But just like there are rules of the road we must follow, there are also rules for automotive tax deductions. Auto deductions have recently become a red flag because the IRS (hurting for tax revenues) is cracking down on all deductions – and they know auto deductions are where businesses do a lot of hanky panky.

One client of mine is learning this the hard way. His wife is a stay-at-home mom and once or twice a week she helps him deliver packages and paperwork. Before working with us, he’d been deducting the entire operation of her vehicle on his tax returns.

The problem is that the IRS flagged his return for audit and is questioning the deductions on his wife’s vehicle. Aside from the hassle of the audit, he may wind up paying Uncle Sam back taxes, a penalty and interest. No fun.

So what can you deduct when it comes to the business use of a car? The good news is that almost everything is deductible – IF you use the car 100% for business. If you use the car for both business and personal purposes, you need to deduct a percentage, either by keeping track of all your vehicle-related expenses or by tracking your mileage. The IRS lets you choose whichever method gives you the greatest deduction.

Let’s be honest – you probably hate tracking this stuff. So here are some tips for how to do it (more) easily:

If you track actual expenses, keep an envelope in your glove compartment, and every single time you get gas, tires, service, car wash, etc., put the receipt in this envelope and give it to us (or your bookkeeper) every week or month.

If you opt to track mileage, then there’s an app for that!! Almost every handheld PDA offers mileage tracking apps. Download one of those, and use it! A few of these are: Mileage Log, Vehicle Log Book, and Gas Log. Note that the deduction is $.50 per mile driven for business in 2011.

Here’s an idea if you keep a good electronic calendar (i.e., Google Calendar/iCal/Outlook). When you book an appointment, note the estimated roundtrip mileage. Every month, print out your calendar and give it to your bookkeeper, let them add it all up for you. One client of mine has her assistant do this for her.

Ride a bike! If you never use your car for personal reasons, then you can deduct everything (just kidding).

Before you hit a speed bump on your IRS tax return, remember you have a couple of options when it comes to automobile deductions. The rules are tricky, so give us a call at DM Accounting… we’ll zoom past the tax burden and get you on a smooth road to tax success this year.

Wishing you great success and LOTS of $$$ in 2011!

Here’s a story…

One of my clients thought he owed more than $50,000 to the IRS this year. However, when I asked him if he ever made charitable contributions, I hit the jackpot… Turns out, the man is a serial giver!

He gives to his church, he donates to his father’s veteran organization, he and his wife attended dozens of galas each year in support of different causes, they even donated (very valuable) artwork to the local museum and 2 carloads of clothes to Goodwill.

When I added up all of that he donated last year, we were able to find more than $25,000 in deductions!

There are a LOT of organizations that are qualified to receive donations, and that YOU are qualified to deduct. Some examples include churches, synagogues, trusts, community chests, medical research, veterans organizations, some fraternal societies, silent auctions, volunteer fire departments, educational foundations, old property donated to charities, and much more.

Now before you get too excited, you need to know that there are lots of intricacies in calculating these deductions and you need to follow the rules – especially the need for meticulous documentation, because (once again!) large charitable deductions are an IRS red flag.

Even so, when you give to a charity, you will gain as well when it comes to your taxes. I like to live by the BNI saying, “Givers Gain”, and believe it or not, so does the IRS!

So happy giving and great success in 2011!

I feel “elevated” and imagine you do too. But as Chief Badass Business Woman Jessica Kizorek said during her keynote – just because we FEEL elevated, doesn’t mean our businesses ARE elevated (yet).

As outsourced bookkeepers and accountants, one of the most common problems we see is small business owners who try to do everything themselves.

From generating new business, networking, marketing and sales all the way to filing tax returns, managing QuickBooks, paying bills, sending out invoices and collecting money… they do it all.

And if they’re women, even MORE so, because we women are used to juggling a zillion responsibilities and consider ourselves adept multitaskers.

Problem is, “multitasking” usually means “doing it all.” And that is a business killer. Focusing on the minutiae of your business (like bookkeeping and accounting) means NOT focusing on strategy, marketing and growth. And that’s why so many businesses fail.

