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Category: Mazuma Accounting

How to Save Money on Your Taxes if You Were Uninsured in 2015

If you were uninsured in 2015, you may owe a penalty on your taxes this year. However, you can still save money by claiming an exemption, which about 70% of Americans are doing in 2016. A whopping 300,000 people who paid the penalty last year would have qualified for the exemption, according to the IRS. No worries, Mazuma won’t let that happen to you. Here is the good news and the bad news about being uninsured in 2015.

Here’s the bad news first: the penalty has increased since 2014. The penalty for being uninsured in 2015 is $325 per adult and $162.50 per child (up to $975 for a family) or 2% of household income, whichever is greater. Yikes. You’ll sometimes hear this penalty called the  “individual responsibility payment.” If you went without coverage for only part of 2015, you’ll only owe part of the fee.

There is good news, though! For some Americans who do not already have insurance through their employer, their parents, Medicaid, Medicare, the Veterans health care program, individual insurance, or healthcare.gov– you may be exempt.

The Affordable Care Act allows certain people to claim exemptions, even if they were uninsured in 2015. These people may be followers of particular religious groups, members of Native American tribes, and people who do not meet the minimum income requirement, leaving them unable to afford healthcare coverage.

For the most part, if you were uninsured in 2015, you’ll have to pay the penalty. But, here’s a list of specific cases where you may be able to get an exemption.

Exemptions include:

  • You’re uninsured for less than 3 consecutive months of the year
  • Your lowest-priced coverage option is more than 8% of your household income
  • You don’t have to file a tax return because your income is under the IRS filing requirement ($10,000 if single, 20,000 married filing jointly)
  • You’re a member of a federally recognized tribe or eligible for services through an Indian Health Services provider
  • You’re a member of a recognized health care sharing ministry
  • You’re a member of a recognized religious sect with religious objections to insurance, including Social Security and Medicare
  • You’re incarcerated, and not awaiting the administering of charges against you
  • You’re not lawfully present in the United States,
  • You may qualify for the Cancellation Hardship Exemption if you received a cancellation notice due to your health plan not meeting minimum requirements.
  • You also may qualify for a hardship exemption if your circumstances affected your ability to purchase health coverage

(List from Intuit.)

Still not sure if you qualify for an exemption? Give Mazuma a call, we can help.

Succession Plan for My Small Business

How do I Create One A Succession Plan for My Small Business?

 

When you start a small business, it’s important to consider and anticipate possible changes in the future. A well thought out succession plan can ease the process of change as your business evolves.

What is a Succession Plan?

How Do I Create a Succession Plan

A succession plan is basically a written plan that outlines how one leader will replace another within a business in the future. Positions of leadership are often–though not always– filled internally, with people who have the potential to improve upon their current position and assume a leadership role.

How a leader exits a business and how that change is managed reveals the character and effectiveness of the business as a whole. As a small business owner, you’ll want these transitions to go as smoothly as possible. A clearly defined succession plan in any small business not only reduces potential conflict, but it increases the availability of capable employees that are prepared to assume leadership positions. It also helps with employee retention and motivation, especially if employees see a clear path to advancement in their future.

How Do I Create a Succession Plan for My Small Business?

  • Assess internal candidates first. These are the people who know your business best. It doesn’t always mean they are the best fit for the job, but it’s a good idea to start analyzing a group of people you already know and trust to possibly fill leadership positions within your company. Try to view all employees objectively in this process. Note the positive characteristics that could make each candidate a leader, while also taking notice of the characteristics that could hinder their ability to take on a larger role within your business.
  • Develop a written criteria.
  • Consider all stakeholders. As you are developing a succession plan for your small business, consider how a change in the leadership will affect the other employees that work for you, as well as your business partner if you have one. Ponder these questions as you develop your succession plan:
    • Is there an emergency candidate who could take the reins if you were to leave tomorrow?
    • Who do I need to invest in today so that he or she will be prepared to take on a leadership role in the future? How do I best prepare this person?
    • Is the company organized enough to ease the transition of a new leader?
    • Is there a seasoned leader in place who is willing to coach a potential successor?
  • Prepare the potential leadership candidates. Perhaps the most neglected step in the succession planning process is to prepare the candidate after he/she has been chosen. There is no such thing as a “ready now” candidate; all will need mentoring and training to assume a leadership role. Make sure the candidate for the position has the support they need to learn, grow, and stretch their capabilities to assume a role that will include more stress and responsibility.
  • Refresh as needed. Your succession plan should be a living document that is changed and modified as market conditions and/or strategy change. It should go beyond the traditional position description and delve deeply into both the competencies and experiences required for the next leader. The succession plan can then be used as a tool in grading succession candidates objectively.

