/Entrepreneuring

What Every Small Business Should Know About 1099s

Every year when tax time rolls around, I field questions from business owners about whether or not they need to send 1099s to their vendors. As common as 1099 forms are, they remain one of the most misunderstood Internal Revenue Service (IRS) requirements.

To make sure you understand the circumstances under which the IRS requires issuing 1099-MISC forms to vendors, I’m going to provide some basic “must-know” information here.

What Is A Form 1099-MISC?

You must issue an IRS Form 1099-MISC to each person you’ve paid $600 or more in services (including parts and materials), prizes and awards, rents or other income payments. The 1099-MISC only applies to payments you made in doing business; it does not apply to payments made for personal purposes.

To Whom Do You Need To Send A Form 1099-MISC?

If your business paid more than $600 to a vendor or sub-contractor [individual, partnership, Limited Liability Company (LLC), Limited Partnership (LP), or estate], you are required to send a Form 1099-MISC to document what you paid them throughout the year. In general, anyone who worked for you—other than your employees—will need a 1099 from you.

Also, unless an exception applies to them, you need to issue a 1099 to your landlord if you are paying rent for business purposes. You must also issue a 1099-MISC to your attorney if you paid for legal services that amounted to more than $600 during the year.

Are There Any Exceptions?

There are. The list is rather long, but most commonly these types of vendors do not get 1099-MISC forms:

Also, you don’t have to send 1099-MISC forms to vendors to whom you made your payments via a credit card, debit card, gift card, or a payment network like PayPal. The onus to report vendor compensation is on those payment companies.

How Do You Figure Out If A Vendor Needs A 1099 From You?

I recommend before you request vendors to do any work for you, ask them for a completed W-9 form. The W-9 will give you all the information you need for filing taxes. It supplies a vendor’s mailing information, Tax ID numbers, and business structure (so you’ll know if the vendor is incorporated or not and does or does not need a 1099).

When Is the Deadline To Send 1099s?

By January 31, 2017, you must do two things to comply with your 2016 tax year 1099 obligations:

  • Submit Form 1099 to each vendor (reflecting what you paid that vendor in 2016).
  • Submit a copy of the Forms 1099 you sent to each vendor, along with a Form 1096 that discloses in total what you paid to all vendors who received 1099s from you.

Make sure you check on your state’s rules, too. Some states require they also receive your 1099s.

What Happens If You Miss The Deadline? 

Sending the required 1099-MISC forms late (or not at all) could cost you. The penalties vary depending on how far past the deadline you wait to issue the forms. If your business had gross receipts of $5 million or less, the amount you’re smacked with could range anywhere $50 to $260 per form (for tax years 2016 and 2017). If you’re caught intentionally not providing a payee with a correct statement for tax year 2016, you could face a fine of $520 for each form not submitted (that amount will increase to $530 for tax year 2017).

Where Can You Get 1099 Forms?

Unfortunately, you cannot download 1099 Forms from the IRS website. You can, however, order them from the IRS site and have them mailed to you, or you can pick them up at an IRS service center, post office, or another location that supplies them.

Eliminate Headaches—Do It Right From The Start!

Whether you’re in the early stages of launching a startup or already running a small business, I recommend you talk with a tax professional who can share more details about 1099s and the other aspects of filing your tax returns.

Starting a business or ready to change your current business structure? Contact us about making the registration process hassle-free and as fast as possible. We’re here to handle all of your legal document filing needs!

Five Steps To Becoming An Empowered Woman (Or Man) Business Owner

As a woman business owner, I’ve found that empowerment comes to us in two ways:

1. Access to external sources of inspiration and knowledge

2. Self-respect and self-confidence

You can sit around and wait for someone to empower you, or you can take the bull by the horns and take action to empower yourself. I will always vote for the latter of the two because it gives you more control over your entrepreneurial destiny.

Although women own nearly 30 percent of U.S. small businesses (according to the Status of Women in the United States website), I find that many of us still struggle with accepting it’s OK to seek empowerment on our own. We often think of it as something that is handed to us. That doesn’t seem very empowering to me!

So, what can women entrepreneurs (and men, too) do to boost our level of empowerment and reach our personal and professional potential?

1. Recognize what knowledge and skills you lack, and find tools and resources to increase your proficiency.

This requires a commitment to honestly assessing your strengths and weaknesses. After you’ve done that, actively seek blogs, books, webinars, podcasts, conferences, mentors, and other resources that will help you get up to speed.

2. Align yourself with positive people (professionally and personally).

I cannot emphasize enough how much this affects morale and motivation. Chronically negative people drain your energy and enthusiasm. When they direct their skepticism and sarcasm at you and your endeavors, they deplete your self-confidence and leave you feeling defeated. As much as possible, minimize your exposure to them so you can fill your life with people who truly care about you and who will encourage rather than discourage you.

