Business.com |
- 4 Ways to Improve Email Marketing Engagement
- The Truth About Virtual Training For Your Business
- Eliminating Excel from the M&A Process for More Successful Deals
- 5 Steps To Speed Up A WordPress Website
- Do Small Businesses Pay Taxes?
| 4 Ways to Improve Email Marketing Engagement Posted: 11 Mar 2020 09:47 AM PDT  Is your brand taking advantage of email marketing to grow to its fullest potential? If not, it's missing out on the opportunity to build strong customer relationships, improve engagement and drive sales. On average, around 102.6 trillion emails are sent and received each year, and that number continues to increase over time. That means there are brands just like yours fighting to get your audience's attention when they check their inbox. With so much competition, it's crucial that your subscribers pay attention to your content to increase your conversions and prolong engagement. Why use email marketing?There are several reasons why your business needs email marketing to reach its goals and continue growing. Increasing conversionsYou can create email campaigns that promote your products, improve engagement, and increase conversions. A whopping 96% of marketers use email marketing to drive traffic to their website. Receiving offers and fresh content straight to subscribers' inboxes will familiarize them with your brand until they feel ready to purchase. Offering convenience and accessibilityNot only is it convenient for businesses to spread their marketing messages, but it's also easy for subscribers to receive that information. They can access their inbox through any device of their choice with little effort making it a great marketing tool. Consumers can keep their favorite content and offers from your brand in one place while keeping up with your business' latest updates. Providing personalizationBuilding an email list lets you collect user data so you can learn more about your subscribers and pay attention to their behaviors. It also helps you create future email marketing campaigns that are sure to improve user engagement. The more information you have, the easier it is for your brand to tend to customers' needs and drive sales. Reaching mobile usersEmail makes it easy for those on any device to connect with your business. When people are on the go, they can still take advantage of your offers and receive your marketing messages. The easier it is to reach subscribers, the quicker you can solve their pain points and move them through the conversion funnel. In this article, we're going to take a closer look at the ways you can improve user engagement through email marketing by:
Let's get started! 1. Solidify your goalsIt's important to set clear goals that streamline your focus on a few aspects of your campaign at a time. Keeping a couple of objectives at the forefront of your campaign forces you to concentrate on a specific area to improve results. Stick to one or two goals so your campaign's progress is also easier to measure. From there, you can move onto other goals for your next campaign. Some common goals for email marketing campaigns include:
To reach your campaign goals, you need to know your audience so you can create relevant content for them. Create buyer personas for your audience that give you information about their needs as a customer, such as demographics, location, pain points, buying behaviors and more. The more details you include, the easier it is to create relevant, tailored future campaigns. 2. Know your audienceBefore you start sending out campaigns, you need to assess how well you truly know your target market and can tend to their needs. It's easier to send optimized emails when you know your target audience as you have the information you need to resolve their pain points and cater to their interests. How well do you know your audience? If you don't know them well, then you need to gather user data, collect feedback, and research your competitors to get ahead of the game. Surveys are a great way to ask personalized questions based on your customers to receive the most helpful feedback. You can ask exactly what you want and let users add their own answers so they can be as honest as they need to. When reaching out to your audience, keep the questions short, simple and straightforward. You risk a low form completion rate if you ask for too much or don't ask relevant questions. Study your website analytics to get to know your visitors better. Pay attention to the content they spend the most and least time on, which webpages are most popular, and where users drop off. You'll likely notice a disturbance in the user experience (UX) or another issue that causes visitors to turn away regularly. Take the information you've gathered and turn it into buyer personas, which are profiles of your customers. Buyer personas give you details about your customers in one place, including their demographics, buying behaviors, pain points and more. 3. Segment your listPeople sign up for your email list for different reasons, and each person has a different need that your brand helps them solve. That's why it's crucial to segment your email list before sending out campaigns. When you segment your list, you're able to create and deliver emails tailored to that group's needs and interests. Segmented campaigns have the power to increase revenue by 760% because they personalize the experience your brand gives consumers. Sending relevant emails saves you from a high unsubscribe rate, low engagement and annoyed subscribers. When your brand listens to customer needs and concerns, it builds the foundation for strong customer relationships to take place. People want to feel like more than a number when they engage with your business, and providing relevant content is one great way to do so. You can separate your list a multitude of ways depending on the goals you've set for your campaign:
