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Six tips about employee business expenses

 

If you paid for work-related expenses out of your own pocket, you may be able to deduct those costs. In most cases, you claim allowable expenses on Schedule A, Itemized Deductions. Here are six tax tips that you should know about this deduction.

1. Ordinary and Necessary.  You can only deduct unreimbursed expenses that are ordinary and necessary to your work as an employee. An ordinary expense is one that is common and accepted in your industry. A necessary expense is one that is appropriate and helpful to your business.

2. Expense Examples.  Some costs that you may be able to deduct include:

• Required work clothes or uniforms that are not appropriate for everyday use.

• Supplies and tools you use on the job.

• Business use of your car.

• Business meals and entertainment.

• Business travel away from home.

• Business use of your home.

• Work-related education.

This list is not all-inclusive. Special rules apply if your employer reimbursed you for your expenses. To learn more, check out Publication 529, Miscellaneous Deductions. You should also refer to Publication 463, Travel, Entertainment, Gift, and Car Expenses.

3. Forms to Use.  In most cases you report your expenses on Form 2106 or Form 2106-EZ. After you figure your allowable expenses, you then list the total on Schedule A as a miscellaneous deduction. You can deduct the amount that is more than two percent of your adjusted gross income.

4. Educator Expenses.  If you are a K through 12 teacher or educator, you may be able to deduct up to $250 of certain expenses you paid for in 2014. These may include books, supplies, equipment, and other materials used in the classroom. You claim this deduction as an adjustment on your tax return, rather than as an itemized deduction. This deduction had expired at the end of 2013. A recent tax law extended it for one year, through Dec. 31, 2014. For more on this topic see Publication 529.

5. Keep Records.  You must keep records to prove the expenses you deduct. For what records to keep, see Publication 17, Your Federal Income Tax.

6. IRS Free File.  Most people qualify to use free, brand-name software to prepare and e-file their federal tax returns. IRS Free File is the easiest way to file. These rules can be complex, and Free File software will help you determine if you can deduct your expenses. It will do the math, fill out the forms and e-file your return – all for free. Check your other e-file options if you can’t use Free File.

Visit IRS.gov/forms to view, download or print IRS tax products anytime.

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Brewery to begin site work

BUS-CS-Brewery-web

Residents who have anxiously waited for construction to begin on the new brewery and restaurant at the corner of Main and Maple Streets will soon have something to cheer about.

According to David Ringler, owner of the Cedar Springs Brewing Company, site work will begin at 94 N. Main in the next two to three weeks. “We have a very tight, efficient construction schedule so things should happen fast once we get started,” explained Ringler. “We are on schedule for a late summer opening, barring something unforeseen, and in time for Red Flannel Festival. We’re excited to get this thing going, too!”

The brewery had a ground-breaking last fall, and then had to wait for additional testing by the state DEQ regarding a fuel oil tank that had been on site.

The 8,000 square-foot brewery and full-service restaurant will seat 150 inside, and 100 outside in its outdoor biergarten.

The Michigan Economic Development Corporation announced last month that it had awarded the Cedar Springs Brewing Company LLC and 95 North Main LLC a Michigan Community Revitalization Program performance-based grant of $285,614. The project is expected to generate a total capital investment of more than $1.5 million and create 15 full-time equivalent jobs.

In addition, the City of Cedar Springs Brownfield Redevelopment Authority received approval for local and school tax capture in the amount of $56,800 to alleviate brownfield conditions at the site. The City of Cedar Springs is supporting the project with a PA 198 Industrial Facilities Tax Exemption valued at $130,000 and contributing $31,178 in local funds toward the brownfield redevelopment plan.

Because of the three-month delay in construction work, the microbrewery is extending its brick program for the outdoor patio. People can purchase them online at www.csbrew.com. They also have other items in their gift shop online.

Ringler said they are moving their current office out of the old Red Flannel Festival building, and into a new one, so don’t currently have regular office hours. People can schedule a time to meet if needed at team@csbrew.com or by calling 696-BEER. You can also check them out on Facebook at www.facebook.com/cedarspringsbrew.

