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Category: Entrepreneurs

After a tight competition that included nearly 300 small business owners, Mazuma USA is thrilled to announce the winner of our first-ever $10K giveaway: Bruce Bassi, founder of TelepsychHealth.

Bruce BassiDr. Bassi started TelepsychHealth in 2018 to improve access to mental health services, providing patients with the resources, support, and help they need when and where they need it. Dr. Bassi’s goal is to improve the patient experience in a continuously changing industry. 

“There are a lot of people out there in a lot of pain and suffering, isolated and alone, and they need a lot of help,” Dr. Bassi says. “They don’t want to focus on the challenges of finding a provider and paying for a session. They just want to get better.”

About winning the $10,000 grand prize, Dr. Bassi says, “We will set this money aside in an account to fund services for low income individuals who need care but cannot afford it. Being able to see low income patients will greatly aid our mission of providing highest quality care to those who need it the most.”

Brandon LunsfordThe runner up for the competition was Brandon Lunsford, owner of Garden Of Eden Floral and Tea Room. Lunsford says his family is in the business of “delivering smiles” and helping people celebrate memorable moments, and he plans to use his $1,000 prize to expand his business.

Mazuma USA launched their $10K giveaway to bolster small businesses making a positive impact in their community. The top six finalists in the competition were featured on our Keep Going podcast as we celebrated their stories of hard work and success.

More than 10,000 people rallied behind these businesses, casting their votes to determine who should win the grand prize.

“We were overwhelmed with the response and thrilled to see so many people supporting and rallying around small business owners,” says Greg Nielson, Mazuma USA co-founder.

“Thank you to all who participated in our giveaway,” adds Ben Sutton, Mazuma co-founder. “We are excited to announce that we will be launching another $10,000 giveaway this year, and we will continue to celebrate the real-life struggles and successes of entrepreneurs in our Keep Going podcast.”

For details on how to apply for Mazuma’s 2022 giveaway, visit mazumausa.com/contest.

To listen to the remarkable stories of business owners like Bruce Bassi and Brandon Lunsford, visit mazumausa.com/keep-going.

This post was originally published on www.mothersniche.com.

Or in other words…”Do I really have to pay taxes on this?” Very common questions asked by budding bloggers and other side job Joes who start pulling in a little money on the side and wonder how much trouble they might have gotten themselves into. Well, I’m here to tell you, if you haven’t got a letter from the IRS or other State tax authority, then you’re not in trouble…yet. And really, when I refer to “trouble” I’m really just talking about a tax bill that you might not have been expecting. No one likes those surprises, ESPECIALLY the tax guy that has to inform people about them (excuse my self-pity).

In an attempt to eliminate all the cloudiness on the topic, here’s a brief rundown of the main concepts of small business taxation as it deals with a blog. Hopefully this shows you where the land mine issues are and helps you see whether they apply to you.

Is it Really a Business?

To put it straight, if a person or company is paying you for products or services, you’ve likely got a “business” on your hands. Unless you have no expectation of making a profit and don’t really spend much time and effort on it, then your blog is a business and the IRS expects you to report the activity on your tax return.

In addition to having to report the business activity on your tax return, business owners are also obligated to obtain a business license from the city or county in which they operate the business. Will a city official ever find out about the fact you are typing away on your blog to make money? Not likely…it’s certainly the “honor system” governing city and county business licenses.

OK, It’s a Business, Now What?

In order to report your business activity on your tax return, you’ve got to know what happened in the business. This means knowing how much money you received from customers and how much money you paid out to vendors. Money (or products/gift certificates/etc.) received equals “income”, money paid out usually equals “expenses” and the difference between the two is your “net profit” or “net loss”.

Since people hardly use cash these days, your bank statements (including Paypal statements) are usually the most reliable, complete source of your income and expenses. This is why setting up a business bank account is usually a great first step when starting a blog business…weeding through all the transactions in a bank account and determining what relates to the business and what doesn’t can be a nightmare.

As soon as you’ve added up all your income and expenses, by category, you are ready to plop them into the tax return. In a simple, nonexistent world, your summary may look something like this:

Total Income: $5000

Expenses

Supplies: $600

Internet: $400

Software: $200

Telephone: $500

Total Expenses: $1700

These numbers just need to go in the correct forms on the tax return, and voila! You’re taxed on the net profit of the business activity, which in the example above would be $3300 ($5000 – $1700).

What if I Chance It?

Well…let’s just say the IRS’ tax enforcement methods are a little more effective than copyright enforcement methods…the risk of getting caught not properly reporting taxes is much higher than the risk of getting caught copying your mom’s Christmas song CD. This is a result of tax reporting obligations placed upon those who pay you money…you’ve likely heard of 1099s before. It’s beyond the scope of this article to go into it…but have you ever heard of the NSA before? Be afraid…be very afraid…just kidding, sort of ☺.

If you decide to take a chance and ignore reporting the business activity on your tax return, here’s what you are up against…in addition to your conscience that is. The following penalties are added to the taxes you underreported.

Late filing penalty: 5% per month

Late payment penalty: 1% per month

Negligence (meaning ignoring your obligation to understand): 20%

Fraud: 75%

Minimizing Taxes

There are of course tips and tricks to making sure you pay as little taxes as possible. Those revolve around legally deducting as many expenses as you possibly can. Making sure you don’t miss or forget about any expense transactions is the first step, which is most effectively accomplished by reconciling your bank statements for the whole year using accounting software, or a spreadsheet. Here is a short list of things you wouldn’t want to forget:

  • Home office deduction
  • Car and travel costs (mileage)
  • Internet service fees
  • Software
  • Telephone, fax
  • Office furniture
  • Computer equipment
  • Supplies
  • Advertising
  • Subscriptions
  • Equipment (like cameras, tools, etc)
  • Professional services
  • Contest prizes
  • And a multitude more…

Other measures to minimize taxes can be taken if your circumstances warrant them, such as forming a corporation and making yourself an employee of your own business.

What About LLCs and Stuff?

LLCs or S Corps are the two most commonly used small business entity structures. While the scope of consideration on which to choose is beyond this article’s intent, suffice it to say they both can provide you liability protection and may or may not achieve the tax benefits you are looking for. The two biggest indicators of whether you should look into forming an LLC or S Corp are probably, one, the amount of money you are making, and two, how many owners of the business there are.

If I had to throw a number out there, I would suggest investigating the idea as soon as your net profits exceed $10,000. And if there are any other owners of the business (maybe besides your spouse) it is good to consider formalizing the business with an entity structure.

You set up a business entity by filing an application with the appropriate State agency. Nothing is filed with the IRS at the time of formation, besides an application for an Employer Identification Number.

I’m a big DIY advocate…don’t pay somebody for something you can do well on your own. But safely making the decision about whether to incorporate your business or not probably requires about 50 hours of education and research. So I’m going to go with the cliché statement in this case…you really should discuss your circumstances with a lawyer or CPA before setting up one of these entities.

Conclusion

I’m a firm believer that true freedom can only be experienced by the self-employed. I hope this article has at least brushed over some the questions you’ve had about the topic of what it means to have your own business.