4. Monitor your campaignHow proactive are you about measuring your campaign's performance? You need to track, monitor and collect data about your email campaign to measure its results accurately. Create improved future campaigns by analyzing your data and making a note of what worked well and what didn't translate with subscribers. Some common metrics to measure for your email campaign include:
Depending on what email marketing service you use to send your campaigns, the process of monitoring your campaign's analytics will differ. What's important is that your marketing team consistently tracks its performance and recognizes any major changes in conversions. It's time to make your next email marketing campaign a successThere's no doubt that email marketing is crucial to your business's growth and success. Through email, your business can communicate with subscribers, collect feedback, and nurture leads until they turn into loyal, paying customers. How will you refine your next email marketing campaign so you see better engagement? |
| The Truth About Virtual Training For Your Business Posted: 11 Mar 2020 09:31 AM PDT  Companies are expected to constantly retrain their employees to ensure that they have the skills needed to survive and thrive in a modern workplace. Despite this emphasis on workplace training, many business owners refuse to invest in workplace training regimes because they feel as if they produce lackluster results or are simply a waste of money. In reality, proper workplace training can rejuvenate your ailing workforce, avoid challenges, and help your company get back on its feet after a period of commercial stagnation. What's the truth about virtual training initiatives, specifically, and how should business owners go about approaching them to achieve the best results possible? Here's the truth about virtual training for your business, what about it to embrace eagerly, and what to ignore. Not all training is the sameThere's no simpler way to define virtual training regimes than to state that they are often radically different from one another. One company can provide an excellent virtual training software that helps your workers conquer new, complex subjects in a relatively short timespan. Others will provide you with a lackluster product that frustrates and confuses your workers like never before. Any business owner considering such virtual training regimes should thus understand that it's imperative to do your homework well ahead of time to find an excellent training service that's the right fit for your specific workforce. Look at what's worked for others, yes, but know that nobody can provide you with the right answer for your unique business because it's unlike every other one in the marketplace. There are two primary types of virtual training; the first type of virtual training happens in your office, where employees learn on company machines by using software purchased by the company. The second type of virtual training is defined by allowing employees to learn at home, where they can access company-acquired software on their own personal devices to learn in their free time. Much in the same way that confined space training is different from customer service training, these various types of virtual training will differ from one another. Of the many pros and cons of workplace training, there's no denying that the worst aspect of it is that there's no in-person teaching occuring. Thus, it's essential that your workforce is capable of digesting complex instructions without the help of an in-person expert to facilitate the learning process. To make the most of any virtual training regime, your company will need self-starting employees who are capable of informing themselves without the need of a manager breathing over their neck every five seconds. Consider that before purchasing any expensive workforce training software which may require an expert to be made of meaningful use. You should also know that an extensive plan to guide your employees along their journey will be needed to ensure your money isn't wasted. Any business owner who wants to do right by their workforce should set some time aside to read up on creating a plan to effectively conquer virtual training without wasting their time or capital. Only after you've devised such a plan should you move on to the next step of learning about virtual training. Consider the tech at playYou can't make good use of virtual training if you're deeply unfamiliar with the latest technological advancements. You don't have to be a regular IT expert, but knowing the basics is a necessary facet of taking advantage of this new kind of training. Business owners who aren't up to date on how virtual reality technology is being leveraged to maximize training opportunities could be dismissing a tool that proves incredibly useful in their specific circumstances. Virtual and augmented reality