Jake Snelson - Vyde

How to Create a Positive Work Environment: Put Employees First

Employees are the lifeblood of your business; however, they’re constantly fighting for that recognition. Employers don’t put employee first; customers, management and boards all come before employees. By putting employees last on the totem pole, many companies are hurting their profits.

Businesses Put Customers First

Many business owners set up their business model with a focus on the customer. It makes sense, if customers are happy, then they’ll recommend you to other people and your business will grow.

It makes sense to put the customer first, but business owners often forget to take the middleman into account. Employees are the face of your company. They’re the ones interacting with your customers. You want them to be singing your praises to your customers.

Customers also enjoy getting to know your team. they notice when there is a lot of turnover and they start to question how great a company can be if they can’t seem to keep employees around.

Instead of putting your customer’s needs above your employees, put your employees first. Treat them well. Show them you care. If they feel taken care of, then they’ll take care of your customers.

Businesses Put Management First

There is often a divide between management and employees. Even when management works closely with their employees they don’t always see the divide.

Members of management are invested in the company. Their pay and benefits are different from the employees below them, so they have a lot more reason to be invested in the company. Usually, management believes that they are taking care of their employees, but employees don’t see things the same way.

In order to put the employee’s needs first, you should foster an environment that encourages feedback. Employees should feel like they can talk with management and make suggestions that could help. If your employees feel they can’t talk about issues without being punished, then you’re creating a terrible work environment and it could lead to a lot of employee turnover.

Businesses Should Put Employees First

When employees feel used or unappreciated they don’t perform to the best of their ability. Instead of putting your employee’s needs on the back burner put them first. Make sure they are taken care of and then watch everything else fall into place.

Read the other posts in this series:

Encourage Employee Feedback

Offer Developmental Opportunities

Acknowledge Success

What is Gift of Equity? in Real Estate Deals

Understanding ‘What is Gift of Equity?’ Learn how family members can sell property below market value, impacting real estate transactions. Dive into its significance and potential tax implications for buyers and sellers.

What are Gifts of Equity?

A gift of equity is when family members sell property to other family members for less than market value. The gift of equity is specifically the difference between the market value and what the buyer pays. A gift of equity can be for any amount, up to the total value of the home.

Gifts of equity don’t necessarily have to be from family members. Anyone who you’ve had a relationship with can qualify for a gift of equity.

Most lenders will allow the buyers to use the gift of equity as the down payment for the purchase. Both the buyer and the seller must sign an equity letter.

A gift of equity can have tax implications for both parties. The seller may have to pay capital gains taxes on the gift of equity. The buyer’s asset cost basis would be based on the market value not what the property was purchased for.

Gifts of Equity Scenario

Jack is looking to buy a home. His grandparents are preparing to downsize and are offering to sell him their home. Jack’s grandparent’s home appraised for $250,000. Jack can’t afford to pay that right now.

To help Jack out, his grandparents are offering to sell him their home for less than market value. Jack can pay $190,000 for his grandparent’s home. His grandparents agreed to sell him the home for $190,000.

Because Jack is related to the seller and they’re selling the house for less than market value it qualifies as a gift of equity. The gift of equity is for $60,000, which is the difference between the market value and what Jack is buying it for.

When Jack goes to get his loan he will submit an equity letter from his grandparents stating the amount of the gift, that there are no repayments expected or required and the donor’s information.

Another bonus of the gift is that Jack won’t have to put down a down payment because the $60,000 gift of equity qualifies as his 20% down payment.

Jack will have to meet any other requirements the financial institution where he gets his loan at requires to document the gift of equity.

A gift of equity offers an avenue for family or certain relationships to facilitate property transactions below market value. It serves as a significant financial benefit, allowing buyers to potentially use it as a down payment, minimizing upfront costs. However, it’s crucial to note the potential tax implications for both parties involved—the seller may encounter capital gains taxes, while the buyer’s asset cost basis aligns with the property’s market value. Despite its advantages, understanding the intricacies and tax considerations is vital before utilizing a gift of equity in real estate transactions. Always consult with professionals and adhere to the requirements of financial institutions when applying this concept in property purchases.

1. Who can provide a Gift of Equity?

Family members or individuals with a relationship can offer a gift of equity. It involves selling property to others below market value, with the difference acting as the gift.

