Dear Business Owner: To limit the amount that you have to pay in taxes in April. You should be thinking about DEDUCTIONS NOW!

The purpose of this letter is to reveal how you can get the IRS to owe you money.

Of course, the IRS will not likely cut you a check for this money (although in the right circumstances, that will happen), but you’ll realize the cash when you pay less in taxes.

Here are six powerful business tax deduction strategies you can easily understand and implement before the end of 2023.

1. Prepay Expenses Using the IRS Safe Harbor

You just have to thank the IRS for its tax-deduction safe harbors.

IRS regulations contain a safe-harbor rule that allows cash-basis taxpayers to prepay and deduct qualifying expenses up to 12 months in advance without challenge, adjustment, or change by the IRS.

Under this safe harbor, your 2023 prepayments cannot go into 2024. This makes sense, because you can prepay only 12 months of qualifying expenses under the safe-harbor rule.

For a cash-basis taxpayer, qualifying expenses include lease payments on business vehicles, rent payments on offices and machinery, and business and malpractice insurance premiums.

Example. You pay $3,000 a month in rent and would like a $36,000 deduction this year. So on Friday, December 29, 2023, you mail a rent check for $36,000 to cover all of your 2024 rent. Your landlord does not receive the payment in the mail until Tuesday, January 2, 2024. Here are the results:

• You deduct $36,000 this year (2023—the year you paid the money).
• The landlord reports $36,000 as rental income in 2024 (the year he received the money).

You get what you want—the deduction this year.

The landlord gets what he wants—next year’s entire rent in advance, eliminating any collection problems while keeping the rent taxable in the year he expects it to be taxable.

2. Stop Billing Customers, Clients, and Patients

Here is one rock-solid, straightforward strategy to reduce your taxable income for this year: stop billing your customers, clients, and patients until after December 31, 2023. (We assume here that you or your corporation is on a cash basis and operates on the calendar year.)

Customers, clients, and insurance companies generally don’t pay until billed. Not billing customers and clients is a time-tested tax-planning strategy that business owners have used successfully for years.

Example. Jake, a dentist, usually bills his patients and the insurance companies at the end of each week. This year, however, he sends no bills in December. Instead, he gathers up those bills and mails them the first week of January. Presto! He postponed paying taxes on his December 2023 income by moving that income to 2024.

3. Buy Office Equipment

Increased limits on Section 179 expensing now enable 100 percent write-offs on most equipment and machinery, whereas bonus depreciation enables 80 percent write-offs. Either way, when you buy your equipment or machinery and place it in service before December 31, you can get a big write-off this year.

Qualifying Section 179 and bonus depreciation purchases include new and used personal property such as machinery, equipment, computers, desks, chairs, and other furniture (and certain qualifying vehicles).

4. Use Your Credit Cards

If you are a single-member LLC or sole proprietor filing Schedule C for your business, the day you charge a purchase to your business or personal credit card is the day you deduct the expense. Therefore, as a Schedule C taxpayer, you should consider using your credit card for last-minute purchases of office supplies and other business necessities.

If you operate your business as a corporation, and if the corporation has a credit card in the corporate name, the same rule applies: the date of charge is the date of deduction for the corporation.

But suppose you operate your business as a corporation and are the personal owner of the credit card. In that case, the corporation must reimburse you if you want the corporation to realize the tax deduction, which happens on the reimbursement date. Thus, submit your expense report and have your corporation make its reimbursements to you before midnight on December 31.

5. Don’t Assume You Are Taking Too Many Deductions

If your business deductions exceed your business income, you have a tax loss for the year. With a few modifications to the loss, tax law calls this a “net operating loss,” or NOL.

If you are just starting your business, you could very possibly have an NOL. You could have a loss year even with an ongoing, successful business.

You used to be able to carry back your NOL two years and get immediate tax refunds from prior years, but the Tax Cuts and Jobs Act (TCJA) eliminated this provision. Now, you can only carry your NOL forward, and it can only offset up to 80 percent of your taxable income in any one future year.

What does this all mean? Never stop documenting your deductions, and always claim all your rightful deductions. We have spoken with far too many business owners, especially new owners, who don’t claim all their deductions when those deductions would produce a tax loss.

6. Deal with Your Qualified Improvement Property (QIP)

QIP is any improvement made by you to the interior portion of a building you own that is non-residential real property (think office buildings, retail stores, and shopping centers)—if you place the improvement in service after the date the building was placed in service.

The big deal with QIP is that it’s not considered real property that you depreciate over 39 years. QIP is 15-year property, eligible for

• immediate deduction using Section 179 expensing, and
• 80 percent bonus and MACRS depreciation.