aren't the only innovations which are making virtual training easier and more affordable than ever before. The prevalence of smartphones and other small, handheld digital devices is making it easier and easier for workers to study up at any time of day in virtually any place. Many workers like to study from home or on their commute, but won't be able to due to a lack of technological access. By providing your workforce with smartphones or similar digital equipment they need to access complex training software, you can retrofit a dying workforce and turn it into one that's ready for whatever the future brings with it. Virtual training labs, too, are worthy of the consideration of any employer who wants to add a modern flair to their workplace recruitment and training strategy. We've seen an increase in the usage of virtual training labs over the past few years for a relatively obvious reason - they're now cheaper and easier to use than ever before. Indeed, entire companies have cropped up in the past few years just to market these and related services to other businesses trying to retrofit their workforces. Virtual training labs are popular because they claim to reduce the loss of efficiency that occurs when in-person expertise isn't offered to a person learning a new, complicated subject. While it's different from having somebody literally right next to you, a virtual training lab can give the impression that you're being taught by somebody who's "right there," which in turn makes it a more human, fulfilling, and engaging experience for all involved. Know how to do it with successFinally, business owners who are considering virtual training initiatives should study up on how to do it with success unless they want to waste valuable time, money, and energy. Begin by clearly stating your goals and asking yourself how a virtual training regime will help you meet them; if you need to ensure your workforce is up to date on the latest technology, for instance, you should be asking yourself how this particular piece of software will introduce them to and familiarize them with such technology. If you're looking for warmer, more positive customer relations, ask yourself if other methods might be far preferable. Of course, anybody who doesn't take time to read up on common tips for succeeding at virtual training is doing a disservice to themselves and their company as a whole. Knowing how to only pick that content which is relevant to your workforce won't just save you money, for instance, but will also ensure your employees are more engaged when they begin their digital learning sessions. After all, who wants to pay attention to a subject that has nothing to do with their daily responsibilities? As you'll come to realize sooner rather than later, business owners and managers must play an active role in the selection of training materials if they want to reap the dividends of virtual training regimes. You should also know that sometimes mixing virtual training with in-person training provides the best results. Everybody learns differently, so don't think there's a one-size-fits-all solution that will ensure all of your workers leave with more skills than they ever possessed before. Sometimes, allowing certain workers to train by using digital technology while enabling others to receive in-person instructions is the only surefire method for success when it comes to workplace training. Before long, your company will be achieving more progress than ever before when it comes to training, all thanks to your reliance on digital technology. Virtual training programs can't totally replace more traditional training methods, but they're quickly becoming appreciated around the globe thanks to their low-cost, high-reward nature that's only likely to improve as time goes on. |
| Eliminating Excel from the M&A Process for More Successful Deals Posted: 11 Mar 2020 09:26 AM PDT 
Excel has been the modus operandi in the world of M&A for decades now, but it's time for that era to end. Not only is the traditional methodology out of touch with the industry's current needs, but it's also not nearly as secure as it needs to be. In today's digital world where systems like email are easily hacked or breached, it's imperative for data to be protected, especially when that data involves confidential information and millions of dollars are on the line. What are the challenges of using Microsoft Excel for M&A deals?Sending Excel trackers back and forth through numerous email chains leaves your data and information completely unprotected. Should your email be compromised, all your extremely confidential data can be stolen, risking the success of the deal. When handling a multi-million dollar deal, you do not want any risk of compromising data or missing vital details because it's lost in an email chain. Even more, you don't want that data to get into the wrong hands, putting the security of the companies involved at risk. Not only do Excel trackers leave your information unprotected, but they create unnecessary batch work for everyone involved. Often times, people end up doing duplicate work or work that's never needed or even looked at, completely taking away any efficiency from the process. Though Excel trackers may have been the most efficient way to get the job done in the past, it certainly is not anymore. The problem is the fundamental processes M&A was built upon