2. How is a Gift of Equity utilized in real estate transactions?

Lenders often permit using the gift of equity as a down payment. Both buyer and seller must sign an equity letter detailing the gift’s value.

3. Are there tax implications associated with a Gift of Equity?

Yes, both sellers and buyers may face tax implications. Sellers might encounter capital gains taxes, while the buyer’s asset cost basis depends on the property’s market value.

4. Can anyone besides family members provide a Gift of Equity?

Yes, individuals with an established relationship can qualify for a gift of equity, enabling property transactions below market value.

5. How does a Gift of Equity impact down payments in real estate purchases?

A gift of equity can serve as a down payment. For instance, if the gift represents 20% of the property’s value, the buyer may not need additional down payment funds.

Who Can I Claim as Dependents on my Taxes?

Claiming dependents on your taxes helps to lower your taxes. It’s a great way to get money back for the expenses of caring for children or other adults.

Each qualifying dependent can reduce your taxable income by $4,050. In order to take that deduction, you have to understand who qualifies as a dependent. That’s what we’re here for!

Is My Spouse a Dependent?

Simply put, you should never claim your spouse as a dependent. It doesn’t matter if your spouse is employed or not, spouses aren’t dependents.

Instead of claiming your spouse as a dependent you should file jointly. When you file jointly you get the exemptions, which would be the same as claiming a dependent.

Are My Children Dependents?

Children can be claimed as dependents. In order for a child to qualify as a dependent they must meet the following requirements:

The child must be related to you. They don’t have to be a biological child, but they must be related. Step-children, adopted children, nieces, nephews, brothers or sisters all qualify.
Be under the age of 19; there are two exemptions to this. The first exemption is that a dependent can be claimed as child if they are permanently and totally disabled. The second exemption, is if a child is under the age of 24 and going to school for at least 5 months out of the year they can be claimed as a dependent.
The child must live with you. Again there are two exemptions. If a child is living with another parent, in the case of divorce, you can still claim them.
The child cannot be self-supporting. They must be dependent on you, obviously.

Are My Parents Dependents?

If you are taking care of your parents, then you can claim them as dependents. Your parent don’t have to be living with you in order to be claimed as dependents. If you are financially supporting them then you can claim them.

In order to qualify as a dependent you must pay for at least half your parent’s expenses. If more than one party is supporting the dependents, then you all must decide who is going to claim your parents.

Another requirement is that the dependent’s taxable income must be less than $4,00.

If you are taking care of your in-laws you can claim them as dependents, but only as long as the marriage exists. If the marriage ends by divorce or death then you cannot claim your in-laws.

Can I Claim My Pet as a Dependent?

It doesn’t matter if your dog is your best friend, or a loved member of your family, the tax man doesn’t consider your dog as a dependent.

Despite the fact that your pet is completely dependent on you, the IRS doesn’t allow taxpayers to claim pets as dependents. The rationale behind this rule is that human dependents will eventually become taxpayers, while animals will not.

What is a Federal Tax Lien?

A federal tax lien is used to put a lien on property, or any other assets, as collateral for unpaid back taxes. The Internal Revenue Service (IRS) can issue federal tax liens to secure payment of those unpaid back taxes.

A federal tax lien does not allow the government or the IRS to seize any assets. The government has to issue a tax levy in order to seize any property.

When the IRS places a federal tax lien, they tell all states and creditors that they are placing a lien and they are first in line for any payments. If a federal tax lien is placed against you, it will significantly lower your credit.

You can learn more about how federal tax liens can affect you on the IRS’ website.

Federal Tax Lien Scenario

Doug is a small business owner. He hasn’t paid his personal taxes in five years. The IRS has filed a federal tax lien against Doug to try and get him to pay his back taxes.

The first step the IRS will take will to be to notify Doug’s other creditors; the federal tax lien takes precedence over any other creditors. Then, the IRS will place the federal tax lien against his bank accounts, car, home and against his small business business. Although Doug has paid his business taxes, the IRS can still hold a lien against his small business for payment on his personal taxes . Once the federal tax lien is issued it will also lower Doug’s credit score. This will make it more difficult for Doug to take out any new loans.

Doug have three options in order to have the federal tax lien removed. The first option is to pay off the debt in full. The second option is to get the debt dismissed in bankruptcy court. Finally, debtors can reach a settlement with the IRS to pay or forgive the debt.