To get the QIP deduction in 2023, you need to place the QIP in service on or before December 31, 2023.

I trust that you found the six ideas above worthwhile. If you want to discuss any of them, please call me on my direct line (410-457-7331).

Sincerely, James Darle Jones Sr
www.ATB.TAX

Employee Retention Credit 2020/2021  August 2021

It’s hard to imagine that a small business does not qualify for some or all of the employee retention credit (ERC).

And remember, this is a tax credit—one of the very best things that tax law has to offer. True, it’s not as valuable as some other tax credits, because you have to reduce your payroll income tax deductions for the credits, but the ERC certainly puts you ahead.

And you can be looking at big bucks. The possible ERC is $5,000 per employee for 2020 and $28,000 per employee for 2021. That’s $33,000 per employee.

For 2020, you have two ways to qualify:

1. You had a gross receipts drop during a 2020 calendar quarter of more than 50 percent when compared to the same calendar quarter of 2019. The more than 50 percent test is the trigger for the ERC, and you automatically qualify for that quarter and the following 2020 quarter.
2. You suffered from a federal, state, or local government order that fully or partially suspended your operations (under this rule, you qualify for the ERC on the days you suffered the full or partial suspension, even if you did not lose any money).

For 2021, you have three ways to qualify:

1. You suffered a federal, state, or local government order that fully or partially suspended your operations (under this rule, you qualify for the ERC on the days you suffered the full or partial suspension, even if you did not lose any money).
2. Your gross receipts for a 2021 calendar quarter are less than 80 percent of gross receipts from the same quarter in calendar year 2019.
3. As an alternative to number 2 above, using the preceding quarter to your 2021 calendar quarter, your gross receipts are less than the comparable quarter in 2019.

You can see by the rules that the government wants to help your small business. Take advantage.

One final note. You may not double-dip. Wages you use for the ERC may not be used for the Paycheck Protection Program (PPP), family leave credit, or similar COVID-19 programs.

The gross Tax Gap is the difference between the amount of tax owed by taxpayers for a given year and the amount that is actually paid timely for that same year. It represents, in dollar terms, an estimate of the annual amount of noncompliance with our tax laws. Many commentators have pointed to the Tax Gap as a roadmap for funding additional national priorities, cut taxes, or limit the need for tax increases. They reason that the government should prioritize full payment of taxes already legally owed before it looks to impose additional tax obligations on the general public. It is an important topic.

Reducing the Tax Gap and improving compliance is a central part of the IRS mission, which is to: “Provide America’s taxpayers top quality service by helping them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all.” Our mission statement reflects our values: we put “service” first making it easier for Americans to understand and satisfy their tax obligations as the most important thing the IRS can do to affect the Tax Gap.

The IRS will also, however, enforce the tax laws against those who choose not to voluntarily fulfill their responsibilities. Indeed, our enforcement efforts serve taxpayers generally, the vast majority of whom want to comply with their tax obligations, by legitimizing that choice and giving them comfort that we support them and will aggressively enforce the laws against those who do not pay their fair share. In this regard, our enforcement efforts support compliant taxpayers and a fair and equitable tax system.                                                   We specialize in helping you pay as you go to help you avoid penalties and the prospects of owing long term ta-debt! Call James with your questions @ 410-457-7331

Businesses need an inexpensive way to advertise and market their products and services. We help you market your business, sell your products online or simply collect payments online. If you don’t need to accept online payments, we make it easy for you to earn CASH 💰through our reseller program. Call James at 410-457-7331 and learn how you can add websites with payments and earn revenue for yourself or your company!

To get started building your free website, we need:

• Your company name and contact information
• Description of your store and the products you sell
• Website address ideas (for the domain name)
• 3 photos for the home page
• Initial list of products/services to add to your online store
• Pricing and photos for your products/services
• Keyword and phrases to use with SEO marketing
• Banking information to enable direct deposit payments
• Order fulfillment information (shipping, taxes, returns)

We will support you and train you to manage your store! If you prefer to hire us as your digital store manager, we can do that too!

After the initial configuration, additions to your product catalog can be uploaded in bulk with a CSV file.

Refer someone who needs a website, and and after they accept $500 in payments we will pay you $100!!!