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Amish Warehouse to close

 

The Amish Warehouse Furniture and Gifts, 141 South Main, in Cedar Springs, will be going out of business. Bob and Betty Truesdale, owners of the business for 24 years, have decided to retire and sell their shop and home at the corner of Main and Church Street.

The Truesdales began their business 24 years ago, out of their previous home on 14 Mile, east of Cedar Springs, then moved to a location in the Cedar Rock strip mall, where they did business for 8 years.  After that, they bought the property at 141 South Main and had their business and home built there.

Bob said that whoever buys the property doesn’t have to use it as a furniture store, but they could if they wanted to. “It could be anything,” he said.

Bob noted that the closing has nothing to do with the issues he’s faced on City Council. “I just decided I didn’t want to die in a furniture store,” the 81-year-old explained with a chuckle. “We plan to spend time with our great-grandchildren in Ohio, Indiana and Florida.”

The Truesdales are grateful for customers who visit their shop, and hope they will continue to visit as the stock dwindles. “We are very thankful to the clientele that we’ve had,” said Bob.

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Library name change

 

According to the Kent District Library, the branch located at 88 Eighth Street, in Sand Lake, will now be known as the Nelson Township/Sand Lake Branch of the Kent District Library, instead of the Sand Lake/Nelson Township branch.

Craig Buno, Branch Manager for the Nelson Township/Sand Lake branch, said that the name change is to create consistency. “When I first started here in June, I noticed that the sign outside says Nelson Township / Sand Lake Branch, along with several other signs throughout the building that were purchased when the building was built,” explained Buno. “In order to create consistency, KDL had to update many of its publications and notices.”

They also have new hours: Monday and Wednesday 12-8 p.m.; Tuesday and Saturday 9:30 a.m. to 5 p.m.; and Friday 1 to 5 p.m.

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Ask Score

 

By Ernie Birge, SCORE Counselor

SCORE: Your Gateway to Business Success

SCORE is here to help entrepreneurs, and owners of small to medium-sized businesses be more successful.  SCORE provides free business mentoring through more than 40 experienced individuals in our Grand Rapids Chapter. These volunteers offer more than 400 years of business management experience in many different areas.

If you have a vision of a new business you want to start, contact us and let us mentor you through the process of establishing a formal plan for your business. We’ll show you how to plan your startup. We’ll help you analyze the competition you will face and learn how to show your potential customers why they should do business with you. Your SCORE mentor will help you determine the financial resources you will need to have available, as you get ready to open your doors for business.

If you have an established business and you feel “challenged” in these challenging times, contact us and let one or more SCORE mentors review your business to help you shape a plan to grow your business.  Your mentors will help you form a financial plan, look at your marketing activities, or simply listen to you and serve as a sounding board to give you a support system that helps you lead your business. SCORE advisors can assemble a mentoring team with experts from different specialty areas to help you get advice in areas such as finance, marketing, human resources and management.

You can meet with SCORE just once or on a long-term basis. If you have a simple business question or just want an explanation of how a cash flow statement works, SCORE can provide you with answers. However, you really get the best value from SCORE if you set up a series of confidential meetings to talk about a business problem or opportunity.

There are many factors that support your success in your business: a focused business plan, hard work, quality products and services—just to name a few.

Another contributing factor to small business success is good advice. I encourage every entrepreneur that I talk with to seek out advisors. Note that I say mentors, not necessarily a single mentor. Small business owners benefit from having access to numerous perspectives. The effective leader then takes these insights and distills the ideas and advice into what is right for his or her business.

Small businesses represent economic prosperity in America and here in Western Michigan. The success of small business is important to you as a business owner, to your employees and to this community.

Get free and confidential counseling with SCORE, 111 Pearl Street NW, Grand Rapids, MI 49503. Call (616) 771-0305. Visit www.scoregr.org or email score@grandrapids.org.