Think of it this way: a job that you need 10 hours to do, an expert could probably do in 1 or 2. Those newly freed-up hours could be better spent following up with potential leads, writing an email marketing newsletter or simply networking.

I know I know… It’s like the chicken and the egg – do you wait until the revenues are there before investing in outsourcing, or do you take a leap of faith, knowing that your valuable time is more wisely spent on something else?

Taking that leap of faith is hard. So I’ll make you a deal.

We brainstormed all weekend to come up with a package that would quickly show you the value of our services. It’s called the “Elevate Your Small Business Package.”

If you qualify, we would take over all your bookkeeping and accounting services. And when I say all, I mean ALL.

Imagine life like this:
You would no longer have to worry about any tax deadlines or forms
You wouldn’t need to reconcile any credit card or bank statements
We would pay all your vendors and contractors
We would invoice your clients
We would manage PayPal accounts and bank accounts – and transfer as needed
We would issue disbursements and salary to you as the business owner
We would pay your bills and properly account for them in your expenses
We would categorize expenses so you can analyze and optimize your spending
You would get monthly profit and loss and balance sheet
You would get a monthly cash flow statement

We would do your end-of-year tax returns – INCLUDED – just review and sign

The price: $575/month or LESS (if you don’t need all of these services). We’ll take a maximum of 5 “Elevate Your Small Business” clients to start, and you would need to qualify.

How to know if you qualify? Email me so we can set up a time to chat for a few minutes and get a feel for each other. I’ve learned (the hard way!) that we need to “click” in order to have the best possible business relationship, so that’s step 1.

Our goal is to free you up to focus on what YOU’RE great at while we focus on what WE’RE great at.

Wishing you great success and LOTS of $$$!!!

This week, I’ll be “elevating” myself too – perhaps not as high as the astronauts – but by connecting and seeking wisdom from other businesswomen (and men!) at The Empowered Woman Success Summit at the Miami Museum of Science.

That’s because the theme of the summit is Elevate Yourself. I’ve learned over the years that networking is one of the best ways to elevate my business.

Not all business owners “get” the power of networking, however. I recently invited a friend of mine who has a new business to come to a networking event with me. She said she couldn’t because she was so swamped. I congratulated her for having so much business. But she said, “no, I’m swamped with paperwork, bills and invoices… Ugh, I hate QuickBooks!”

I made my friend a deal: I would do her bookkeeping for a month, free, if she came to the networking event with me. I wanted her to see the power of getting out there generating business rather than be mired IN her business.

She was hesitant to open her books to someone outside the business -even if we were friends. But she took a chance. We have been her bookkeeping firm ever since.

In the end, she got rid of the stress of doing the books and got back time by handing us her accounting. The bonus is she got to network, which brought in new clients, resulting in more money.

So this week I challenge all of you. If you’re spending countless hours doing your own bookkeeping, turn it over to DM Accounting.

And I invite you to attend the Summit Thursday May 19th or Friday May 20th with me. Women AND men are welcome. You can meet new people, generate more business and make more money.

Who wouldn’t want that?

Why?

By now you’re probably getting used to my stories… so here’s another one.

I recently showed a brand new client a detailed analysis of her company’s financial performance during Q1. The report showed that she was making double what she made last year.

Great news, right? Of course. But even greater was that for the first time she understood WHY she was making more money and WHERE it was coming from.

Our analysis showed that 2 of her new clients, who were also her two most profitable clients, are both hotels, which she had never targeted before.

In addition, our analysis also made it abundantly clear that one of her older clients was paying her more than 90 days past due, which was negatively impacting her cash flow.

Thanks to this analysis, our client changed her marketing strategy to target hotels. She’s since landed 2 more. She also set up a new contract with that older client that was costing her money, and changed his payment structure to ensure quicker payment turnaround.

These efforts were the result of good financial analysis which she had never done before working with us. Thanks to us, she was able to make smart decisions that put more money in her pocket.

That’s just one of the services we provide: valuable monthly and quarterly financial statements that will give you the kind of actionable information that you can use to make real changes.

Like our surprised client, you could find a new revenue stream or target a new market just by having good info and analysis.

At DM Accounting, we’re not just bookkeepers, we’re accountants who care about your bottom line – and helping you increase it.