was originally based on much more predictable, stable industries, such as manufacturing, and has only existed since the 1950s. Though the M&A industry is young, when you think about how the industry processes haven't changed since the 1950s it kind of makes you want to bang your head against the wall. So much has changed since then both culturally and technologically, how is it possible that the fundamental system for how M&A deals are done hasn't been updated? Shockingly, there is no real standard or evidence-based approach to completing M&A deals. In such a prominent field where millions of dollars are being handled, you would think - or hope - that there would be some evidence behind how these deals are being done. Realizing that the biggest companies in the world are conducting M&A deals with no real framework, or at the very least a highly inefficient one, makes you wonder how the industry has gotten this far at all. Agile methods are better suited to the dynamic world of M&AThere's a new M&A methodology on the horizon and it's called Agile. Turning away from traditional Excel batch work and pivoting towards Agile methodology will modernize an antiquated industry, bringing it up to speed with current standards by focusing on meaningful progress, transparency, and real-time collaboration. If the success rate of M&A deals is ever going to increase, disrupting the industry with a new framework needs to happen sooner rather than later. Agile management has become popular in the tech community and with companies that are serial acquirers. Companies like Google, Atlassian, and Cisco have already started applying Agile practices to their internal M&A functions, resulting in optimization of time, effort, and capacity to improve enterprise effectiveness. Agile values meaningful analysis of data to ensure a deal is completed successfully based on validated assumptions and accurate information. How to implement Agile into your M&A processSo how do you begin to implement Agile to your M&A process? First, as cliche as it may sound, comes a change in mindset. M&A industry professionals are often stuck in a certain way of thinking that's grounded in a rigid playbook structure, not allowing for an easy response to change. Once you get over this initial hurdle of changing your frame of mind from set-in-stone to receptive to change and transformation, the rest comes easily. After a change in mindset, a shift in the work environment is next. Agile values people over processes, meaning fostering a collaborative workplace is necessary. Teams need to feel supported throughout deals in order to close them successfully. By creating a collaborative environment as opposed to an isolated environment, teams feel freer to communicate and voice any concerns they may have. One of the main differences between Agile workflow versus traditional Excel workflow is Agile supports real-time collaboration, not tedious batch work. This is where the usefulness and efficiency of Excel comes into play. During the diligence phase of M&A, deal teams will answer hundreds of requests from clients. Large volumes of data and materials are created, exchanged, reviewed and analyzed. The key to a successful M&A due diligence relies on the ability to identify the irrelevant noise from the critical data. Excel lumps everything into one, making it nearly impossible to decipher what's actually important and what is not, hindering the value of the deal. By adopting the collaborative and meaningful progress principles of Agile, teams are able to focus on high priority tasks rather than get bogged down by batch work, avoid the isolation that comes with working in silos, and ensure a deal is completed successfully based on validated assumptions and accurate information. Transparency is key throughout an M&A deal, so it should come as no surprise that this is an imperative principle of Agile. All too often assumptions are made, causing a gap in communication and creating roadblocks and challenges. To maximize the value of a deal, teams need to be transparent in progress and obstacles that need to be addressed, thus requiring a centralized form of communication for team members to follow. The nature of M&A is that it is unpredictable, so why is it that the workflow is grounded in playbooks that don't account for that? Teams need to be able to respond to change quickly and as smoothly as possible. With Agile, teams are encouraged to respond to change rather than follow a strict plan, allowing them to deliver information quickly and more accurately to clients. If implemented correctly, these tactics can improve the efficiency of M&A and modernize an industry that desperately needs it. Are there drawbacks to an Agile approach to M&A?The only real downside to Agile is the difficulty of getting people to embrace and adopt it. The M&A industry tends to have a mindset of "if it ain't broke don't fix it", and I couldn't disagree more. At its core, Agile is about being flexible, continuously improving, and fostering a culture of collaboration. It's the antithesis of the traditional M&A model, which is rigid in structure, stagnant, and isolating. Agile is ideal to implement in an environment where there are either continually changing priorities, or priorities are competing with one another. Again, initial implementation all comes down to receptiveness to change. Considering no two M&A deals are alike, the industry needs to adopt a project management style better suited for today's unpredictable and fluid global marketplace. Digital disruption is already a trend in so many industries, it's time for it to become a trend in an industry that is in desperate need of an upgrade - M&A. There are so many M&A deals that go wrong, it's time to critically examine the process and fix what's broken, starting with Excel. |