Your succession plan should be a living document

When in doubt, consult a professional. An accountant or attorney can provide a fresh, objective viewpoint and can advise you on the potential profitability of certain candidates. Developing a solid succession plan now can help ease the transition of changing roles later on.

FAQs for Small Business Succession Planning:

What is a Succession Plan?

A succession plan outlines how leadership transitions will occur within a business in the future, often internally, to ensure smooth changes.

How Do I Create a Succession Plan for My Small Business?

Start by assessing internal candidates objectively, develop written criteria, and consider all stakeholders to prepare potential leaders effectively.

Why is Succession Planning Important for Small Businesses?

It reduces conflict, boosts employee retention, and ensures a pool of capable leaders for future growth, fostering a smoother transition.

How Do I Prepare Potential Leadership Candidates?

After selection, provide mentoring and training to prepare candidates for increased stress and responsibility, ensuring they’re ready for leadership roles.

When Should I Refresh My Succession Plan?

Regularly update your succession plan to reflect changes in market conditions or strategy, ensuring it remains an effective tool for identifying and grooming future leaders.

 
 
 

Kickstart Your Small Business in 2016: 11 Things To Do Annually For A More Successful Business

As 2015 comes to a close, you have an opportunity to reflect on the past year with your small business. What worked? What disasters did you encounter/overcome? What was the one thing you knew you should do for your small business but could never find the time? Now is the time to make a plan for an even better business year in 2016 and crush the goals you set for yourself.

In order to conquer the small business world next year, there are a few logistics to take care of first. We’ve put together a quick and easy checklist of things to do and take care of in January so you have 11 full months of small business bliss. Download the printable version, here.

 

kickstart2016

Q&A: My 6 month extension on my corporate business taxes is due on 9/15. Help!

Businessman and Businesswoman at Work

If you filed a 6 month tax extension with the IRS for your corporate business taxes back in April, it probably seemed like October 15th was eons away. However, that rapidly approaching October 15th deadline may have you feeling a little stressed out. If you filed a tax extension and still haven’t finished your tax return, here’s what you need to do:

  1. If you owe a tax bill to the IRS, make sure you paid it when you submitted your 6 month corporate business tax extension. If you didn’t pay your tax bill then, that is the most important thing to take care of. The sooner you make that payment to the IRS, the less penalties and interest you will have to pay.
  2. Start your return now. Don’t wait until October 14th to start on your tax return and then rush through it. Give yourself time to gather the proper documents and file your corporate business taxes accurately. Corporate business taxes can get complicated in a hurry with multiple forms to fill out; it’s best to take your time and do it right the first time so that you don’t have to worry about filing an amended return later on.
  3. E-file or send your tax return to the IRS by October 15th. The IRS does not accept e-filed tax returns after October 15th and mailed tax returns must be postmarked by this date as well.
  4. Contact a CPA. They can help you gather needed tax information, accurately fill out your tax return, and file it for you. They can even help you set up a payment or installment plan with the IRS if you cannot make your full payment right away. Vyde accountants can help you file your corporate business taxes with the IRS before the October 15th deadline. Contact an accountant with any questions you may have about your tax extension.

