This month, in addition to scheduling an appointment with your CPA, you should schedule an appointment with your Denver small business lawyer – especially if it has been a while since we have talked. Making sure I am up to date with what is going on in your business can help you feel confident that your business is headed in the right direction. When you schedule an appointment, make sure to bring up the following:
Your tax and legal entity status. As mentioned a few weeks ago, you have a limited amount of time at the beginning of the year to change your tax status if you are a LLC or corporation. Depending on the amount that you are making, your assets and your liabilities, and the current situation of your company, it may make sense to change the way your company is taxed. If you are operating as a sole-proprietorship or a partnership, it may be time to switch to an LLC or corporation. Come in and talk to me, your Denver business lawyer, about your situation and we can figure out the best tax and legal entity status for you.
Any changes you plan to make this year financially. Are you planning on buying property for your business? Are you planning on hiring employees? Are you going to be making any large purchases? All of these are things your business attorney should know about.
If your equipment leases or property leases are higher than market average. If your lease is for a long term, it may be difficult to renegotiate it. However, if your lease is significantly higher than the current market price, it may be time to have it reviewed to see if there are any loopholes in it to get you out or at least renegotiate to a better price.
Any changes to your advisement team. Are you in need of new CPA? Are you bank fees too high to stomach? Have you decided to hire a marketing person? Make sure to keep me, or your Denver small business attorney, abreast of any changes to your advisement team – especially if they want you to sign long term contracts or high-priced contracts to come aboard.
Any issues you have this month in your business. As always, you should have a list of issues that your business currently has. It may be something as minor as you have one client you can’t collect $25.00 from to something more major such as if you don’t make $30,000.00 this month you may not be able to make payroll.
You have made it through January and now are settled into the year. It is a great time to make appointments with your advisors to make sure that this time next year, you are still successful! So pick up the phone or write an email and set up appointments with the following:
Your CPA. This is a no-brainer. Your taxes are due soon so schedule an appointment with your CPA today. Your CPA will help determine what you owe, if there are tax breaks available to you, and should help you plan for next future to limit your tax liability.
Your investment advisor. If your CPA determines that having a retirement plan is beneficial, meet with your investment advisor to see what options are available for you. There are multiple options available (SEP, SIMPLE, 401k, IRA, etc.) with each option having advantages and disadvantages. You should also ask if there are non-traditional investments that may be wise (think real estate bought by your 401k).
Your banker. If your CPA determines that refinancing loans is in your future, speak with your banker about options to lower your interest rates. Even if refinancing isn’t in your future, if you haven’t sat down with someone at your bank for a long time (or since you set up your account), there may be changes to your account with all the recent banking issues such as new fees, new monthly charges, or new rules. Depending on the fees and charges, you may need to change account types or change banks.
Your marketer. February is a great month to set up your marketing plan for the year. Meet with your marketer to see what goals you should have for this year and to set up your budget. Is a new website in your future? How about a new logo? Do you want to do offline marketing such as sending out pens or other items with your logo on it? Start thinking now about where you want your business to be next year this time and five years from now.
Your mortgage broker or landlord. Depending on your interest rates for you home and/or building housing your business, refinancing when rates are at a all time low may help you save money every month. If you have business property, this may bring down your payments to help you with other things (like marketing above). If you have a landlord, it may be harder to change your lease, but it is something that you many want to look at.
Of course, it may be time to schedule an appointment with me, your Denver small business lawyer. Stay tuned for next week’s blog post where I will talk about things you may need to see me about!
It is tax time! And that means an appointment with your CPA should be in your future. When you go in, here are some questions you should make sure to ask:
Should my tax entity status be changed? After preparing your taxes for 2011, your accountant should be able to help you determine whether the entity status for your business is the best or if you should change it. Remember, you have 75 days from the 1st of the year to submit a Form 2553 if you want to change your status to an s-corporation from some other entity.
Am I paying all the employment taxes I should be? Double check with your accountant that you are paying all necessary employment taxes so you don’t get a surprise later on. For instance, are you employed in Denver, Aurora or Greenwood Village? If so, are you paying the opportunity privilege tax? If you are an s-corporation, are you paying unemployment insurance? Are there any other taxes you aren’t aware of?
Would setting up a retirement plan help me? For some people, a retirement plan may save money on taxes and help prepare for retirement. However, for others it may not create that much of a tax break and spending the money elsewhere may be more beneficial. Ask your accountant what is best for you.
What other areas can I change to save more on taxes? There may be areas that you can save money and not even know it. For instance, this year there was a tax credit on some home improvements. If you needed them, it was a great time to do them. There may be tax breaks for hiring certain people, setting up a business home in certain areas or other things. Ask you accountant about your goals for next year and see if any of them can incorporate tax breaks.
Would refinancing help me? Whether it is your home, your business building, or a loan on equipment, you may want to see if refinancing would help you out. Ask your accountant about the current rates to see how much you would save.
Every year, I make goals. Get in shape, eat better, spend more time with my family, read more. However, I also try to make goals for my business. Here are five things to think about to help your business financially this year!
Keep mileage logs. This is one of the hardest things to do but will help if you are ever audited. The mileage rate for 2011 was 51 cents. Therefore, if you drove 300 miles a month, you could deduct $153.00 from your profit. That may not seem like much, but it adds up. And if you are like me, you probably drive a lot more than that each month. Check out next week’s multimedia blog for examples of good mileage logs.
Plan for retirement. Depending on the type of retirement account you set up, you can end up saving money now and be able to retire in the future. Speak with an investment advisor to see what is best for you. If you don’t have one, contact me and I can give you a few names to contact!
Ask about new tax relief. For the past several years, different bills have been passed at both the state and federal level giving tax breaks for different things. Talk to your accountant throughout the year to see if any tax breaks get passed or sign up for Google alerts on the topic.
Make sure you have a CPA! This is something that many small business owners overlook. Having a CPA make appear to be an expense you cannot afford, but a CPA will help you find areas to save on, make sure your taxes are prepared right, and give you advice throughout the year. If you don’t have one, contact me and I can give you a few names to contact!
Get accounting software. If you only have a few expenses each month, this many not be necessary. However, if you have a lot of expenses and income from multiple streams, accounting software (such as Quickbooks) helps you track where your money comes from, and where it goes!
This week, we look at the basics of LLCs and corporations. Please enjoy this YouTube video and if you have any suggestions for future videos, please comment on this post!
When you first meet with a business attorney to set up your business, it is best to come prepared. Below is a list of information I ask my clients to think about before coming in to see me for the first time:
Determine who is going to own the business. If you are unsure if you are going to own the business by yourself or with others, bring this up at your meeting as your business attorney can let you know some things to think about. Partnerships do work, but they take a lot of work.
Think about some names for the business. It is best to have 2-3 names ready when you come see your business lawyer. In many cases, the first name will work, especially if it is unique, but if there is someone already using the name for their business having more than one name ready ensures that you can get the ball rolling.
Note any expenses already incurred in setting up the business. Your small business attorney will need to know what type of expenses you have had and what type of expenses you foresee. Your small business attorney and your small business accountant will probably work together to determine what expenses are deductible and if one tax entity would make sense over another based on the expenses you have had and you foresee.
If you are interviewing business attorneys, have questions ready to ask about their experiences. For instance, I usually like to tell potential clients about other types of businesses I have set up, accountants that I have worked with, and information about my background if asked.
Have a list of your advisors on hand. If you have advisors, you should bring it with you. Even if you don’t have all the advisors you need, bring the ones that you have so that your business lawyer can help you fill in the gaps.