| 5 Steps To Speed Up A WordPress Website Posted: 11 Mar 2020 09:18 AM PDT 
Most commercial websites globally have two key objectives:
Site speed directly impacts both. It is a key rankings factor for search engines such as Google/Bing and it having a direct impact on conversion rate as shown by Amazon's own testing. I personally manage a digital agency of some of Australia's largest websites so wanted to prove how fast a website can be in a perfect scenario and the steps for this to be done. How do I measure site speed?Like most areas of marketing, it's important to measure performance and benchmark it to your competitors. Measuring for Google (SEO)To see how search engines grade a page for site speed I recommend using this free Google tool. Google created this tool based on lighthouse and you can do unlimited testing, so I would recommend comparing your web page score to competitors outranking you for a particular term as a benchmark. The other feature I like about this tool is that you can keep a history of past tests if you're logged in when you run them. Measuring for the user experienceGetting a score out of 100 is great but what about the actual time taken for a page to load. In my experience, there are two reliable tests that let you test by region: Again, I don't want you to focus on the actual score but what your score is compared to the websites that you're competing against. The aim is not to have the fastest website in the world but rather, to at least match if not beat your competitors. I'm using my personal website Compare Forex Brokers for the steps taken for our case study. As Compare Forex Brokers is built on WordPress, some steps may differ if you are using a different platform. These are in order of importance. 1. Website hostingThe most important factor that impacts site speed is your hosting provider. It's amazing how much money many of my clients have spent on coding to improve speed when in reality changing hosting providers would have achieved better outcomes. Choosing the right hosting provider is pretty simple:
I went for a Google Cloud provider who specialised in WordPress known as Kinsta. You can see their site speed benchmarking study showing the logic for why I chose them. Kinsta's own clients report a 45% speed increase when migrating across. Think about it, 45% improvement just by changing servers which for most people is pretty painless! This is why Website hosting should be your first consideration before anything else. 2. WordPress + PHP updatesJust like with Windows, WordPress (and plugins) regularly offer updates. Updates are regularly released tighten security and improve performance. Despite this, it's amazing how many websites are not accepting these updates periodically. In addition to updates of WordPress, there is another product commonly overlooked that needs updating, this is your PHP version. PHP provides the back-end to a WordPress website so should be updated every few months. This article also shows the performance improvements with each PHP version. If you choose a WordPress hosting provider, upgrading the PHP version can be a click of a button. 3. Image and video optimizationTo get the most out of image optimisation I recommend the plugin "shortPixel Image Optimizer." shortPixel makes it easy to reduce your image size which in turn will increase your website performance. To ensure you images keep their integrity (i.e. if it has text within the image) when compressed then you should save the image as a .png file (not a .jpeg file). A .png image won't compress as much but it will maintain high quality unlike a .jpeg which can degrade. Videos, much like images, are a great feature to keep your audience engaged however if not added to your website correctly can impact the user experience. Rather than upload videos directly into WordPress, I recommend uploading the video into YouTube, This will keep resources on your WordPress site free. Once you have done this, I recommend installing the Simple YouTube Responsive plugin. The Simple YouTube responsible plugin ensures your videos behave 'responsibly', which means your videos will scale to the size of the device your audience is using to view the videos. While most people pay attention to image and video optimisation (and it is certainly worth doing), it is important not to neglect the first two steps discussed as these have a bigger impact on website speed. 4. Using a content delivery network (CDN)Having fast hosting is great but it will be served out of a region (i.e. U.K.). If you want your site to be fast outside of these regions then using a CDN will allow your site to cache overseas and then load faster. CDN networks improve site speed by copying your static content on a network of servers around the world. When one of your users needs to access content such as images, CSS style sheets and on-demand videos, your content is drawn from the server closest to the user. There are three pricing levels when it comes to a CDN.
