SIX IMPORTANT TIPS FOR GETTING YOUR 1099s RIGHT

1. You must send a 1099 to any subcontractor you have paid $600 or more to in a calendar year.
2. 1099s are due to the recipients by January 31st. If the 31st falls on a Saturday or Sunday, 1099s are due the first business day following the 31st.
3. You should have a W9 form on file for each of your subcontractors. The form can be downloaded here.
4. A 1099 can be “bounced back” from the IRS if it contains mistakes. The most common mistake is the incorrect spelling of a name, or an incorrect social security number.
5. Make sure forms are issued to the *exact* name which appears on the person's social security card. In other words, don’t issue a 1099 to “Joe” if Joseph is the name on file with the Social Security Administration. Double check social security numbers and make sure mailing addresses are current too!
6. Your 1099s must be submitted along with a 1096 form to the IRS by February 28th. The 1096 form is a summary form that lists the total amount of 1099s you are submitting, plus the total dollar amount of all of your 1099s combined.

1099 forms are expensive, and you can usually only purchase them in bulk. Good Cents Bookkeeping, Inc. has had a great experience using http://filetaxes.com. They are cheap, provide digital copies of all forms prepared, and send everything directly to the IRS on your behalf. Now THAT makes Good Cents!

I have a confession. I am not financially perfect. Many “financial professionals” aren’t either. You just look at Wall Street to see how many “pros” make mistakes – often big ones. But I want to come clean on a common mistake I recently made, and one I see my clients make often. Sometimes savings doesn’t make good cents.

I took out a business loan in December 2010 for $7,500.00 with an interest rate of 7.5% . When I received the money, I socked it away in a traditional savings account paying a measly 1% (sad, but standard). Sure there are other higher yielding investment vehicles, but it was important for me to keep this cash liquid. My goal for this loan was simple: bridge the “cashflow gap” or the time it takes a client to pay from the time the work is performed.

I decided to crunch the numbers and figure out how much  it was costing me to “save” that money each month. On average my loan’s monthly interest charge has been $42.76. On average my monthly income from that savings account has been $4.64. So basically it is costing me $38.12 to “save” that money each month.

It’s an instance of “Savings is Stupid”. Instead of using some of the “savings” to pay down the balance on the loan, and lowering my monthly interest expense, I have “hoarding” the money because of fear. I am afraid to let go of my “savings” even though it is COSTING me money.

I have had clients have 6 figure savings accounts and owe a measly few thousand in credit card debt. Letting go of any money in “savings” is connected to some highly-charged, emotional stuff. Getting clients (okay….myself) to realize it is okay, perhaps even smart, to pay off smaller debts while still maintaining a health savings account can be a good move.

This choice will not be for everyone, and please consultant with your  financial team before making any major financial decisions. I do however implore you to look at both your savings and your debt balances and see how things might shift for you if you shift some money around. As for me? I cut a $1,500 check today. I am not ready to empty that savings account because clients defaulting is always a real “business threat” and I have employees to pay. I am however ready to trust a bit more, while saving more on those monthly interest charges.

My father always says “The person of every person’s life is to serve as a lesson to others”.

Another words, we can learn from each other. Wouldn’t it be wonderful if you could share your most valuable financial lessons with other entrepreneurs?*

Secretly over the past few months I have been working on a course to teach bookkeeping over the web. It will be an entirely different web site and business but Dear Readers I need your help. My passion is helping small business owners, and often times we have problems that are similar if not the same. I want to REALLY tailor this course so that attendees get a

$~BANG FOR THEIR BUCK~$

and walk away with as much education as possible. I would love for you to answer three questions about bookkeeping, finances and your business so that we can be a lesson to others.

1. “I find the most challenging thing about bookkeeping to be…….”
2. “The most valuable lesson I have learned about bookkeeping and/or finance in my business is……”
3. “From the beginning, I think all entrepreneurs should  know ________________________ about bookkeeping.”

You can answer in the comments below or email info at goodcentsbookkeeping.com (replace the at with the symbol). Thanks so much!

*All submissions are anonymous. Of course, if you care to plug your web site or business I will happily include it with your permission.

One of my DJ friends on facebook posted this today and I am so happy it came across my feed. Even though the post is geared towards artists it contains some real productivity gems. I often find myself getting caught up in “busy work” which wastes the day, but leaves me feeling unaccomplished (oh how I do love a neat file cabinet or a clean desk – that doesn’t bring me in the big bucks however).

Here are a few of my favorite things…..

“To succeed, you have to turn up……. Professionals do; wannabes just think about it.”

“…he identified the devil on your shoulder that stops you producing creative works, and gave it a name: Resistance.

Resistance is what makes you sort through your sample library recategorizing all of your loops and hits, instead of working on your tune. Resistance is what makes your hand move towards the Facebook bookmark to check your fan page, instead of working on your tune. Resistance is what makes you suddenly decide to rearrange yourstudio to put the speakers in a different place, instead of working on your tune…” Resistance in this office means organizing and reorganizing things.

“Every time you miss the mark, treat it as training – or if you like, as “nudging your guided missile closer to its target”. We always learn more from our failures than our successes. Without the little “nudges” that each almost-success gives us, we simply can’t hit our final, successful goal.”