💰

 

Believe it or not I ran into a business the other day that had decided not to accept credit cards for payment. It was a new tattoo shop in Frederick Maryland. How could it be, in this day and age, that a business would actually consider not accepting payments in an electronic form when it makes it so easy for their customers to pay? After doing some digging it seems there are several tattoo shops in Frederick that don’t accept credit cards. These businesses are mostly comprised of a younger generation who thinks they don’t need to conform to run their business and I get it but……I don’t get it. Let me tell you why they’re missing the boat. As a retail or service business, you need to make it as easy as possible for people to buy your product or service and in this case it’s both! Say a new client comes in and looks at some designs and says ok I’ll take it. Instantly you’re creating a barrier to your sale when either have a sign that says cash only or you have to say we only accept cash or worse yet you create the tattoo and when they go to pay with plastic you say “sorry cash only.” First if you have the sign it’s also a red flag that says there is an extra step to buy from me. Second if you say cash only before they buy it makes the customer decide again whether they wish to do business with you. Sure, times are good but no-one with any sense would make a potential customer think twice about their purchase. If you were to spring it on them after the tattoo was completed what are you going to do follow them to the bank? Anyone who says they always get it anyway is lying to themselves and I’m not LOL. What about those tattoos that cost $4-5-$600.00 or more? I’m sorry but not many people have that kind of cash to drop on a tattoo, but they might have that much in credit. Ahhhh…Do you see all of the problems you are solving when you accept credit and debit cards for that matter? By accepting credit cards, you have a built-in financing program with no risk as long as you dip the card into the reader and get a signature for the cards that do require one now. By accepting credit cards you’re also giving your clients a level of security. Think about it, it’s a risk for you just to go to an ATM and withdraw money. Years ago, when I was living in Baltimore I was robbed at an ATM, the guy got $300 and wanted more before I ran off and yes, he had a gun Clint Eastwood would be proud to holster. I had an insurance agent complain once because I paid a large some of cash for my car insurance and she didn’t like making cash deposits at the bank. If your potential customer must get a cash advance from a credit card it’s another fee or should I say obstacle for them to buy from you. Let’s say you wanted to get a cash advance from your credit card, but you don’t know the pin #? You’re not waiting a week or more to get the pin # in the mail. You’re going to a tattoo shop that accepts credit cards. It’s that simple By accepting credit cards, you are making it easy for your customer to pay and in the back of their head they will always know it’s easy to buy from you. You get a built-in financing program and you don’t have to make as many cash deposits at the bank either. Most of your would-be clients might be able to get the cash but it’s a hassle and no-one likes a hassle especially when your customers are buying something like a tattoo that is supposed to make them happy. In the long run not accepting credit and debit card will cost your business customers and it will cost you money. If you’re worried about the fee, then increase your pricing 4% to 5% but whatever you do don’t make them pay a surcharge for many of the same reasons! For more information about the solutions we offer to help your business accept electronic payments in your store, in the field or online Call James @ 301 829 3331 or complete our contact page https://atb.tax/contact/ and we will be in touch. Good luck with your business and keep in mind “The Key to Profitability is making it Easy for Your Customers to pay!” We make it Affordable!

Over the past few weeks, we’ve been working on updates to our atb.tax website. We are expanding our service offerings to include website design and all the bells and whistles that go along with a website: domain name registration, web hosting, security, mobile compatibility, maintenance and upgrades. We started with our own site to give an example of what is possible. Check out our site, and let us know what you think.

If you need money to help keep your business afloat we can help!

We just applied for the Maryland Small Business COVID-19 Emergency Relief Loan Fund It’s not super hard you just need your last two years Profit & Loss Reports and why you need the loan and a little personal info! This fund can provide you and your business up to $10,000 in grants to help you survive the crisis. We also applied for the Maryland Small Business COVID-19 Emergency Relief Grant Fund This fund can offer you a loan of up to $50,000 for operating expenses. I have heard that if you use it to pay employees that you may not have to pay it back. We are helping business owners like you apply for aid for a nominal fee. Call James @ 410-457-7331 for more information!

One of the things we offer is touch-screen Point of Sale Systems for Restaurants. Recently I had a potential client I’ve been working with say to me.

James                                 “So I am leaning towards full self-service kiosk. I Think it would help my Business a lot. I don’t think that I should partner up with anything unless I have what I really need?”

