The year is winding up and the start of a new year is right around the corner. In general, this year has issued a financial beating to many of us an the holiday season isn’t exactly helping. Regardless of whether we see a glimmer of home in the horizon, there remains one fact: Absolute financial control and planning is needed for 2011.

Here are a few tips to help you along the way:

Pay off credit card or high-interest debt: As sad it is, the fact remains that debt accumulates a higher interest than savings. While it is a good thing to save, the gains gotten from that will be totally wiped out by interest from ny debt you have, especially high interest debt. it will be worth your while to pay off the debt first, then focus on accumulating wealth (saving money).

Emergency Funds: In these times of financial unrest, it might be a bit difficult to do – but try as much as you can to make sure you have emergency funds. As far as finance is concerned, there is always something worse hat could happen. In other words, as tough as it is now, it could even be worse. So, set aside emergency funds – if you can. ome experts recommend that you set aside 6 months worth of expenses in a safe place — most likely a savings account.

Ignore ‘Guaranteed Return’ Promises: If nothing else, the financial meltdown should have taught us all not to pay attention to lofty promises and to ignore the words ‘guaranteed’ when it comes to an investment. Yet, a lot of us are still falling for the same trap. It might be understandable, because we all want to find way to make money. However, the risk is not worth it. If you are about to invest in something and the profit or return is guaranteed, take your money and head the other way. It might be safer in your mattress!

There are many, many ways to trim financial fat and hold onto as much money as you can. Please, feel free to ask me any questions you have.  If you would like to learn more, consider taking the Personal Finance course at Courses At Home.

Sole Proprietorship

A sole proprietorship is the form of business entity with the least amount of legal formalities. In a proprietorship, the owner assumes sole responsibility for the operations and finances of the business, including profit and loss. In the proprietorship form of business entity, the owner’s personal property is tied directly to the business; therefore, the owner assumes unlimited risk of his personal assets.

“C” Corporation

Corporations are a separate entity from its owners. Corporations provide the shareholders with the most protection from liability and responsibility from debts and contracts. Profits for a corporation are taxed at the corporate level when the income is earned and is also taxed at the individual shareholder level.

“S” Corporation

An “S” Corporation is similar to a corporation in that it provides its shareholders with protection from liability. However, unlike a corporation, an “S” corporation is exempt from federal income tax. Instead, the taxes are paid solely by the shareholders.

General Partnership General Partnerships require an agreement between two or more individuals or entities to jointly own and operate a business. Profit, loss and managerial duties are shared among the partners, and each partner is personally liable for partnership debts. Partnerships do not pay tax, but must file an informational return, while individual partners report their share of profits and losses on their personal return. Short term partnerships are also known as joint ventures.

Limited Partnership

A limited partnership is a form of business organization that offers some of the partner’s limited liability. It consists of a general partner who organizes and manages the partnership and its operations, and limited partners who contribute capital but have limited liability and assume no active role in day-to-day business affairs.

Limited Liability Partnership

LLP’s are organized to protect individual partners from personal liability for the negligent acts of other partners or employees not under their direct control. LLP’s are not recognized by every state and those that do, sometimes limit LLP’s to organizations that provide a professional service, such as medicine or law, for which each partner is licensed. Partners report their share of profits and losses on their personal tax returns. Check with your Secretary of State’s office to see if your state recognizes LLP’s and if so, which occupations qualify.

Limited Liability Company A Limited Liability Company (LLC) is a combination of the corporate and partnership forms of business. In an LLC, parties control shares of the company and like corporations, their liability for the operations of the company is determined by their level of investment. However, like partnerships, income tax is not paid at the LLC level, but rather it is “passed through” and taxed at the shareholder level. This somewhat complicated form of business entity should be discussed further with an attorney or accountant to determine if it will fit your needs.