Doug is the sole proprietor of his small business so it is considered an asset that the IRS can go after when trying to get him to pay his back taxes. If Doug decides to choose to declare bankruptcy the IRS will asses if his business to determine if it has any value. If they determine that there is value in the business, then it can be taken. However, if there isn’t value in the business then the IRS won’t go after it and Doug could continue to run his business after the bankruptcy.

In order to make sure he can still run his business, Doug chose to pay his back taxes. The IRS will release the lien 30 days after the debt it paid in full.

Frequently Asked Questions

1. What is a federal tax lien?

A federal tax lien is a legal claim made by the Internal Revenue Service (IRS) on your property and assets due to unpaid back taxes. This lien serves as collateral to ensure payment of the owed taxes. While it does not allow the IRS to seize property, it establishes the government’s priority over other creditors for payment.

2. How does a federal tax lien affect my credit score?

When the IRS places a federal tax lien against you, it notifies all states and creditors, establishing its priority for any payments. This action significantly lowers your credit score, making it more challenging to secure new loans or credit. The lien remains on your credit report until the debt is fully paid or resolved.

3. Can the IRS seize my assets with a federal tax lien?

No, a federal tax lien itself does not grant the IRS the authority to seize your assets. For asset seizure, the IRS must issue a tax levy. A lien simply secures the government’s interest in your property as collateral for the unpaid taxes.

4. How can I get a federal tax lien removed?

There are three primary ways to remove a federal tax lien:

Pay the Debt in Full: Once the debt is fully paid, the IRS will release the lien within 30 days.
Bankruptcy: In some cases, debts may be discharged through bankruptcy, potentially removing the lien.
Settlement: You can reach a settlement with the IRS, such as an Offer in Compromise, to pay a reduced amount and have the lien removed.

5. Can a federal tax lien affect my small business?

Yes, if you are a sole proprietor, your small business is considered a personal asset and can be subject to a federal tax lien for your personal unpaid taxes. The IRS can place a lien on your business assets, affecting your ability to operate. In the case of bankruptcy, if the IRS determines your business has value, it may seize it. However, if the business lacks significant value, you might be able to continue operating post-bankruptcy.

What is the Earned Income Credit?

The Earned Income Credit (EIC) is a tax credit for low to moderate income earners. In order to qualify for the Earned Income Credit, you must file a tax return, even if you are not required to file taxes. Those who file for an Earned Income Tax Credit may receive a tax refund if their taxable income is less than the credit.

Qualifications for the Earned Income Credit include:

Earned income by working for someone else, or by owning your own business
Meet the rules for a qualifying child
Meet certain income levels (You can find those levels on the IRS site.)
File as Married filing jointly, Head of household, Qualifying widow or widower, or Single. If you file as married filing separately, you do not qualify for the Earned Income Credit.

Earned Income Scenario

Jerry and Ellen Johnson are husband and wife; they have two children. Jerry works for an established company as a contractor and Ellen just started her own Etsy business. Together, Jerry and Ellen earn $50,000 a year.

The Johnsons file as married filling jointly on their personal taxes. This means that they file their total income on one tax return. Jerry and Ellen claim the Earned Income Credit because they earn less than the two child max of $50,198 a year.

By filing for the earned income credit they are able to lower their taxable income on their personal taxes. They may even be eligible for a tax refund after they count any other deductions or credits.

The Earned Income Credit only applies to Jerry and Ellen’s personal taxes. When Ellen files her business taxes for the business she owns she will not include the Earned Income Credit.

How to Create a Positive Work Environment: Encourage Employee Feedback

Employee feedback is an important aspect of creating a positive work environment. In order to thrive, employees need to know how you view their performance and they need to know that they have a voice within the company.

The following tips can help you foster an environment where your employees can take and receive constructive criticism.

Hold Employee Reviews

The first part of encouraging feedback is to set the precedence. Hold review opportunities where you can discuss how your employees are doing. Be sure to praise their good work, but also don’t be afraid to give constructive criticism. A good employee will be open to constructive criticism because they’ll want to improve.

Another great way to show your employees you care is to ask about their goals both professionally and personally. When you show your employees that you care about them, they will feel valued and will treat you and your business with more respect.