Wishing you much success and $$$!!

What does that have to do with accounting? Sometimes, a lot. For example, a few years ago one of our clients caught a cold and wound up in the hospital with pneumonia. After four days she was released, but had racked up some staggering medical bills.

On the bright side, she was unaware that the cost of her treatment – the hospital stay, prescriptions, transportation to and from the hospital and subsequent doctor’s visits – could be claimed as deductions. We saved her $5,000 in taxes that year.

The IRS says you may be able to deduct expenses you paid for medical and dental care for yourself, your spouse, and your dependents if it exceeds 7.5% of your adjusted gross income. This includes payments for the diagnosis, cure, treatment or prevention of disease or any treatment affecting any structure or function of the body.

So let’s clarify, what is a medical expense, according to the IRS:

* Fees paid to doctors, dentists, surgeons, chiropractors, psychiatrists, psychologists, etc. for medical care expenses.
* Payments for hospital services, qualified long-term care services, nursing services, and lab fees.
* Payments for acupuncture treatments, smoking-cessation programs, and alcohol or drug treatment facilities.
* The cost of drugs if a prescription is written, except for insulin.
* Medical expenses such as hearing aids, breast pumps and supplies that assist lactation, oxygen and oxygen equipment, pregnancy test kits if you’re pregnant, etc.
* Admission and transportation to a medical conference relating to the chronic disease for yourself, your spouse, or dependent.
* Items such as false teeth, prescription eyeglasses or contact lenses, laser eye surgery, hearing aids, crutches, wheelchairs and guide dogs for the blind and deaf.
* Transportation costs primarily for and essential to medical care that qualify as medical expenses, including parking fees and tolls.

The complete list is longer, so make sure to refer to IRS.gov for specifics or better yet, let us handle it. We’ll help you sort through it all.

By the way, if you expect to have large medical or dental costs in coming years, it might be a good idea to set up and contribute to a health savings account (HSA) either through your company or your bank, it may be worth it.

Every year many people fail to calculate their medical expenses and wind up not taking the deductions they are entitled to. Don’t let that be you.

Hopefully we’ve seen the last of cold and flu season. Here’s to a healthy 2011!

So when one client of mine brought in a 12-pocket file folder, I thought wow, now that’s organization! Unfortunately I opened it up to find a jumble of receipts, invoices, credit card statements and even uncashed checks in no particular order.

That client wound up owing the IRS thousands more than he should have because he lost key documents that might have resulted in some large tax deductions. Does this sound familiar? Do you lack a workable organizational system when it comes to receipts, bills, invoicing and record-keeping?

Now is a great time to create a system that will help you cut through the clutter in preparation for next year. But where do you begin? Some people choose to go a traditional route, using a paper-based system with journals, ledgers, checkbooks, and files. But these days with so many computer-based tools, you could really go “paperless” and save time, money, and even trees.

Here are some of our favorites:

* QuickBooks Connects or QuickBooks Online allow you to manage your QuickBooks data on the go (computers/handhelds/ipads) and sync it all together.
* Instead of using a real shoebox, try Shoeboxed so you can scan and save your receipts to track business expenses quickly and easily.
* If you drive a lot and need to keep track of your mileage, try Tripper or Tap2Track. These apps keep detailed records of your driving mileage.
* If you charge by the hour, or simply need to track your time, check out Time Master+Billing or Pocket Punchclock.

Personally I am sometimes hesitant to try new things, but these apps are here to stay and are a great way to get organized using tools you’re already using everyday. Hopefully next year brings you lots of shoeboxes and cookie tins filled with lovely shoes and tasty cookies instead of old receipts and bills!

This notice from the Florida Department of State Division of Corporations is posted directly on their homepage (www.sunbiz.org). What does this mean for your business?

The fee to file your annual report is $150 (or $138.75 for LLCs). The reports are due January 1st and become delinquent if they aren’t filed before May 1st. In the past, the State sent out a postcard notice to your business’s address of record, reminding you to file your Annual Report before the due date so you didn’t get charged a late fee. But if you had changed your business’s address and you claimed that you didn’t get the notice, you were able to ask the State to waive the $400 late fee. They usually granted these requests, especially if the offender was a new corporate filer who may not have been aware of the requirement.