From blog.dollasinline.com

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If achieving a healthy balance between your work and personal lives is important then you’ll find the following 8 tips to be extremely helpful:

1. Join a recovery group
Whether you’re an extreme or budding workaholic you may find a recovery group to be helpful. Workaholics Anonymous has meetings around the globe and you might find local groups that can help you better balance your life. There you will find like-minded professionals who can provide you with practical tips and techniques in recovering from workaholism.

2. Determine your true priorities
Before you can balance your life you must first determine what your priorities are. Workaholics are generally value -driven individuals who have confused their priorities a bit, coming to view excessive work as a representation of a strong work ethic, the desire to provide for their families, and the will to be a successful and valued professional. You must reflect on what really matters to you and then list your priorities so you can begin scheduling for them. With workaholics, often what matters most gets the least amount of time and attention.

3. Schedule what you value
Now that you’ve determined what your true priorities are, you can schedule accordingly. If family is important to you then you must ensure that you can spend quality time with them. This will mean setting limits for yourself. At what time will you stop working and start concentrating on personal priorities? This may require an initial concerted effort, but after time you will come to appreciate this new-found balance.

4. Step away from your planner
Workaholics tend to overschedule their work week, planning for too many meetings and appointments than are reasonable. As a recovering workaholic you need to learn how to underschedule, giving yourself time between appointments to prepare, reflect and make necessary action items that will enable you to work more effectively.

5. Take your multitasking habits to task
If part of your workaholism includes an unhealthy amount of multitasking you need to practice moving from one task to the next without become distracted by other projects or tasks. This will require a fair amount of concentration and focus.

6. Schedule breaks
If you’re reading this, chances are you’re the type of professional who sees a gap in your schedule as the chance to get more done, to leap ahead, to log one more billable hour. But remember, if you don’t take a break now and then (at least 30 minutes total throughout the course of your workday) you’ll find yourself paying for it later, either in sick time or with feelings of burnout.

7. Safeguard your health
The healthier you are the more energy you’ll have to run your business. If you haven’t already, schedule in daily time for exercise and/or meditation. Also, ensure that you’re eating foods that will fuel your work activities, enabling your mind to be sharp and alert.

8. Substitute activities
Workaholics Anonymous recommends that you stop adding new activities to your schedule. Instead substitute, remembering that each new item you add to your schedule should replace one with equal time and energy requirements. This forces you to recognize that your time is a limited resource that should be measured accordingly.

Small business owners, more than most, are extremely susceptible to becoming workaholics as they strive to not only keep their businesses afloat, but see that they are profitable enough to sustain their families and often a support staff as well. While it may be difficult to take these steps to better balance your life, the rewards will be innumerable. And as you attend to your personal needs and better prioritize your time, you’ll find yourself rejuvenated and refreshed so you can tackle your business with a renewed sense of vigor and dedication.

What’s The Difference?

Whether a person is an independent contractor or an employee generally depends on the amount of control exercised by the employer over the work being done. Dictating how a job is to be done or limiting the actions of the worker may establish an employer-employee relationship.
An independent contractor:

• Operates under a business name
• Has his/her own employees
• Maintains a separate business checking account
• Advertises his/her business’ services
• Invoices for work done
• Has more than one client
• Has own tools and sets own hours
• Keeps business records

An employee:

• Performs duties dictated or controlled by others
• Is given training for work to be done
• Works for only one employer

The Internal Revenue Service relies on the facts in each case. It does not recognize the validity of any written agreement between the parties. Anyone can get a ruling from the IRS by completing Form SS-8.

For most small businesses, independent contractors should not be considered as substitutes for regular employees. Government agencies generally find that people in the work force are legally employees for tax purposes; the cost of being wrong, remitting unpaid payroll taxes, interest, and penalties can be very high.

Looking for affordable instructor led online courses? Visit Courses At Home

Two new tax benefits are now available to employers hiring workers who were previously unemployed or only working part time.

Employers who hire unemployed workers this year (after Feb. 3, 2010 and before Jan. 1, 2011) may qualify for a 6.2-percent payroll tax incentive, in effect exempting them from their share of Social Security taxes on wages paid to these workers after March 18, 2010. This reduced tax withholding will have no effect on the employee’s future Social Security benefits, and employers would still need to withhold the employee’s 6.2-percent share of Social Security taxes, as well as income taxes. The employer and employee’s shares of Medicare taxes would also still apply to these wages.