Be Open to Employee Feedback

During the performance reviews allow your employees to tell you what is working or not working for them. A lot of times employees are able to see issues with day to day operations that you don’t see.

Listen to the concerns of your team members. Ask them for solutions to the problems they see. Do not get offended when they tell you that something isn’t working. When you are open to hearing constructive criticism of your business you can make it a better place to work.

How to Effectively Give Feedback to Your Employees

Because giving and receiving feedback can be a touchy subject it’s important to make sure you address it in the best way. Here are a few do’s and don’t’s of employee feedback.

Do

Compliment efforts of your employees
Set clear expectations; that way your employees know what they need to do to succeed.
Ask for solutions to problems.
Hold your employees accountable for what you have discussed.
Follow up with employees after they’ve voiced a concern. Sometimes they are wrong about something, but let them know you looked into their issues.

Don’t

Get mad when employees express how they feel. Your employees are trying to improve your business, not demean it (or you.)
Ignore suggestions. Take all employee feedback and suggestions as sincere ways to help your company.
Wait for formal reviews to give feedback. Let employees know how they’re doing on a regular basis.
Use performance reviews as a way to put down employees. Make reviews a positive experience.
Don’t give negative feedback in front of other employees. It doesn’t help foster a positive work environment if you’re critical of employees in front of each other. Instead, give compliments around others and critique privately.

Keep in mind that 69 percent of employees say they would work harder if their work was recognized. By giving and accepting employee feedback you can improve the atmosphere of your business.

Read the other posts in this series:

Put Employees First

Offer Developmental Opportunities

Acknowledge Success

Which Social Media Platforms Are Best for Marketing My Business? Part 2

As we discussed in Which Social Media Platforms Are Best for Marketing My Business? Part 1, social media marketing is a confusing but important aspect of any successful marketing strategy. We’re going to cover how using email lists, Google+ and Pinterest can increase your reach.

Email Lists

Email lists are a vital part of social media marketing. The best part of an email list is that you control it. When you build a large following on social media platforms they have power over how many people see your posts. However, when you create an email list you can reach every single customer in a direct and personal way.

There are a lot of options of email marketing providers. You can choose your provider depending on the size of your company and how many subscribers you have. Another important aspect of email lists is having opt-in options on your website. You’ll want to make sure that your opt-in is highly visible and has a grabbing call to action so hat tells your customers what kind of value they’ll get from your emails.

Google+

Google+ may seem like just another social media channel, but it carries a lot of weight. As a Google product, Google+ can benefit your website’s search engine optimization while still connecting with customers. In order to get the most out of Google+ here are a few best practices:

Interact with other companies and people. Google values genuine engagement, so don’t just engage for the points. Engage and build relationships. It will help you grow your business.
Use Hashtags. Hashtags are viable across all social media channels, but they are especially helpful with Google+. Because hashtags are used in searches it can increase your odds of being found.
Connect your website with your Google+ account. Google ranks websites based on connections to social media platforms, so make sure you’ve linked the two together.
Design is an imperative element to all social media, not just Google+. Make sure your profile and cover photos are eye catching and designed using the correct dimensions. You should also be posting well-designed images that draw people into your page.

The biggest misconception about Pinterest is that it’s just a social media channel. When in fact, Pinterest is a search engine. It is quickly becoming one of the top search engines.

Every pin you produce should be keyword optimized, just like your website. The best place to use your keyword is in your image title and pin description. An easy way to make sure your keyword is in your pin description is to write out your pin description as the image’s alt description. Pinterest automatically pulls the alt description and makes it your pin description. You should also keyword optimize your board descriptions in order to increase your followers.

Hopefully, these tips will help you with your social media marketing for your small business. If you have any questions about social media marketing, please let us know and we are happy to help!

Frequently Asked Questions

1. Why is building an email list important for social media marketing?

Building an email list is crucial because it allows you to directly and personally reach your audience without relying on social media algorithms. Unlike social media platforms, where visibility can be limited, an email list gives you control over your communication with customers, ensuring your messages reach their inboxes.

2. What are some best practices for using Google+ to enhance my marketing strategy?

To maximize your Google+ marketing efforts, follow these best practices:

Interact genuinely with other companies and individuals to build relationships and grow your business.
Use hashtags effectively to increase your visibility in searches.
Connect your website with your Google+ account to improve your search engine rankings.
Ensure your profile and cover photos are visually appealing and correctly sized.
Post well-designed images to attract more attention to your page.