3. When you meet people who exude empowerment, ask them if they’ll share their insight about attaining that level of confidence.

I’ve found most people who have an empowered aura about them are immensely gracious and open to sharing about how they’ve helped themselves. I encourage you to reach out to them for inspiration. Even though their approach may not work with precision for you, you will no doubt take away some valuable ideas to apply in your own quest for empowerment.

4. Start the day on a note of gratitude.

I make it a point to devote a few minutes every day to consciously thinking about everything I have to be thankful for. What better way to get a positive start? It immediately puts me in the right frame of mind for dealing with whatever work and life will bring my way. This is so simple to do. I dare you to find an excuse as to why you can’t try this!

5. Acknowledge that mistakes and setbacks happen.

Because they will. The good news is they won’t make you a failure unless you dwell on them. Get beyond goofs and misfortunes by treating them as lessons learned and by remaining agile so you can shift gears and move in a new positive and productive direction.

6.  Don’t be afraid to say “no” or voice your position. 

If people ask too much of you, learn to say “no.” Overextending yourself will create excess stress and pull you away from what really matters. Also, don’t be afraid to voice your opinion when you disagree adamantly about something. Although initially you might meet criticism, in the long run you’ll gain more respect. Most importantly, you’ll respect yourself—and that is mission critical for feeling empowered.

Empowerment Begins With Embracing Its Power

Whether you’re a female or male entrepreneur and regardless of whether you’re just starting a business or have been running your company for years, empowerment wields great power. I urge you to embrace its potential to help you mold your vision and achieve your goals and dreams.

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How Job Titles Can Help You Hire Great Talent

So it’s a new year, and you’re looking to hire new talent. You start off by posting a job online, but you’re not finding many candidates, at least not the great ones your company needs. How come? You may not realize this, but the job titles on your postings might be the reason.

Professionals care about the job title a company will provide them with (as well as one they’ll be proud to boast on their resumes in the new year). If you spend enough time looking at other job descriptions and titles, you’ll begin to notice a trend. There’s an increase in outside of the norm job titles. Riding this trend could help you recruit better candidates.

So what should you do heading into the new year? Spend more time crafting your job titles.

Here’s why job titles are so important in the hiring process.

They Help You Target the Type of Person You’re Looking to Recruit

Millennials are looking for different types of job titles than seasoned professionals, so depending on who you want to attract, you may need to tweak your titles accordingly. Those who have been around the block in their careers may be searching for more traditional job titles, while the fresh-out-of-college set may like funkier titles like “Brand Evangelist.”

Your Job Title is Your Welcome Mat

The first thing a potential candidate sees on a job board is your job title. Consider it your click-bait: if the title is boring or uninspiring, some job seekers won’t click to see what qualities you’re looking for. On the other hand, if you spend time coming up with a concise job title, you’ll attract more candidates to choose from.

Being Specific Narrows Your Applicant Pool

On the other hand, you may not want tons of applicants but prefer to have only highly-qualified folks with a very specific skillset submit their resumes to you. Be sure to use precise terms like “Senior” or industry knowledge keywords you want in the job title to winnow down those that will apply.

But Being Overly Zany Might Put You in the Corner

Yes, companies like Google are replacing older keywords like “Human Resources” with “People Specialists,” but that might not be the best strategy for your company. The problem with getting too off-the-wall is that people won’t be searching for your one-of-a-kind job title. Even if internally, you call your programmers “Awesomeness Creators,” you can still use more traditional job titles in your search to ensure that people find your posting.

Your Job Titles Speak Volumes About Your Company Culture

Just like you will be assessing job candidates, those same professionals will be assessing your company. If your job titles are more creative, you might give off a startup culture vibe, which is appealing to many. Or, your more traditional titles might lure experienced professionals looking for stability and familiarity. Consider the ethos you want to portray with your company as you craft your titles.

Creating Better Job Titles

Just because you’ve had a Marketing Manager for years doesn’t mean the next person that fills that role needs to have the same title. Before you post your next open position on job boards, review what that role currently consists of. It likely has evolved over the past several years, and the job title should reflect that. Maybe now that role looks more like a Content Marketing Guru or a Social Media Manager. The more specific you get with the title, the more appealing it will be to the right candidates.

See what your competitors are calling similar roles and determine if you want to mimic those titles or branch off from them. You want candidates to be able to find your job listing, so you might not want to get too creative.

And skip the acronyms or abbreviated words, as well as internal reference IDs (Marketing Mgr Ex75-4). These only make it harder for job seekers to search for your position.