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IRS scams and tax-related ID theft 

 

IRS will never ask for taxpayers’ personal information by phone or in e-mails

Anybody contacting you claiming to be from the IRS and asking you for personal identifying information is a crook. Every year the IRS issues warnings about rebate or other scams being perpetrated by con artists claiming to work for the agency. The goal of these crooks is to commit identity theft, take control of personal computers, or simply duping people out of cash. IRS scams enable con artists to get bank account information, Social Security numbers, or credit and debit card details that are then used to commit identity theft.

IRS e-mail scams

E-mail continues to be the method of choice for IRS scams. Common e-mail tricks used by these crooks include using:

• the official IRS logo,

• whole sections of text from the IRS’s website,

• a fake “from” address (reported Michigan variations include irs@getrefundnow.com, support@irs.gov, service@irs.jg.gov, tax-refunds@irs.gov and other variations on the irs.gov theme),

• forms with numbers similar to those the IRS already uses, often with a jumble of numbers and letters.

Don’t fall for any e-mail scams! The IRS never initiates e-mails to taxpayers!

Michigan Attorney General Consumer Alerts are available at http://www.mi.gov/ag. Toll free 1-877-765-8388.

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Tax tips for the self-employed

 

Many people who carry on a trade or business are self-employed. Sole proprietors and independent contractors are two examples of self-employment. If this applies to you, there are a few basic things you should know about how your income affects your federal tax return. Here are six important tips about income from self-employment:

SE Income.  Self-employment can include income you received for part-time work. This is in addition to income from your regular job.

Schedule C or C-EZ.  There are two forms to report self-employment income. You must file a Schedule C, Profit or Loss from Business, or Schedule C-EZ, Net Profit from Business, with your Form 1040. You may use Schedule C-EZ if you had expenses less than $5,000 and meet other conditions. See the form instructions to find out if you can use the form.

SE Tax.  You may have to pay self-employment tax as well as income tax if you made a profit. Self-employment tax includes Social Security and Medicare taxes. Use Schedule SE, Self-Employment Tax, to figure the tax. If you owe this tax, make sure you file the schedule with your federal tax return.

Estimated Tax.  You may need to make estimated tax payments. People typically make these payments on income that is not subject to withholding. You usually pay this tax in four installments for each year. If you do not pay enough tax throughout the year, you may owe a penalty.

Allowable Deductions.  You can deduct expenses you paid to run your business that are 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 proper for your trade or business.

When to Deduct.  In most cases, you can deduct expenses in the same year you paid for them, or incurred them. However, you must ‘capitalize’ some costs. This means you can deduct part of the cost over a number of years.

Visit the Small Business and Self-Employed Tax Center on IRS.gov for all your federal tax needs. You can also get IRS tax forms on IRS.gov/forms anytime.

Additional IRS Resources:

Form 1040-ES, Estimated Tax for Individuals

Publication 505, Tax Withholding and Estimated Tax

Publication 334, Tax Guide for Small Business

Publication 535, Business Expenses

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Five key facts about unemployment benefits

 

IRS Tax Tip 2014-30 

If you lose your job, you may qualify for unemployment benefits. The payments may serve as much needed relief. But did you know unemployment benefits are taxable? Here are five key facts about unemployment compensation:

1. Unemployment is taxable.  

You must include all unemployment compensation as income for the year. You should receive a Form 1099-G, Certain Government Payments by Jan. 31 of the following year. This form will show the amount paid to you and the amount of any federal income tax withheld.

2. Paid under U.S. or state law.  

There are various types of unemployment compensation. Unemployment includes amounts paid under U.S. or state unemployment compensation laws. For more information, see Publication 525, Taxable and Nontaxable Income.

3. Union benefits may be taxable.  

You must include benefits paid to you from regular union dues in your income. Other rules may apply if you contributed to a special union fund and those contributions are not deductible. In that case, you only include as income any amount that you got that was more than the contributions you made.

4. You may have tax withheld.  

You can choose to have federal income tax withheld from your unemployment. You can have this done using Form W-4V, Voluntary Withholding Request. If you choose not to have tax withheld, you may need to make estimated tax payments during the year.