Rehan,                                  Besides the food your biggest asset is the charm of your restaurant. You should always be trying to connect with your customers. Asking your customers to pay at a kiosk is not very charming and it’s definitely not very personable. You should always be bending over backwards to give your clients the best experience possible at your restaurant. When they leave your restaurant they should be saying: Wow we were seated quickly, they took our order quickly, the food arrived in a short time, the food was great, and they made it easy to pay and tip. One of the biggest problems with a kiosk is that 1 out of 5 people will need help. Suddenly it’s doing the opposite of what you wanted which was to save time. It needs to be easy in, easy to order, easy to pay, and easy out! Your restaurant is too small for a kiosk. The food and your charm is what makes your place great. A kiosk can’t smile and ask how the meal was and it’s not very charming! Anytime you get interact with your customers the better! let me know when you’re ready to revolutionize your business. Harbortouch Elite POS can do it! All the best! James

One of the companies I work with for credit card processing is an Allentown Pennsylvania company called Harbortouch. Harbortouch has been in business for more than 20 years and I have worked with them for more than 10. The key reason for going with any merchant services provider today is technology and support. The best technology in the world is useless unless they answer the phone when you have a question and Harbortouch does it well! They also have a wide variety of technology to help your business.

To assist their agents in their sales efforts they offer a once a year conference called Accelerate. They had the last few in Las Vegas but this year they held it in Fort Lauderdale at the W Fort Lauderdale resort. The W is an incredibly beautiful property right on the beach. They even got us a discount for the room at $225 a night and we upgraded to Ocean Front for just a little bit more. We flew in Tuesday on Southwest and it took us about 2 ½ hours to get there from BWI. We grabbed a Lyft to get to the hotel and in no time at all this was our view!

During the summer when you are at the beach you have to get up so early to try to take in a sunrise but in October you have no such trouble. I got this pic around 7:15 am unreal!

They had an opening reception around 7pm in the courtyard of the hotel and it was all you can eat and drink for $FREE. They had a band too. So we chowed down and rocked out! The coolest thing about these shows really is that you get a chance to see people in the business you mostly only see once a year and some you get to hang out with and discuss your challenges. Some you just slap them on the back, grab a handshake, smile and say hey!
Bright and early the next day we got to sit with some of our partners and share a great breakfast. Next, we had some opening comments from our fearless leader Jared Isaacman. He noted some of the Harbortouch’s top agents while also mentioning some of the company’s achievements over the past year.

The next speakers basically talked about future products, products in development and new products that are client ready! The client ready product is Sky Tab.

Sky tab is a mobile point of sale terminal and printer in one that allows servers to take orders from the customer tableside thus speeding the order through our Hospitality POS Harbortouch Elite then directly to the kitchen for prep. Now servers can take orders tableside without the need to write down and then enter the order into the POS System. But wait there’s more. SkyTab can also help with the check. Usually the server has to present the check to the table and then wait for a credit card, go back to the table, collect the check and the credit card and swipe or dip the card at the POS. Then return to the table with the receipt and ultimately wait for the customer to enter a tip and sign the receipt. Now with SkyTab not only can servers take orders at the table but they can leave the SkyTab terminal at the table so the customer can pay their bill, leave a tip, and offer a compliment or concern. They can even leave their email for future offers from the merchant. This has been tried a few times by others in the past but SkyTab truly masters it! This is a game changer for Harbortouch, it’s sales reps in the field and for restauranteurs looking for every advantage in their business!
After lunch we had four breakout trainings to choose from. I chose Selling POS to restaurants. This course offered a foundation and some fresh ideas for selling Touch-screen Point of Sale Systems to restaurants. The second class I attended was how restaurateurs can utilize Doordash to add delivery as an added service for their customers. Currently if your restaurant would like to delivery through Doordash they have to buy or rent a tablet rom Doordash to assist in facilitating each order but once again Harbortouch has added a feature no one else has. When you have a Harbortouch Elite POS then when someone places an order through Doordash for your restaurant’s food, the the order instantly populates in the POS while simultaneously printing in the kitchen for preparation. Once again Harbortouch offers more ways to help your restaurant make more money!