In addition, for each worker retained for at least a year, businesses may claim an additional general business tax credit, up to $1,000 per worker, when they file their 2011 income tax returns.

“These tax breaks offer a much-needed boost to employers willing to expand their payrolls, and businesses and nonprofits should keep these benefits in mind as they plan for the year ahead,” said IRS Commissioner Doug Shulman.

The two tax benefits are especially helpful to employers who are adding positions to their payrolls. New hires filling existing positions also qualify but only if the workers they are replacing left voluntarily or for cause. Family members and other relatives do not qualify.

In addition, the new law requires that the employer get a statement from each eligible new hire certifying that he or she was unemployed during the 60 days before beginning work or, alternatively, worked fewer than a total of 40 hours for someone else during the 60-day period. The IRS is currently developing a form employees can use to make the required statement.

Businesses, agricultural employers, tax-exempt organizations and public colleges and universities all qualify to claim the payroll tax benefit for eligible newly-hired employees. Household employers cannot claim this new tax benefit.

Employers claim the payroll tax benefit on the federal employment tax return they file, usually quarterly, with the IRS. Eligible employers will be able to claim the new tax incentive on their revised employment tax form for the second quarter of 2010. Revised forms and further details on these two new tax provisions will be posted on IRS.gov during the next few weeks.

For more information, see the IRS page for this topic —->

Fear of success can be a wonderful thing. In a world full of a millionaires and billionaires, who needs one more? Why trouble with all that when being poor is so much easier?

Anybody with a brain can tell you how to get rich… for a price. Actually, the secret to getting rich is ridiculously simple: Make sure that more comes in than goes out every month, and eventually you will become rich. Now you need never pay for another “Get Rich in Your Jammies” e-book about making money. You can do it if you choose it. I just told you how.

But, like I said, you might want to consider staying poor. The tax burden is much lighter. A lot of burdens are much lighter. For a rich person, the thought of not driving a BMW is intolerable. For a pauper, the thought of not driving at all is not at all troubling. It may even be a relief.

If you are worried read on. I am about to reveal…

The Five Secrets of Perpetual Poverty:

1. Keep fooling yourself into thinking that hard work will result in success… as you work for someone else. Pay attention: Working hard for someone else is like giving all of your own profit to a middleman. Working for somebody else almost guarantees that you will stay poor. The one exception to this rule is if you join a union. You won’t get rich as a union member, but you won’t stay poor either. So beware of unions and beware of entrepreneurial thoughts if you want to live as a poor person forever.
2. Drink a lot on a regular basis. Drinking alone won’t necessarily lead to poverty, but the more you drink, the better your chances of ending up dead and penniless in the gutter just like your favorite poet. Even if you don’t meet that fate, blowing your money at the bar is a great way to put yourself on the path to poverty.
3. Never make any sacrifices or delay pleasure. Go ahead and buy that car that you can’t really afford. get the deluxe cable package. Eat out instead of cooking. The goal here is to remain poor, not to save money. The deeper in debt you go for the things that you think will make you happy, the better.
4. Whatever you do, never — EVER — find fault with yourself or make any attempt to learn anything. Self-improvement is the mortal enemy of poverty. The more you learn, the greater chance that you will earn. Keep making the same mistakes, telling yourself that you know everything you need to know, and generally being an ignorant jerk. That’s the way to stay poor, not that all poor people are ignorant jerks. By the way, a lot of rich people are ignorant jerks so this step alone won’t open the door to lifelong poverty, but it certainly helps.
5. Pay no attention to your finances. Why bother checking your credit scores and reports? You want to pay the highest possible price for everything. Minding your Ps and Qs will get you nowhere fast if you’re trying to stay poor. Make sure that you pay as much as you can for insurance and on your interest rates.

