosen to transport in your company. You should be rigorous, put them through a lot of tests and so on, and make sure that you are hiring primarily for experience rather than motivation. As long as you are able to trust your employees, there is no limit to what you can achieve in your transportation business. But the moment that you don’t quite feel you can trust them, you will find that your business soon starts to fall apart. A strong recruitment is necessary, and so is a solid training program for all new members.

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Training is vital, because it ensures that you keep your employees in the right way from the very beginning. They need to know exactly what you expect of them and why, and this is the best way to get that information across without hassle. Training is not just for the start of employment, either – you should try to re-train your employees every now and then (about every six to eight months) just to ensure you are doing everything you can to keep them at their best. Get the staffing right, and you will have much more faith in your new business – the team themselves are the core of any business.

Safety

As an employer, you have something of a moral and legal duty to keep your employees as safe as possible at all times. For a lot of transportation businesses, safety is going to be hugely important. Clearly, for drivers in particular it is important that safety is given the status it deserves. The most beneficial way to approach this topic in your business is to have clear, defined rules that everyone knows they should follow. These rules should be clear to all, available to view or read at any time, and they should make sense to everybody. You should also try to encourage in your employees a sense of individual responsibility. At the end of the day, everybody is responsible for their own safety. Make sure everyone understands that, and it is much more likely that your employees will enjoy their work in safety.

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It’s just as important that your workers know their rights, should there be an accident of some kind. Whenever anyone in your employ suffers an injury as a result of a truck accident on the road, they have the right to contact a truck accident attorney. They also have the right to time off with sick pay – but how much should be delineated in your rules and regulations. It is vital that you allow your employees everything they are entitled to, otherwise they might not be quite so pleased, and before long you could find yourself in a much less reputable position with your employees. Safety ensures that you are taking care of everyone in your business, so this really cannot be overlooked.

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Licensing & Insurance

There are always certain legal procedures that any business needs to follow, and yours is going to be no different. For a transportation business, some of the most important regulations and laws are licensing and insurance. You need to have a license to carry out the kind of business you are engaged in – as a business and individually. You also need to make sure that every single person in your company is insured to drive. If they are not, you will find that your business gets into some very big trouble very fast. But as long as you have this satisfied, your business will be able to continue trading for as long as you like. And that is what you are likely to aim for in the early days of your business.

How To Keep Your Employees Safe

The people that work for you are your greatest resource. They are more versatile, creative and productive than any other aspect of a small business. As great as technology is, its intelligence is still artificial and many supposed smart systems actually just use brute force in the form of processing power to solve problems that humans require a great deal less work and energy to figure out. Besides, computers cannot come up with new ideas or offer the sort of professional and personal support that makes an office a productive, successful environment. That is not to say that computers are not useful, it is just that they are a tool rather than the core of your business. With this in mind, it is apropos to consider how you, as the business owner, can best protect the people that work for you. This concern is obviously of a moral character, but it is also has a more practical, possibly cynical, component. That is that if someone is injured on your property, you could be liable. Lawsuits are expensive. When you win, you still have to pay all of your legal fees. This is why it is important to invest in professional liability insurance. However, prevention is better than the cure in this case too. Here are a few ways that you can help ensure that your office is a safe, happy environment that is not a threat to the people who work there:

You may not give much thought to the value and usefulness of electricity until it is not available, but it is also quite dangerous. With the average volts running through the sockets in your building being 110 to 120, it is imperative that the system is properly maintained. A shock from 120 volts is exceptionally serious and can kill. As a responsible employer, you should make sure that you regularly invest in rcd testing. This refers to a residual current device which prevents accidents from occurring by detecting and disconnecting the power to your system. However, it is not just the electronic aspects of your building that you need to worry about. The threat of fire is quite serious, not only to you and your employees, but also to the continued viability of your business. You should also consider investing in commercial property insurance, as it will also cover you in the event of flooding, burst pipes, storms and subsidence theft. However, to make sure that these things never happen and that your insurance remains just a useful salve for your peace of mind, you should learn about the fire codes in your area and ensure that your business is compliant. If you do have a fire break out and your office is destroyed, you may get all of the money back, but the time and stress involved in rebuilding is simply not worth it.

Not every threat is so concrete though. A strong, dynamic HR department is crucial if you are going to ensure that your employees feel safe while at work. A lot of cases have been coming to light recently that involve charges of discrimination or other types of abuse. These are not only reprehensible, they can also be expensive. Ensuring that these things don’t happen in your office is a matter of communication.

Safety First: Protect Your Customers and Employees

shutterstock_101312788Running a business can not only come with a great sense of pride, but it can also be a way to generate limitless income. Each year, countless individuals take the plunge and open their own companies, and many come out on top through hard work, determination, and through strategic planning.

Unfortunately, many business owners also find themselves facing a nightmare scenario after a customer or employee slips, falls, and become injured on company property.

What Causes Slips and Falls in the Workplace?

One of the most obvious and most common causes of slips and falls in the workplace is wet floors, but there are plenty of other reasons for such accidents.

Debris left in walkways by careless employees, uneven flooring, and poor lighting prove to also be main contributors to such accidents.

This is why it is more important than ever to ensure that your company is implementing and following a strict safety and security protocol.

What Happens After a Slip and Fall Situation?

In the article, “Is Your Slip-and-Fall Accident Eligible for Compensation?” the author discusses how knowledge of the potential for slips and falls affects the outcome from a legal standpoint.

If you or someone in your company knew of the potential for a slip and fall, did nothing about it, and then someone was injured, you or your company could be facing a lawsuit.

Some lawsuits revolving around slip-and-fall cases can result in tens of thousands of dollars in damages or more.

To make matters worse, the damage to your business’ reputation could then go on to cost much more over time once the story gets out to the media.

How to Protect Your Customers and Employees

To avoid the financial, legal, and public relations costs of a slip and fall accident, there are a few simple things you can do.

First, inspect all of your business’ physical locations on a regular basis. Immediately address concerns such as employee negligence regarding wet floor safety, lighting issues, and potential hazards that may clutter flooring.

Also, consider partnering with a safety consultant to further examine the issue. For added protection discuss your business’ needs and concerns with your business insurance provider.

Finally, review your company’s procedures regarding spills, whether liquid or otherwise. Having firm policies in place that all employees are educated about can make a big difference in response after a spill has occurred.

All affected areas need to be marked off clearly so that no one unknowingly wanders into a spill-zone and ends up becoming inured.

About the Author: Andrew Rusnak is an author who writes on topics that include business insurance and corporate litigation.