3. How can Pinterest be used as a search engine for marketing?

Pinterest functions as a search engine, making keyword optimization essential. To leverage Pinterest for marketing:

Optimize your pins with relevant keywords in the image title and pin description.
Write out your pin description as the image’s alt description for automatic inclusion.
Optimize your board descriptions to increase visibility and followers.

4. What are the benefits of email marketing providers and opt-in options?

Email marketing providers offer various tools and features to manage your subscriber list based on your business size and needs. Opt-in options on your website, if prominently displayed with a compelling call to action, can significantly grow your email list by offering clear value to potential subscribers.

5. How does engaging on Google+ impact search engine optimization (SEO)?

Engaging on Google+ can positively impact SEO by:

Increasing your website’s ranking through social media connections.
Enhancing your online presence and authority through genuine interactions and relationship-building.
Utilizing hashtags and optimized content to improve your visibility in searches.

What is a Tax Deduction?

A tax deduction is a credit that is subtracted from your income, which lowers your taxable income. The Internal Revenue Service (IRS) allows taxpayers to take a standard deduction or an itemized deduction.

A standard tax deduction is set by the IRS each year. Taking a standard tax deduction doesn’t require any record keeping or proof of deductions. It’s the simplest way to take deductions. Standard deductions are only available on personal taxes.

While the standard deduction is easy, it’s not always the best option. An itemized tax deduction allows you to calculate all of the deductibles that you qualify for, which could be higher than the standard deduction. The IRS offers deductions for the following categories:

Health care costs (medical, dental, prescription drugs)
Income taxes or sales taxes
Property taxes
Mortgage interest
Personal property taxes (like vehicle registration fees)
Interest on investments
Charitable contributions
Losses due to theft or casualty
Job-related expenses
Union dues
Tax preparation fees
Home office expenses
Gambling losses

In order to take an itemized tax deduction, you must keep detailed records so that you can prove you are eligible for the deductions. For business tax deductions you must do an itemized deduction; there is not a standard deduction.

Tax Deduction Scenario

Doug Chambers is a small business owner, who runs a creative business out of his home.

Doug takes advantage of tax deductions each year to lower his taxable income and to save money. Because he is a home owner, Doug can take a deduction on his property taxes and his mortgage interest. He also has a family insurance plan. All of these can be claimed as deductions on his personal taxes. Because Doug runs his business out of his home, he can claim his home office as a tax deduction. He can also claim his marketing & advertising costs and unpaid invoices as business deductions.

Doug has two options for his personal taxes, he can take the standard deduction of $9,350, which is the standard the head of household deduction. Or because Doug qualifies for several deductions he can choose to do an itemized deduction.

If Doug chooses to do an itemized deduction he needs to provide his accountant with all his records so that they can determine if claiming the itemized deduction will be more beneficial.

Because business taxes only allow standardized deductions, Doug must provide documentation for each of the deductions he wants to take.

Overall, Doug is able to lower his taxable income for his personal and business taxes.

What are My Mileage Deduction Options? Plus a Free Mileage Log

If you’re a small business owner who drives a lot for work, then claiming a mileage deduction on your taxes is a great way to save money.

There are two options when you’re claiming a deduction for mileage. You can choose to claim a standard mileage deduction or you can calculate the actual costs of using your vehicle for business.

The IRS announced the 2017 standard milage rate as:

53.5 cents per mile for business miles driven, down from 54 cents for 2016
17 cents per mile driven for medical or moving purposes, down from 19 cents for 2016
14 cents per mile driven in service of charitable organizations

Mileage deductions can be taken for business, charitable, medical and moving purposes.

There are two important factors to track if you want to use a mileage deduction. First, you need to track your actual miles. This is important so that you know how much you can deduct at tax time. Second, you need to track the reason for your trip.

Take John, for example, John is a real estate agent who drives his car to show houses. John tracks of how far he goes and what the purpose for the trip was. That way when it comes time to pay taxes John knows exactly how much he can deduct. John tracks the purpose of each trip as well. If the IRS ever audits John he has proof that the miles he claimed were for business purposes.