This year, however, the State revoked these waivers. Going “green,” the Division of Corporations sent e-mail reminders asking you to file on time instead of postcards. Those without an e-mail address on record didn’t receive any notice, yet they are still liable for the $400 fee.

Don’t let this happen to you! Make sure you keep a current e-mail address on record with the State. You can set up a personal reminder in your electronic calendar that reoccurs every year and prompts you to file your Annual Report by May 1st. This will help you avoid these late fees and allow you to keep your $400!

One of the biggest benefits of tax planning is that you have time…time to research new deductions and credits, but also to correct past mistakes you have been making in your planning. Here are 9 planning pitfalls to avoid:

1. Not Planning a Tax Strategy
A little tax planning help can go a long way, saving you valuable dollars each tax year. Tax planning opportunities for the year are only viable until January 1st, so don’t miss out on the chance to maximize your tax situation.

2. Not Maximizing your 401(k)
Each contribution made into a 401(k) plan reduces your taxable income, so take advantage. If your employer contributes to your plan, you are missing out on free money if you do not participate.

3. Not Managing your Investments
A large number of 401(k) retirement plan participants are too conservative in their investments. Actively follow your choices year round. Research your options every so often to keep them up-to-date, considering the amount of time you have before you will need the funds.

4. Ignoring Tax Entitled Deductions
Don’t forget about your charitable donations! Expenses you acquire while working for a charity, such as the cost of ingredients used to cook at a soup kitchen, can be added to your cash contributions when you add up your deductions. And although you may not think the clothes you have donated to charity are worth much, you may be surprised to discover how much these items actually sell for. If the clothes are in good condition, consider using valuation software to determine how much to claim.

5. Not Deducting Medical Expenses
Pay medical expense with pre-tax dollars whenever possible. Individual taxpayers usually will not reach the high threshold for deducting medical expenses on their own tax returns, but employers may offer reimbursement plans that allow you to pay for medical expenses with pre-tax dollars. This stretches your money a lot farther.

6. Not Tracking Carryover Items Year-to-Year
Annual deduction limits may not let you claim all of your charitable contributions or capital losses. Carry the unused amounts to the next year’s income tax return.

7. Missing Quarterly Estimated Tax Payments
If you have the chance to pay your estimated taxes each quarter, try not to wait to put it off until you file your income tax returns. You may have to pay an estimated tax underpayment penalty for each quarter that the taxes aren’t paid.

8. Worrying about the IRS
Don’t be afraid of an IRS audit. As long as you are taking legitimate deductions, you will get good results if you are scheduled for an audit. Keep good records and receipts, and seek help from a professional if you are uncertain about taking the deduction.

9. Not using a Professional
Tax planning can get a little confusing. Gather your personal questions and ask for guidance from tax professionals in your area. Be sure to bring your personal information so you can receive specific answers. Investing in their advice could help you save more in your tax return and stop you from making any mistakes.

Guilty of any of these mistakes? Don’t hesitate to begin tax planning as soon as possible. The improvement in your tax and retirement situation will carry on into the future, saving you taxes for years to come.

Federal tax laws offer tax credits to those who take advantage of them. These credits are fairly generous, and are typically divided into different categories:

1. Benefiting the Environment: The largest group of credits currently available, it is designed to encourage investment in equipment or developments that save energy or protect the environment
2. Benefiting Families: Credits affecting family life, such as the “First Time Home Buyer” credit, the Child Care tax credit and the Dependent Care tax credit
3. Benefiting Disadvantaged or low-income people: Credits designed to encourage employment or investment that benefits certain groups
4. Certain taxes: These credits refund certain taxes, such as FICA taxes on tips, foreign taxes, and gasoline taxes for farmers and off-highway-vehicle users
5. Education: Credits available to those pursuing higher education
6. Real Estate- Credits that promote home sales, renovations and reconstruction of existing buildings
7. Other Investments: The smallest group of credits encourages investments that are considered socially beneficial

Remember to always keep your eyes peeled for new credits effective for the 2010 tax season, so you don’t miss out on the savings you deserve!