Archives for February 2020

Running a small business means wearing multiple hats — from salesperson to HR manager to collection agent. But should you add tax expert to your growing list of duties?

You may think preparing tax returns for your small business is no big deal. After all, there’s no shortage of tax software options and apps on the market that can help simplify the do-it-yourself route. But before you fill out the endless forms and scan a mountain of receipts, consider these three compelling reasons to leave your taxes to the professionals:

1. It’s too easy to make a mistake. Even a small business tax return can span dozens of pages. And with so many figures and numbers, there are literally thousands of opportunities for an error to occur. Inadvertent blunders could mean hefty overpayments. Or worse, they could trigger an audit and tie your up business for months.
2. If there’s an audit, you’re left to fend for yourself. The IRS is increasingly setting its sights on the small business community, and that means you have a target on your back. As an individual taxpayer, your chances of being audited are less than 1%. But as business owner who’s filing a Schedule C, the odds are far higher. Would you know how to proceed without the knowledge of a trusted tax professional?
3. The tax laws are always changing. Even if you’re an expert on the current tax code, that expertise will not last long. Every new year brings a slew of changes, and many directly impact small businesses. If you rely on your own knowledge, you could miss a vital update that could save your firm money or get hit with a penalty that you didn’t know existed.

Putting a price tag on peace of mind
 Having your taxes professionally prepared can be one of the best investments you make this year. If you don’t already have a trusted tax professional on your team, give Magone & Company a call at (973) 301-2300.

Whether you’re launching a business or expanding an existing one, location plays a critical role in the formula for success. Choosing where to open your doors can make or break your entire business plan — especially for smaller startups.

To give you a head start on identifying possible locations for your next venture, WalletHub recently published a study that ranks all U.S. states on the optimal conditions for new businesses. They compared all states across three elements: the overall business environment, access to resources and business costs.

How the states stack up
Texas claims the number one overall spot, also ranking number one in business environment, which includes the average length of the work week, five-year business survival rate and the number of startups per capita. While the Lone Star State earned a lackluster rating for costs from WalletHub, the Tax Foundation’s 2019 State Business Tax Climate Index reminded entrepreneurs that Texas doesn’t have an individual income tax or corporate income tax, lending to the state’s appeal for a startup.

Spending is a necessary part of building a business, but lower operating costs can of course help increase your profit margins and boost your bottom line. With costs in mind, Oklahoma and Mississippi were found to be the most affordable states for doing business, taking the number one and number two spots based on:

• Office space affordability
• Labor costs
• Insurance premiums
• Cost of living

Looking to stay in the New York tri-state area? New Jersey is 49th on the overall WalletHub list, ranking 50^th in business costs and 44^th in business environment. In terms of cost, New York clinches the 49^th spot, but ranks 42^nd overall. And thanks to New York City, it’s no surprise that the Empire State comes in at an impressive number six for access to business resources. Connecticut rounds out the tri-state, ranking 48^th in business costs and 48^th in overall business environment.

Choose wisely based on what matters to you
One survey isn’t going to dictate your business’s optimal location. Be sure to consider other factors that can play a pivotable role. Are competitors in the area? Is the location consistent with your brand’s style and image? Do the demographics match your ideal customer profile?

According to the Bureau of Labor Statistics’ Business Employment Dynamics, just 50% of businesses with employees make it to their fifth year in business. To increase your survival odds, do your research and pick a location that will work for your current and future needs.