I can confidently predict that if you take to heart all five of these highly sought secrets to a poor and simple life, that is the life you will have. May poverty be you friend!

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Why Online Education Makes Sense Right Now

Economic downturns can be hard on education plans. It’s easy to start second-guessing yourself and wondering if you should have chosen this year‘s high-paying profession as your major.

You love what you’re doing, your boss thinks you possess a lot of initiative for pursuing an education, and your family admires you… and still you wonder.

You’re worried about your job security, the high cost of food and filling up your tank, and your mortgage. If tuition continues to increase, how will you pay for it? Is your investment in education going to “recession-proof” you?

What should you do?

First, let’s take a look at how online courses can help you achieve the goals of having satisfying employment, a career that is sustainable, and the ability to find another job if, for some unfortunate reason, your company or industry encounters hard times.

Next, let’s be really honest with ourselves about the nature of recessions, inflation, job loss, and the future. The possibilities are very scary, but history has demonstrated time and time again that behind every economic downturn is an opportunity.

Do you remember the dot-com collapse? People who lost their jobs took the opportunity to go back to school, retrain, and to broaden their skills. Without exception, people who went through those tough times look back and say that it was, in reality, a great motivator. They diversified their skills and had an opportunity to gain self-confidence, new experience, and a belief in their own abilities.

Here are a few things to tell yourself as you read the headlines describing the hard economic times. Think about going back to school. If you’re in school, stay there.

1. Having a degree means more money.

For years, government studies have demonstrated that people who have a degree will earn more money. Perhaps even more importantly, if you have a degree, you can change jobs and career tracks more easily if you are laid off or your industry goes into decline.

This chart compares lifetime earning potential with and without a degree.

“As shown in Figure 3, for full-time, year-round workers, the 40-year synthetic earnings estimates are about $1.0 million (in 1999 dollars) for high school dropouts, while completing high school would increase earnings by another quarter-million dollars (to $1.2 million).

“People who attended some college (but did not earn a degree) might expect work-life earnings of about $1.5 million, and slightly more for people with associates degrees ($1.6 million). Over a work-life, individuals who have a bachelor’s degree would earn on average $2.1 million — about one-third more than workers who did not finish college, and nearly twice as much as workers with only a high school diploma.”

“A master’s degree holder tops a bachelor’s degree holder at $2.5 million. Doctoral ($3.4 million) and professional degree holders ($4.4 million) do even better.”

2. Higher levels of education are correlated with less unemployment.

If you have a degree, you’re likely to be employed. You will have a job, and you will have excellent prospects for getting another job. In fact, with a degree, you are considered trainable and companies will invest in you even if your background is not a precise match for their needs.

3. Being an online student will impress your boss.

People admire individuals who sacrifice and commit themselves to education. They know that at the end of the road, you are better equipped to be a contributing community and family member. You’ll also be a better team member and employee at the job. Your boss will recognize your efforts, and may even recommend you for a tuition reimbursement program.

If you’re taking courses online, your boss will be even more impressed. More and more companies are turning to online training, webinars, and even virtual world role-play in order to train their employees. Showing your facility with online courses demonstrates you’ve kept up to date with quickly emerging and changing communications technologies. You never know — your boss may even suggest that you participate in online training.

But what about the sacrifice? The cost? The time away from my loved ones? Yes, getting an online degree can be a long, hard road, and you need to have the complete buy-in of your family and other loved ones. Always discuss the benefits, not only to you, but to your entire team (family, work, loved ones, friends).

4. Making progress toward a degree gives you a competitive edge.

On those late nights when you’re pouring yourself another cup of coffee and fighting fatigue as you complete discussion board entries, you may not feel as though you’re becoming a stronger and more nimble competitor in our knowledge economy. However, take heart. You are giving yourself a competitive edge.

