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!

It’s estimated tax time! Your third quarter estimated tax payments are due on September 15th, 2011.

Don’t forget to sign up for tax tips and reminders by clicking the TAX TIPS tab on the top of the page.

Tip us off with your email address, and we will tip you off with important tax reminders and tips. And don’t worry, we’re not going to spam with you relentless marketing messages – just information that can help YOU run your business more efficiently.

Want to see all important tax deadlines in a nifty, printable list? Check out our our hot-dates-tax-calendar.

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.

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.”

If you don’t already know one of the most amazing US Museums has been embroiled in a decade + law suit of epic proportions. The Barnes Foundation, which “houses one of the finest collections of nineteenth and twentieth-century French painting in the world” is about to be moved six miles from it’s original home outside “Philly Proper” to the center of Philadelphia.

This to be a tragedy for many reasons. Chief among them is that the collection has been held in the former residential home of Albert C. Barnes, founder and original collector of this vast and amazing collection of artworks. A deep eccentric, Mr. Barnes stipulated in his will that not only should the paintings remain in his house, but they should *remain exactly as they were placed* as he himself curated the works. In addition to his collection of paintings he had a fondness for the American Amish; right next to a Cezanne you might find a highly detailed, hand made linen trunk hewn and painted by hand. It’s an odd, but beautiful coupling.

It’s a tragedy for the art world and art lovers because this setting is so unlike the normal “sterile” environments of most museums. Its personable, warm, and emotionally tactile. It’s a tragedy for the American tenet “right to personal property”. How the courts and the judgement of questionable trustees could supersede this man’s personal, explicit wishes is a complete injustice. Not to mention, how this artwork might go missing or damaged in the upcoming move is detailed in an interesting article here.

RIP original Barnes Foundation.

In October 2010 I was approved for an SBA loan which I used to expand my business and hire another employee. It was a great program, easy to apply to and obtain if you had the proper credentials like decent account receivables and a good credit score. I recently referred a client to the program I used, and I found out it was terminated by the SBA in April of 2011!

I used the lender I did because they are one of the largest SBA lenders in the US. Now the only two programs this particular company offers are

(A.) A loan to Veterans or their kin

or

(B.) a loan for small to medium businesses who EXPORT and have been in operation for at least 12 months.

I recently saw a post from someone who said small business could turn the economy around if all of them hired at least 1 person. I would really love to know what prompted the SBA to cut off a program that could be so instrumental in rebuilding our economy and helping our entrepreneurs. #dumbideas

If you are like me, then you like it when you score a steal. Hey, you might even smirk a bit when you manage to save a few bucks, or a couple of (GOOD!) cents on a gallon of glass. If so, and you are an online shopper, check out this article from the NYT on:

http://www.shopobot.com/

From the article: “People can track the prices of certain items, receive alerts when a price declines past a certain threshold and get recommendations on where to buy items for the lowest price. For example, Shopobot can tell a user that a digital camera was $50 less on Amazon two weeks ago and is now least expensive on Newegg. Shopobot crawls the Web sites of 12 retailers, including Amazon.com, Newegg.com and Walmart.com, several times a day or every couple of hours for popular items. It does not accept feeds from the retailers like many comparison shopping sites because the retailers often misrepresent their prices, said Julius Schorzman, another co-founder, who previously worked at Amazon.”

But here’s your reminder that your second quarter 2011 estimated tax payment is due on Wednesday June 15th, 2011.

Don’t forget you can always refer to our hot-dates-tax-calendar to keep track of tax deadlines. Only we could pull off having “Hot Dates” and “Taxes” appear in the same sentence, right?

Because they give their customers reason to feel suspect, unsafe, and suspicious. Or at least that is how I felt last week. Let me explain…..

I am, admittedly, paranoid about maintaining a stellar credit rating. That said, I’m human, and  for the first time in a many, many years I missed a credit card payment. I was really frustrated with myself for overlooking it, but it does happen….even to (SHOCKER!) financial professionals.

I decided to enroll in an automatic payment program offered by my bank to avoid this pitfall in the future. I enrolled and was warned by the bank the process wouldn’t be complete until I received written confirmation. This month when my credit card statement rolled in, I logged in to make my payment. I received the following message on my screen:

“Our records indicate you have enrolled in AutoPay. If you choose one of the payment options below, it will be processed IN ADDITION TO* your scheduled AutoPay payment.”

*emphasis mine

So what does that statement say? It says it will process my payment IN ADDITION TO my AutoPay payment right? I remembered that I hadn’t received that “written confirmation” yet. But wait……the payment screen in front of me says I am enrolled, right?

HERE IS THE LESSON PEOPLE

If you ever, ever, ever receive any sort of confusing communication from a bank call to check it out! Which I did; I asked the customer rep if they would be pulling the automatic payment from my checking account. The rep, who was very kind, said “M’aam I show you are enrolled in AutoPay but it’s not yet activated so you have to make a payment.” I asked her why the web site was telling me if I made a payment it would be in addition to the scheduled AutoPay payment……she didn’t (surprise, surprise) have an answer to that question.

If I hadn’t called I would have tarnished my credit report (not to mention my financial self esteem). Additionally I would have been whacked with a $35 late fee, and probably a usurious change in my “good customer” interest rate. I wanted to share this experience with you so that the next time you set up an automatic payment with a banking institution, you make sure all your i’s are dotted, your t’s are crossed, and you make sure that payment goes out on time.