Above all, keep your job titles short and searchable. Leave the details for the job description itself. Consider what a candidate might search for to find your position on a job board. Search there yourself to see how good a fit your role is in search results. And if over time, you don’t get the caliber of candidates you’re seeking, you can always update that job title; it’s not set in stone.

When you post an open position, you are, in a sense, marketing it to potential buyers — or applicants. If you want qualified leads — applications — you’ve got to put the effort into developing the most relevant and appealing job title possible.

Dos And Don’ts When Transferring Leadership Responsibilities: Lessons To Learn From Obama and Trump

Changes in leadership don’t always happen seamlessly—or amicably. As is evident with the imminent transfer of leadership from President Obama to President-Elect Donald Trump, many factors influence how smoothly (or not) a change in authority will happen.

Whether you’re taking over running a business or handing over the reins to your responsibilities to someone else, expect some bumps in the road. But be careful not to become a source of agitation and dissent through the process. This recent presidential election, which has been simultaneously entertaining and frustrating at times, can teach us some valuable lessons about what to do and what not to do during a leadership transition.

 

Lessons Learned From Obama and Trump: The Dos And Don’ts Of Changing Leaders

  • Don’t undermine the capabilities of either the incoming or outgoing leader.

If you’re the new boss in town, bad-mouthing the outgoing person in charge won’t sit well with those loyal to their incumbent leader. And if you’re the one passing the baton, lack of confidence in the new leader will create distrust and distract employees from performing to their potential. To minimize the stress your team may already be feeling over the change, resist the impulse to undercut the qualities and strengths of one another

  • Don’t expect everyone to be enamored with the change.

While some of your staff members might be excited about the new era ahead, you can bet others will be anxious, annoyed, or angry—possibly all three. Prepare to bear the brunt of their harsh criticism whether you’re the new leader or the one leaving your post.

  • Don’t underestimate the power of words.

I saw a quote online that really resonates with me, “Words are free. It’s how you use them that may cost you.” Keep this in mind as you navigate the challenges of handing over or accepting leadership responsibilities. Through this recent presidential election, we’ve seen how choosing and using words reactively can create animosity and negativity. Before speaking and before writing, pause to think about your words and choose them carefully before you share them with business colleagues, employees, vendors, customers, and the public at large.

  • Do show enthusiasm for continued progress toward common goals.

Find points of agreement where you and the other leader can demonstrate unity. Sure, you may not see eye to eye about plenty of things related to how the business should be run, but now isn’t the time to dwell on that. Your employees need to have some sense of consistency and common ground.

  • Do provide/accept information and insight to make the transition fluid.

As the outgoing leader, be cooperative by openly sharing essential information with the new leader so she can more adeptly step into your shoes. As the new leader, be open and receptive to the insight the outgoing leader has to share. Put ego aside and realize your predecessor has knowledge and experience that can help you lead more effectively.

 

Your Top Priority As A Leader

Both outgoing and incoming leaders have one thing in common: a job to do! Pointing fingers, making snarky remarks, and stirring up drama will only distract you from doing right by those who work in your business and those who do business with your company. If you keep that in mind through every step of the process, the transfer of leadership will go much more smoothly.

 

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By | January 13th, 2017|Corporate & Business Law, Entrepreneuring|0 Comments

What Will Your Story Be?

We dream big. We sleep little. We think much. We’re entrepreneurs and before we die, we will add a page to the history books (or at least Wikipedia). Our story began when we were born and it’s been one hell of a ride ever since. Sound familiar?

Speaking of stories, on January 3, 1977, Apple was incorporated. While their story began prior, that date will always be remembered. A couple of guys in a garage with nothing more than passion and intellect literally changed the world. It’s a heck of a story and it’s been told several times online, in books, and often from Hollywood.

For the rest of us, we dream about it. We want to leave our mark. We want to change the world, even if just a little bit. Maybe we just want the cash money riches that success can bring or maybe we want to be famous or maybe, we don’t care, we just love to make things and fix stuff. I’m pretty sure Jobs and Wozniak never really thought much about their story. They were too busy making things and tinkering and solving problem after problem after problem. They made something useful and they made money and I’d bet at some point, they looked back and said something like, “we did that” and the story continued. I wouldn’t be typing this post on my shiny iPhone 7 Plus right now if not for that day and the many days before and after where passion and perseverance performed perfectly in pursuit of perfection. More importantly, the story started and it’s only just begun.

Steve is gone. I miss him and his story making abilities. Today, Apple continues to add pages to its story every day. I try to do the same. You should too.

By | January 6th, 2017|Entrepreneuring|4 Comments