Other posts that might interest you:

6 Reasons Why Filing a Tax Extension with the IRS is a Good Decision

Top 10 Things You Should Do If You File a Corporate Business Tax Extension

Q&A: How to file a corporate business income tax extension with the IRS

Q&A: Do I need to request a state tax extension if I filed an IRS tax extension?

Q&A: What if I can’t file my corporate business taxes by my IRS tax extension deadline?

Q&A: Can I file a second IRS tax deadline extension for my corporate business taxes?

Q&A: How do I file an amended tax return for my business?

Q&A: What if I missed the IRS tax extension deadline?

Mazuma’s Story

Mazuma’s Story

Benjamin Sutton, CPABenjamin Sutton, CPA and Mazuma Managing Partner, was sitting in his ridiculously overpriced chair at a large accounting firm a few years ago, contemplating his future as a six figure partner with a time share in Hawaii.

He unsuspectedly came across an article about a start-up accounting firm in the UK who built an offering around affordable small business bookkeeping and tax services. The article argued that a firm with a little more heart (in terms of billing rates) and a focus on small business bookkeeping and tax preparation could provide a needed service to a group that represents over 90% of all companies. Ben’s heart grew three sizes that day and he convinced his wife this was the right thing to do.

In 2011, Mazuma USA opened its doors with an extremely efficient business model based entirely on small business bookkeeping, tax preparation and payroll services. Business owners simply upload their bank and credit card statements, receipts, and invoices each month. Mazuma does all the work, and the owner receives a clean and accurate monthly Income Statement (P&L), Ledger, and Balance Sheet. It couldn’t be easier, and definitely not cheaper.

Since the clients’ books are being managed all year by Mazuma, year-end taxes are a breeze. This allows Mazuma to prepare their clients’ taxes for the same flat-rate fee. Not to mention, the Mazuma accountants are aware of their clients’ every expense and deduction, giving them a leg up on providing the best return and tax advice.

If this all sounds too good to be true, try Mazuma free for one month. Click here to start.

Mazuma’s 3 Year Anniversary

Mazuma is turning 3! And, we’re doing the hula accountant-style over here because we’re celebrating another great year. We couldn’t have done it without you. We started with the idea that small businesses need simple, affordable accounting and because of you and the family, friends and colleagues you’ve referred to us we’ve grown. Thank you for entrusting us with your accounting.

There are all kinds of wonderful going on this week and you’re invited to participate in them all.

MAZUMA ANNIVERSARY SWEEPSTAKES

WIN A $25 GIFT CERTIFICATE TO YOUR FAVORITE RESTAURANT/STORE
ENTER BOTH CONTESTS FOR TWO CHANCES TO WIN

Say Cheese!

Grab your purple envelope and smile! Take a photo of you and your purple Mazuma envelope, add it to Facebook with a caption telling the world about your feelings for Mazuma. Share it with Mazuma to be entered into the contest. Want some free publicity? Stand by your business sign or hold up your bcard in the photo.
Be a Mazuma Star!
Tell your Mazuma story. Review and share Mazuma on Facebook to be entered into the contest.

Not a facebook groupie? Send us an email with your review and photo to be entered in the contests or post it to google.

MAZUMA STYLE TRAINING VIDEOS LAUNCHED
As part of Anniversary Week, Ben Sutton taped a three part series exposing the real secrets of accounting and how to use it to be more successful in your business. These informative videos show the document you’ll receive from Mazuma each month and how to read the Income Statement, Balance Sheet and Ledger Report to get the most out of your Mazuma services. Ben even highlights ways to use the numbers in your real life situations. And, he uses normal words and examples. Insert applause here.

Profit and Loss/Income Statement Training

Balance Sheet Training

Ledger Report Training

PARTY ALL WEEK LIVE AND VIRTUALLY
All week long we’ll be partying online on our facebook and pinterest pages. Join the fun and share what you think of Mazuma and where you stash your purple envelope. Or if you have general questions, ask away. We’ll respond.

If you’re in the Utah area, plan on joining us for some food and fun. Watch for your invite in your inbox.

Thanks for celebrating with us!