5. Visit IRS.gov for help.  

If you’re facing financial difficulties, you should visit the IRS.gov page: “What Ifs” for Struggling Taxpayers. This page explains the tax effect of events such as job loss. For example, if your income decreased, you may be eligible for certain tax credits, like the Earned Income Tax Credit. If you owe federal taxes and can’t pay your bill, contact the IRS. In many cases, the IRS can take steps to help ease your financial burden.

For more details visit IRS.gov and check Publication 525. You can view, download and print Form W-4V at IRS.gov/forms anytime.

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Five tips to save money and time 

PHOTO SOURCE: (c) Monkey Business - Fotolia.com

PHOTO SOURCE: (c) Monkey Business – Fotolia.com

(StatePoint) There are two things most small business owners have in common: limited time and limited finances. If you’re an entrepreneur, finding ways to make the most of both is crucial for your sanity and success.

The key to becoming more efficient with these two key resources is organization, says “SmallBizLady” Melinda Emerson, small business expert and author of the bestselling book “Become Your Own Boss in 12 Months.” She has teamed up with Sam’s Club to help small business owners save time, money and energy as they tackle their day-to-day tasks. Here are some of her top tips:

• Stop creating never-ending to do lists. Focus on completing only five things before 11 a.m. each day. By selecting your top priorities at the end of each day, you will become much more selective and effective with your time.

• Focus on a niche target customer. You have limited time and resources for your marketing efforts. It is best if you pick a niche target customer you can actually reach; don’t just chase any customer that you think has money. Remember, if everyone can use your product or service, no one will.

• Look for one-stop shopping for supplies and services. For example, a Sam’s Club Business Membership not only saves you money on business and restaurant supplies, it also provides members-only savings on a suite of business services that can save you time. Services include solutions for human resources, payroll, payment processing, and legal needs. Sam’s Club has joined forces with such trusted brands as First Data, LegalZoom and Execupay to provide members-only savings. You can find more information at www.SamsClub.com/services.

• Use a timer when you are on social media. Facebook and many other social media sites can be a huge time suck if you are not strategic. Focus your efforts on just one social site to build your online brand.

• Organize your files.  You can waste a lot of time looking for things on your laptop if you’re disorganized. Don’t store everything on your computer desktop. Create files by category and year, such as “2015 Contracts,” to find things quickly. You should also use a cloud storage backup system. This way, you can work from anywhere and your files will be safe if something happens to your computer.

Running a small business is a full time job and then some. If you are your own boss, take easy steps to maximize your resources and make certain tasks less time consuming.

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BUSINESS BITS

Mac’s Rustic Sports Shop

Rustic Sports Shop, 519 Ensley Street, in Howard City, has been in business over 50 years, and changed ownership May 1, 2014. The business is now owned by Nick and Bob MacTavish. This all around outdoor/hunting and fishing sports shop carries fishing and hunting equipment, including muck boots, bows, arrows, guns and much more. They also offer archery classes at certain times of the year, and even have an archery range upstairs for practice.

“We have a very friendly and interactive environment with our customers,” said the MacTavishes. “Customers tell us all the time, ‘You are always so helpful and informational—that’s why we keep coming back.’”

They said they intend to continue to grow the business and become the best sports shop around.

Hours are 5 a.m. to 10 p.m. For more info, call (231) 937-4372.


 

Mecosta County Collision

Ted Schneider is well-known in the area as the owner of Tri County Body, since 2001. He recently opened a second business, in Morley, called Mecosta County Collision. The business, located at 505 N. Cass Street, offers full service auto collision repair for all makes and models, auto glass replacement, detailing, motorcycle repairs, towing, and free loaner autos. They also do a tintable stone guard for vehicles.

“We strive to make the customer happy at all times,” said Ted. “And we will come to your location for onsite estimates. Customers say all the time ‘you always bend over backwards for us that’s why we keep coming back!’”

Mecosta County Collision is open 7 a.m. to 4 p.m. weekdays. Call (231) 307-3101 for more information.

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