If your website does get serious traffic and relies on overseas users then it's worth considering a Cloudflare Business account. 5. Removing third party advertisingThird-party advertising such as DoubleClick, Adroll or even Facebook can really slow down a website. If these are a critical component of your marketing campaign then keep them but otherwise, you need to remove them ASAP. Googles own third-party advertising feature Google Analytics Remarketing slowed down compareforexbrokers.com by 0.8 seconds. A useful plugin to switch off Google Analytics Remarketing and manage third-party advertising sites I like to use is Perfmatters. How did fixing these five elements improve my website?Actioning these elements (and several more) led the most important forex broker page site speed to increase from 57/100 to 93/100 using Google Site Speed (Lighthouse). Looking at the 'site speed' index it went from 5.3 to 2.4 alone. Other metrics that showed improvement include First Conceptual Paint which measures how much time before the site shows the first element of the site (thanks to better loading) and Max Potential First Input Delay which measures the time taken from when user first interacts with the site to being able to respond thanks to moving to Kinsta. According to Pingdom the site in Sydney now loads in 0.422 seconds (it was over 2 seconds prior). Once you have compared your site speed against your competitors, you can gain an edge by implementing these 5 actionable steps I have provide which will make an immediate and lasting impact on site speed. These steps are
The key takeaway I want you to get from this guide is to consider changing hosting provider and upgrading your WordPress/PHP version first before any other site speed action. These are the easiest steps you can take and will have the biggest impact to improve your sites speed.
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| Do Small Businesses Pay Taxes? Posted: 11 Mar 2020 09:00 AM PDT 
Preparing your business tax return is, admittedly, a complicated, frustrating process. However, it's important to do it right – you can face steep penalties by filing an inaccurate return. The starting point for preparing your business tax return hinges on the structure of your business. Whether you're a sole proprietorship (like most small businesses), a partnership, or a C or S corporation, your business entity will define which form you must use to file your business return and how much you may owe the IRS. Do you have to pay taxes on a small business?In short, yes, you may be responsible for paying taxes like income tax, self-employment tax, employee payroll tax and local property tax. However, the amount you owe depends on factors such as your business type, whether you made a profit and applicable deductions. Steven J. Weil, president of RMS Accounting, said the definition of a "business" is an activity engaged in with the intent of making a profit. "If you don't intend to make a profit, then you have a hobby, not a business," Weil told business.com. "If you make a profit, that profit is subject to federal income tax and may also be subject to state income tax depending on the state you are doing business in. In fact, some states like California tax businesses even when they don't make a profit. How your business is taxed depends on how it is set up." How are small businesses taxed?When you set up your business, you chose a specific legal structure for your company: sole proprietorship, partnership, S corporation or C corporation. There are stipulations and requirements within each legal structure, as well as certain tax advantages. If you need additional time to file your business tax returns, you can receive an extension by filing Form 7004, or Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns. This extends the due date for filing your tax return, but you still must pay any estimated tax owed on or before the tax return deadline for your company. (For most businesses, this deadline is March 15.) Sole proprietorshipUnless your single-member LLC elects to be treated as a corporation, the IRS considers it a "disregarded entity," which means you do not have to file business taxes as a separate entity. Instead, you'll report the profits or losses on your own personal income tax return, and you will be taxed based on the specific federal and state income tax bracket you fall in. You will also be subject to self-employment tax (Medicare and Social Security). [Read related article: Tax Filing Tips for Independent Contractors] PartnershipTaxation on multimember LLCs, or partnerships, is like that of sole proprietorships. Instead of filing a business tax return, each partner reports their share (according to their percentage of ownership in the business) of the business's profits or losses on their personal income tax return. S corporationWith an S corporation, income