Your Questions, Mazuma’s Answers, Part 1: What business expenses are tax deductible?

 

You asked and Mazuma is delivering–we’re talking business expenses today!

What business expenses are tax deductible?

The broad answer to the often asked broad question comes from IRS Publication 535 “To be deductible, business expenses must be both ordinary and necessary. An ordinary ex­pense is one that is common and accepted in your industry. A necessary expense is one that is helpful and appropriate for your trade or busi­ness. An expense does not have to be indispensable to be considered necessary.”
So as you think about your business, ask yourself, “What do I need to pay for, in order to produce the income my business generates?” Or another way you might word it, “What do I pay for that helps my business succeed in producing income?”
The areas that get a little “gray” and confusing are the things you pay for that benefit your business AND you personally. Such as food, entertainment, or travel. For example, did you have to buy that nice steak at Ruth’s Chris Steakhouse for your client in order to keep your business doors open? Probably not, but did it benefit your business? Yes, filling a client’s belly with melt in your mouth steak increases the chances that they will stick around a little longer. Because of the nature of this “business meal” expense, in that it benefits you personally to some degree, results in the IRS saying you can deduct 50% of the business expenses on your tax return.
Another example, what about your car? Certainly if you didn’t have means of transportation, your business would not be able to operate. Therefore, the amount of your car expenses you can write off depend on the portion of time it is being used for business, versus used for personal purposes. Again, the car benefits you personally at times, so the IRS will not let you take a deduction for all of the expenses. If you drive 10,000 miles during the year, and 8,000 are used for business meetings, and necessary business travel, then 80% of the total car expenses would be for business expenses and thus deductible on the tax return. Or, in order to meet the same objective, the IRS will allow you to deduct 56 cents for each business mile traveled during the year, instead of a percentage of actual expenses.
Here is a list of some examples of deductions that might be applicable to bloggers, but any business that incurs these costs could likely deduct them:
– Advertising and promotion
– Software
– Blog templates or designs
– Books, magazines, online subscriptions
– Camera
– Cell phone
– Cell phone services
– Chairs
– Computer accessories
– Computer purchase
– Computer software
– Conference fees
– Contest prizes
– Crafts for display on blog
– Credit card fees
– Data storage
– Design services
– Desks
– Domain name registration
– Education costs
– Electricity
– Entertainment related to business
– Envelopes
– File cabinets
– Folders
– Food during business meetings
– Giveaways
– Health insurance
– Home improvements
– Home maintenance and repairs
– Hotels
– Images or stock photos
– Internet access fees
– Internet hosting fees
– Paper
-Parking fees
– PayPal fees
– PO Box
– Podcasts
– Postage
– Printer
– Printer ink
– Professional associations
– Professional services (CPA, Attorney)
-Props
– Rent
– Router
– Search Engine Optimization
– Travel
-Utilities
– Wages
– Webcam
– Webinars
– Workshops
What constitutes a “home office”? How do I factor that into my taxes?
According to the IRS, a home office is only a “home office” if the space is used “regularly” and “exclusively” for business activities. This means the are of your home needs to be segregated from other common use areas, like in a room or area separated by furniture. Primarily business activity, such as meetings with customers or working on your computer, happens in this area. The area can’t double as a play room for your kids when you are not there. It can’t be where your kids come to do their school work when you are not there. It’s a designated space used for your business activity, and if an IRS agent walked into your house unannounced, you would be able to point the area out and demonstrate that it is office space and indeed part of your business expenses.
The IRS recently issued a “safe harbor” rule that allows you to take $5 per square foot of home office space, up to 300 square feet.
If you don’t use the safe harbor method, you take the office space square footage and divide it into the whole square footage of the house to get a ratio. Then you multiply that ratio by the total utilities, maintenance, mortgage interest or rent, expenses you paid during the year to get your home office deduction.

Vyde is a licensed accounting firm (CPA) based in Provo, Utah, and members of the AICPA. We provide professional accounting services to businesses and individuals, with a focus on small business bookkeeping and taxes.

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