To help you out we’ve create a Free Mileage Log so that you can keep track of your miles. Grab our Mileage Log and keep it in your car so you can mark down each of your business trips.

How to Create a Positive Work Environment: Offer Developmental Opportunities

Great employees are a critical part of creating the business of your dreams. But you don’t get great employees without a little bit of effort. You can draw in great employees if you offer developmental opportunities.

A great employee is driven. He is hard-working and strives to exceed expectations. A great employee is happy. She works to improve herself so she can improve the company.

In order to keep great employees you, as a business owner, need to provide opportunities for your employees to grow and develop new skills.

Offer Growth Opportunities

The number one complaint that employees have about moving forward in their careers is that their companies don’t provide opportunities to move up in the company.

If you have a great employee, then do your best to keep them. Offer them growth in their current position or allow them to move to another position where they will exceed. You can create loyal, hard working leaders who are incredibly invested in your company’s success. The outside hire should be your last option.

Offer Educational Opportunities

One of the more obvious ways of offering developmental opportunities for your employees is to help them with continuing education.

If an employee shows a lot of potential, but doesn’t have the education needed to fill a certain position, offer to help pay for schooling. It’s a great way to show employees that you are invested in them and then they become more invested in your company. Just make sure that you work up an agreement stating that the employee will continue with your company after they finish school.

Paying for your employees to attend conferences or seminars that support their positions is another way you can offer development opportunities. Conferences and seminars are also a great way to get employees excited about their jobs. Most likely, they’ll come back more energized and more productive. It’s a win-win for you and your employee.

You may even be able to count educational opportunities as tax deductions; just check with your accountant first.

Offer Networking Opportunities

Creating networking opportunities sounds like it’s a way for other business owners to poach your employees; however, it’s actually a great way to broaden your circle of influence.

As you’re working to offer developmental opportunities, you should let your employees lead. Allow them to get out in front of other business professionals and encourage them to build a network of people that they can work with. Once they’re on their own they’ll learn to build relationships that can benefit the entire company.

When you see your employees networking and promoting your company make sure you acknowledge it and encourage them. That will help them feel more confident, which in turn creates a better employee.

Read the other posts in this series:

Put Employees First

Encourage Employee Feedback

Acknowledge Success

FAQs: Attracting and Retaining Great Employees

Why are great employees critical to creating a successful business?

Great employees drive business success by working hard, striving to exceed expectations, and continuously improving themselves and the company. Their dedication and productivity are essential for achieving business goals.

What can business owners do to retain great employees?

Business owners can retain great employees by providing opportunities for growth and development. This includes offering chances for career advancement, educational support, and professional networking.

How can offering educational opportunities benefit employees and the company?

Offering educational opportunities, such as paying for schooling, conferences, or seminars, shows employees that the company is invested in their growth. This investment often leads to increased loyalty, energy, and productivity, benefiting both the employee and the company.

What is the importance of networking opportunities for employees?

Networking opportunities allow employees to build relationships and broaden their circle of influence, which can benefit the company. Encouraging employees to network can boost their confidence and improve their ability to promote and represent the company effectively.

How can companies ensure that educational opportunities are mutually beneficial?

Companies can create agreements that employees will remain with the company for a certain period after completing their education. This ensures that the investment in their education benefits both the employee and the company, fostering a loyal and skilled workforce.

Resources

Author: Jake Snelson

Businesses Put Customers First

Businesses Put Management First

Businesses Should Put Employees First

Read the other posts in this series:

What are Gifts of Equity?

Gifts of Equity Scenario

Is My Spouse a Dependent?

Are My Children Dependents?

Are My Parents Dependents?

Can I Claim My Pet as a Dependent?

What is a Federal Tax Lien?

Federal Tax Lien Scenario

Frequently Asked Questions

What is the Earned Income Credit?

Earned Income Scenario

Hold Employee Reviews

Be Open to Employee Feedback

How to Effectively Give Feedback to Your Employees

Do

Don’t

Read the other posts in this series:

Email Lists

Google+

Pinterest

Frequently Asked Questions

What is a Tax Deduction?

Tax Deduction Scenario

Offer Growth Opportunities

Offer Educational Opportunities

Offer Networking Opportunities

Read the other posts in this series:

FAQs: Attracting and Retaining Great Employees