is passed through the entity to the business's owners (or shareholders) who then pay taxes based on their percentage of ownership at their tax bracket rates. If, though, you're a shareholder and an employee, you're expected to pay yourself a "reasonable salary." In other words, the salary that a shareholder-employee draws should take into account the duties performed for the business, his or her experience, comparable pay in the industry and the size of the company. C corporationC corporations are subject to what is commonly known as "double taxation." If you elected C-corp status, your business will be taxed at the 21% corporate tax rate. Additionally, shareholders are taxed on funds they take out of the business (e.g., salary and/or dividends). Since a business's legal structure greatly impacts what its owners owe, it is recommended that you speak with a CPA or tax advisor to determine the best option for your business. "Having the right tax professional who understands not only the tax laws but also how your business operates can help make sure you pay the lowest tax possible without overlooking any tax or other reporting requirements," said Weil. "One also needs to understand other taxes, both state and federal, to which their business may be subject. These other taxes include sales tax, use tax, franchise tax and excise tax, to name just a few. Not knowing about a tax does not remove the responsibility of the business to pay it." What is the small business tax rate?The rate at which your small business is taxed by the IRS depends on the type of business entity you set up. Businesses filing as a C-corp are taxed 21% on their net taxable income. Sole proprietorships, partnerships and S-corps are considered pass-through entities; the owners or shareholders report business income on their personal tax returns and pay according to the specific income tax rate they fall into. Bret Scholl, CPA, CGMA, of Scholl & Company, LLP, said these tax rates can range from 10% to 37% for federal taxes in 2020. "If you are an unincorporated business owner, you will have to also include the self-employment tax," said Scholl. "For 2020, the self-employment tax rate is 15.3% on the first $137,700 worth of net income, plus 2.9% on net income over $137,700. This is the Social Security and Medicare contribution for the unincorporated business owner." How much income can a small business generate without having to pay taxes?Businesses do not have to pay federal income taxes if expenses exceed gross income – in other words, if the business generated a loss instead of a profit. However, you may still be required to file a tax return and pay other taxes, like payroll taxes for employees and local property taxes. "If you have any small business income, you must file a tax return even if you don't owe any taxes," said Scholl. "A common point of confusion for this question is that self-employment taxes are only owed if the net income from a small business is more than $400. I often hear and read that if you don't make more than $400, you don't need to pay taxes, which is not accurate." How can small businesses maximize tax deductions?Although you may not have too much control over the rate at which your business is taxed, you can save money by claiming relevant tax deductions. In 2018, the Tax Cuts and Jobs Act (TCJA) went into effect, granting pass-through entities (sole proprietorships, partnerships and S-corps) the ability to deduct 20% of their qualified business income. Scholl identified a few other ways the TCJA tax reform can help small business owners save money. "With 100% bonus depreciation and increased Section 179 expensing in 2019, you can make significant purchases of equipment, machinery and furniture, and write off 100% of the value," said Scholl. "More businesses can use the cash basis method of accounting; the old limit was gross receipts up to $5 million and now up to $25 million average annual gross receipts." To qualify as a deduction, a business expense must be both ordinary and necessary. The IRS states that an ordinary expense is one that is common and accepted in the trade or business, and a necessary expense is one that is helpful and appropriate for your trade or business. There are several deductions that many business owners overlook. Scholl listed the following deductions as possible tax breaks that business owners may be able to take advantage of:
For all of the above deductions, there are rules and exceptions. Talk to a financial advisor; they can help you determine what you qualify for. To save the most money on business taxes, business owners should understand the tax implications of their business's legal structure, maintain accurate records of expenses and deductions, and partner with a tax expert who understands their business and industry. |
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