Running a successful home based business can give you tremendous joy, happiness and fulfillment. This will be more so if you had been working for a Boss before you started your own home based business. What is it that makes this huge difference in the lives of these entrepreneurs working from home?1. You are the Boss and the Lord of all that you survey however small your business might be. This will give you a lot of self satisfaction and pride. No longer will your Boss be breathing over the back of your neck. You can make your own decisions courageously and fearlessly.2. You no longer have to commute long distances. There are many who spend at least 4-5 hours commuting to work and back. It is a pity that such valuable time is lost day after day and now you can utilize this time in your home business. Furthermore you will save a huge amount on your gas bills.3. When to start work and the number of hours you will work are all decided by you. This does not mean that you will work only a few hours a day thereby neglecting your business. The fact is that you can make it flexible to look after the kids rather than send them to day care or transport the older ones to school.4. One of the main reasons for working at home is to spend more time with the family and your home based business provides this wonderful opportunity. You can reschedule your work whenever the situation demands and be of assistance to your family. Your physical presence at home will certainly be a morale booster to all the members of your family.5. Much money that would normally be spent on commuting to work, on daycare and other matters could be saved when you are based at home. In addition your spouse and the children could also assist you in your business when required thus enabling substantial savings.6. Office politics is pervasive in most work places. Some people know the art of survival in any situation whereas some cannot. Most people detest carrying tales to their Bosses, back biting and currying favor. For such people a home based business is indeed the opportunity they have been longing for to get out of such an environment.7. As an employee you never had the opportunity to give free play to some of your inherent talents. In your own home based business there are no limits or restrictions and you have the every opportunity to display all your skills. You will indeed be pleasantly surprised to see the talents and skills that have been lying dormant within you all these years.8. As the owner of a successful home based business you are no longer an ordinary employee eking out a living on a 9 to 5 job. You get recognized by the banks, small business organizations and by the community as a successful businessman. This boosts your pride and self esteem.There are bound to be stressful situations and ups and downs in running your home based business. If you work with dedication, commitment and continue to remain focused on your business the joy of being the proud owner of a successful business will outweigh everything.
Health Reform Changes Affecting Small Business
“Don’t tax him. Don’t tax me. Tax the guy behind the tree”- attributed to Former Congressmen Rostenkowski
Owners of small businesses and their workers could be severely impacted by the recently enacted health reform legislation. Some key provisions related to tax credits, new excise taxes, penalties, and some higher taxes, all of which depend on a number of factors such as number of full time employees in the business, average incomes of the employees etc. This article will provide you an overview of its significance to self employed taxpayers who have less than ten full time employees.
Generally, the present Obama administration and Congress have noted that the new health reform proposals will provide better insurance for small businesses at a lower cost, which will create more jobs. However, there is also a lot of strongly negative feelings among the business community. Let me present some of the provisions so that you can judge for yourself and plan accordingly.
Benefits to small businesses: Despite the negative press about the law, there really are some positive changes that will affect small businesses.
Small Business Exchanges: Small business will be able to pool their resources in state exchanges called “Shop exchanges” in order to buy insurance. Normally these exchanges apply to companies who have less than 100 employees by 2014;however, states have the option to limit access to these exchanges for companies of under 50 full time employees. Premium expectations are expected to reduce overall insurance costs by 1-4% per year for each employee, which is a very good provision under this plan.
Tax Credits for certain small employers who provide insurance. Generally, if you have fewer than 50 full-time employees, you don’t have to provide health insurance for your workers. However, if you do provide insurance, you might be eligible for a yummy tax credit, which is a dollar-for-dollar reduction in your taxes.
To be eligible for this credit, you have to have less than 25 full-time employees whose annual average earnings (not counting the owner) of no more than $50,000. For companies of 10 or fewer employees, you would be eligible for a 35% tax credit (which goes up to 50% after 2013) in later years, if your average full time equivalent wages are less than $25,000 per year. This credit begins in 2010 and goes till 2014. There is a second phase of the credit that small business would get up to 2016. Thus, qualifying small businesses can get this credit for up to six years.
Sandy’s elaboration: This credit sounds great, but having it apply to small businesses (of no more than 10 full-time workers) and who average under $25,000 of wages will substantially reduce its applicability to most businesses. Estimates are that this will benefit about 7% of self employed businesses.
No more lifetime caps: For most health insurance, there is a $2,000,000 lifetime cap for usage. Starting immediately, these caps are to be removed. This could allow coverage for a number of small business folks who might have exceeded the cap.
No pre-existing conditions: starting in 2014, there will not be any pre-existing conditions. Thus, even if you have a major medical problem, you will be guaranteed to get health insurance. This is a great provision that will allow coverage for those small business folks and their employees who might not have been able to get insurance coverage.
Dependent children can be kept on parent’s insurance through age 26: Normally, kids who turn age 21 have to get their own insurance and can’t be kept on their parent’s insurance. This will be changed so that dependent children who are under age 27 can be kept on the parent’s insurance. This becomes effective on March 30, 2010. I should note that although dependents under age 27 can be added to the parent’s insurance e policy, there is no requirement that an employer add them to the policy.
Small Businesses are exempt from penalties for failing to provide health insurance: Generally only companies that have 50 or more full-time employees need to provide health insurance coverage or face penalties. However, since small businesses of under 50 full-time employees don’t need to provide any coverage, they are exempt from these “Pay or Play” penalties.
Sandy’s elaboration: If you have a business with 50 more more full-time employees, you are indeed required to provide health insurance.
As you can see, there are some good provisions for both the business owner and for small businesses. Thus, why the strongly, negative comments from the business community? The reason is that there are a lot of congressional “gotchas” that affect everyone.