Taking online courses gives you a chance to remind yourself that technology and the world are always changing. Recessions and economic hard times simply trigger more rapid change in certain sectors of the economy. Taking courses makes you more agile and flexible in the knowledge economy. Remember that part of getting a degree is learning how to learn. Once you realize that and take it to heart, you can feel confident when confronted with any unexpected change, and you’ll start looking for what you can do to adapt. A college education gives you that skill.

5. Taking courses prepares you for the future and helps you feel in control of your destiny.

Economic downturns can produce a lot of anxiety. It does not help that the news media tends to focus on the negative and to use scare tactics to keep you tuning in. While it is good to keep informed, it is more important to have a plan for yourself and to stick with it. Don’t let fear and worry undermine you and your future.

There is absolutely no doubt that taking courses and obtaining a degree will help you gain employment, possess a higher self-concept, and know that you can survive changes of direction and challenges.

Study the areas that interest you. Don’t just run toward this year’s trendy or high-paying job. Instead, take a clear and honest look at yourself.

• What are the things you love to do?
• Who do you like to work with?
• Where and how do you like to work?
• What subjects fascinate you and why?
• Where are your strengths?
• What are your learning preferences?

If you can answer those questions clearly and objectively, you will be far along the path to being able to chart your own course. You can choose careers that mesh well with your strengths, and you’ll feel proud of the contributions you can make.

Paying for college and budgeting time both require solid, responsible planning. Your family members will see that you make your education a priority. Perhaps you’re having to sacrifice now, but it will pay off with big dividends in the future.

Finally, with a positive attitude about education and your future, you’re a great role model for your family. You are looking at your family in a team sense, and you’re doing your part as a responsible team member to assure the safety and security of the family and your community.

http://www.elearners.com/recession/education-during-a-recession.asp

Do not mix business and personal transactions!

Gotten from Bookkeeping Tips.

It is something you think that most business owners will know. However, about 50% of  my bookkeeping clients come to me with joined accounts – they mix business and personal transactions in the same account. Come tax time, this can make it hectic to figure out what transactions belongs to what and what classification to assign it.

As I explained to a client: In your bookkeeping application (either you or your bookkeeper can do this) you can assign all personal transactions to nondeductible or nontaxable category and then assign the business transactions to the categories they belong to. But do you have any idea how time consuming that can be? (I should know, I did it for a client of mine!)

It would be so much easier to just crate separate accounts for business. This will lessen the amount of bookkeeping that needs to be done. This saves you time that can be spent in other areas of your business and it saves you money spent on bookkeepers (if you pay your bookkeeper on an hourly basis).

It will not cost you a penny to open an account for your business. If you are a small business or a freelancer, it does nto have to be a business checking account. A regular checking account will do until your business is big enough to warrant a business checking account (most of them require limits, so you might need to do a bit of research first).

Please, do not mix your business and personal transactions! It saves you tim, energy, and money – especially when its tax time or, Heavens Forbid it, when there is an audit.

Need an Online Bookkeeper or have questions about bookkeeping? Visit Dollars In Line.

This is a post from Bookkeeping Tips – a sister blog.

As freelancers and small business owners, we often have to send out invoices to clients. Here are some tips on sending out invoices:

• Summarize what you have done for the client. The summary can be a really brief paragraph. THis will ensure that they knowEXACTLY what they are being billed for and you will knowEXACTLY what you have billed for. For example, if you advertised a client’s business, then your summary might read:

Services for the month of April that include sending out tweets on twitter, posting articles on blogs and updating status on facebook.

• Put a ‘Thank you’ at the bottom of the invoice. It is courteous and adds a pleasant ‘feel’ to the invoice. It is tough for people to part with money. Do what you have to do to make that process as easy as possible.

• Avoid this phrase: ”Please call if you have questions.” It makes it look as if you are unsure of what you have billed them for and might have overbilled them. Besides, they already know that if they have a question, they can contact you.

• Be consistent. Do not send out invoices with details one month and then send out invoices without details the next month. While it is a good idea to be detailed on your invoices, if you choose not to, make sure you consistently do this.

If you are looking for an online bookkeeper or need to ask questions about bookkeeping, visit Dollars In Line.