Problems with the healh reform legislation
New taxes: There are a number of new taxes and costs that will beef up the overall insurance costs for small businesses. For example, there is an income tax increase starting in 2010 of between 5%-10% for those who make over $200,000 of adjusted gross income. In addition, Medicare has been increased for everyone by.9% for all employees and for the owner who make over $200,000 of adjusted gross income and is single. Married taxpayers filing joint returns have to make of $250,000 of adjusted gross earnings in order for this.9% Medicare surcharge to kick in. This may not sound like a lot, but, for someone earning $300,000 in salary, this could result in a $900 increase in Medicare taxes for each employee in that income bracket regardless of profitability of the business! In addition, if the adjusted gross income of the worker or the owner is over $200,000 ( for single taxpayers) or over $25,,000 (for married filing joint taxpayers), there will be a 3.8% Medicare surcharge on all of their interest, dividends, rents and royalties. This will also apply to dividends from S Corporations. So much for saving costs!
New excise taxes: In order to help pay for this new law, there are some additional excise taxes on many medical devices that ordinarily aren’t purchased by most people. Thus, there will be no excise taxes on glasses, hearing aids, and contact lenses. Most other devices, however, will probably have the excise taxes apply to them. In addition, there will be additional taxes on the health insurance companies, some insurance plans and pharmaceutical companies. You might wonder how these additional taxes apply to self employed taxpayers. The reason is that these additional costs will be passed through to everyone including the self employed.
Additional 40% excise tax on Cadillac health insurance: The new law places a whopping 40% excise tax on high-cost employer-sponsored health coverage, often referred to as “Cadillac” health plans. This tax applies to premiums that exceed $10,200 for single coverage and those that exceed $27,500 for family coverage. There are some increased thresholds for retired taxpayers who are age 55 and older and for those engaged in “high risk occupations.” Thus, if you want top notch expensive insurance coverage, you will pay a lot more to get it. This even assumes that an insurance company will even offer it at all.
Increased paperwork: Generally those who do provide insurance through the exchange for their workers will need to fill out some potentially new paperwork showing the name of the employee, the amount of premium paid the contribution by the employee, notification to the employee about the coverage etc.
Midsize to large companies much provide health insurance: If you have a company consisting of 50 or more full- time employees (part time will be counted on a fractional basis depending on their hours), you are required to provide medical insurance or face big penalties. However, this is required regardless of profitability. Think about this. This could result in a number of unprofitable or marginally profitable companies going broke, which could actually substantially reduce jobs. In addition, this would spur either the hiring of more part time at the cost of reducing the number of full time employees or increase the sucking sound of companies going to places like China or India. The result of all this would mean a lot less jobs.
Bottom Line: Although there are some great provisions in the new law such as waiving pre-existing conditions and lifetime benefit caps, the increased taxes and costs incurred for most small businesses will probably exceed the decrease in health premiums resulting in an overall increase in total health costs and taxes to self employed businesses. Thus, I don’t see any job creation resulting from this law. In fact, it may well cost a lot of jobs.
P.S. Check out my free lesson on “How to write off all your medical expenses!” Free Lesson http://www.PocketbookProfessor.com
By Sandy Botkin CPA. Esq
Sandy Botkin is the Chief Learning Officer for Pocketbook Professor, an online training center where entrepreneurs, small business owners, and home based business owners can learn how to lower their taxes big time, get out of debt, and increase revenue.
Sandy is a CPA, Tax Attorney, and the #1 tax trainer in the country. Sandy has been training millions of small businesses how to get their taxes down to the legal limit for over 30 years. He has taught tax reduction at Donald Trump and Tony Robbins seminars and is a bestselling author of the book “Lower Your Taxes Big Time” and several other bestselling books. Sandy is a frequent guest tax expert on NBC, ABC, Fox, and CNN.
The Awesome Advantages To Owning A Roomba Vacuum
In recent years, it seems like technology has taken over our lives. Sometimes it’s hard not to wonder whether all this technology really does make things better, or is just technology for technology’s sake. But every now and then an improvement comes along that is clearly a big step forward from where we were before. The Roomba vacuum is such a step, and it’s unique design saves people a lot of time and energy.
There has always been one major problem with vacuuming your house – and that’s the fact that you have to do it at all! There are very few people who jump up and down with excitement at the idea of pulling out the vacuum cleaner. Most people would rather put their feet up and watch a movie, or read a good book. Wouldn’t it be great to have your floors vacuumed, without you having to do the work?
Well, that’s exactly what the Roomba vacuum is designed to do. It’s a huge leap forward in vacuum cleaner technology, making it an effective and smart way of vacuuming. The Roomba vacuum has a special robot inside, which is designed to make it move around and search for dirt on your floor. It will be able to negotiate its way around furniture and any other obstacles in your room. So you don’t have to worry that your precious furniture will get damaged when the Roomba vacuum bumps into it.
If you look around, you’ll find plenty of places that sell the Roomba vacuum. Most vacuum cleaner stores now sell them, and so do many electronics stores. Considering how advanced they are, they’re quite reasonably priced. That’s even more the case when you consider how much people would be willing to pay for a vacuum cleaner that did all the work for them!
A Roomba vacuum would make a great gift for someone who has difficulty moving about, or who struggles to push a vacuum around the room. It also removes the need to carry a heavy vacuum from room to room. They’re a great present for a grandparent, parent, or anyone else you know that could do with some help in vacuuming. Anyone who receives a Roomba vacuum will appreciate the care and thought behind your gift.
The directions are easy to follow, which makes it easy for anyone to work out how to use their new Roomba vacuum cleaner. So whether it’s for yourself or for someone you care about, take a look at the advantages of a Roomba vacuum and buy one today.