To top it all off our keynote for the day was Ed Viesturs. In an effort to help us reach new heights Ed shared with us how he reached the summit of 14 of the world’s highest peaks without supplementary oxygen! His story was amazing, harrowing, and tragic as he ultimately watched his friends perish by continuing to climb while Ed and company decided to turn around. It was a great speech and I along with many grabbed a copy of his book along with a photo and autograph. Truly Amazing!
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They always hold the company party after the first full day, so we had dinner after a 5-minute walk at the Wild Thyme Oceanside Eatery. It was super nice, we had the run of the place, and the conversations were more about the goodness and the good times of this business! We definitely shared a few smiles, a few laughs, and a goodtime was had by all!
On Thursday morning we started by learning more about the Advantage Program. The Advantage Program allows agents to help merchants surcharge customers who feel they need add a fee to cover their credit card acceptance fees. Personally I think it’s a mistake to surcharge customers because they will always have a bug in their ear telling them it cost extra to do business with this merchant. Merchants should instead pad their prices 1 to 3% and your customers will never know the difference but if you feel you need to surcharge your customers for your credit card acceptance we can help!
Next, we learned how to offer business loans to our customers and an overview of Lighthouse. Harbortouch’s online business management system! More to come on that.
We had another great lunch sponsored by American Express and two more classes in the afternoon. Security is now top of mind to many business owners today and Harbortouch is a leading the industry. Whether it’s using a stand-alone credit card terminal like the VX 520 or the Harbortouch Elite POS Harbortouch tokenizes every credit card number swiped or dipped into the system. Then offers Point-to-Point Encryption that keeps the info secure. The PCI-validated P2PE solution prevents cardholder data from entering your payment environment, protecting your customers and your business from the harmful and costly effects of a data breach. Businesses large and small have suffered from the devastating effects of a hack. Today with Harbortouch your transactions can be worry free!
My last class of the trip was focused on Lighthouse. Lighthouse is a great way to get details from your business. From sales and tax information to payroll information about your employees. If you find your needed to make a change to your menu or simply wanting a look at your sales while your out of town then Lighthouse is for you! But wait there’s more. Have you ever wished you had help managing your reputation online, making social media post or email marketing? Well if your accepting credit cards through Harbortouch it’s all a part of a broader plan to assist in your success. Marketing to help get the people in your store or restaurant, a management system for your business, a way to get paid and security in those payments! Harbortouch has it all.
To end the day and the conference Harbortouch gave away 2 cars a BMW and a Lexus. I had 30 entries or so based on deals I have written in the past year, but I wasn’t picked. The first guy who won was all smiles, but the second guy who won was truly tickled, and he let out a few screams. It was Too Cool!
It was impossible to say goodbye to everyone but I a managed to catch a few. That night my fiancé Julie and I ate dinner at the 15th Street Fisheries. We read online that not only did they have the best seafood in town, but you could actually feed the fish dockside! So after looking at the menu and traveling 1200 miles to eat there I ordered the King Crab LOLL, but I can say it was the best ever! Then we did get some bread to feed this fish. It was too Cool!
We hit the beach the next day and the water was so warm compared to Maryland. While I was relaxing, I was able to get some planning in. It’s so tuff to plan for your business while your running your business! Last but not least we hit the Hard Rock Casino for some cards. I have a small fetish for poker, so I sat for about 2 and ½ hours and I dropped $49 but it was fun, and I did hang!
It was a great conference and I definitely learned a few things. I hope you have too!
If you need to accept credit cards for payment or better yet you need to modernize operations at your restaurant Harbortouch has the means. When your ready I can answer your questions and help you get started!

James Darle Jones Sr President, Author, Tax, & Payments Specialist NetPay2K International Corp Answer Tax & Business Services Harbortouch of Maryland http://www.harbortouchposmd.com 301-829-3331

So I want to start a business? What type of business formation should I choose? Should I be a sole proprietor, a partnership, an S corporation, or a C corporation? I’ll just set up an LLC that’s what everyone is doing now right? LOL NOOOOOOO!!!
An LLC Is a limited liability company. Basically what this means is that if someone sues you for something that you did within the business then all they can get is the total amount of money you have put into the company. They cannot go after you personally.
Did you know that when it comes to tax time there is no tax form for an LLC? Once you’ve chosen to be an LLC you have to choose how you will act. LLC owners must run their business as a sole proprietor, a partnership, or an S or C Corp. Also if you own an LLC in the state of Maryland you must file an annual report and when you file it there is a $300 fee!
When you file your annual return, they will ask you if you’re using any personal property to run your business. If you live in Frederick County, it doesn’t matter but if you live in Carroll County Maryland the county will turn around and hit you with a property tax bill. It’s not much but it adds up especially after you get my bill. LOLL
Sole proprietors are the most common and the easiest. You operate our company and at tax time you file a Schedule C with your 1040 and you will pay self-employment taxes and income taxes. If you are profitable you need to consider paying estimated taxes to the Fed and your state so you do not end up with a big tax bill come tax time.
Partnerships are great for multiple owner companies. Taxes are paid per your percentage of ownership and the profit but via a special allocation any of owners pay can be increased. Paying estimated taxes to the state and the Fed and encouraged to stay ahead of a back tax bill.
If you’re an S Corp, you will need to take a salary. The benefit of being an S Corp is that once you take a decent salary which is an expense to the business, the profit left over is taxed as a capital gain and you would not have to pay payroll taxes like social security on the profit. If you do not take a salary, then all your profit is taxed as a Sole Proprietor and this can add up. S Corps are great for single owner businesses with revenue of $50,000 and over.
C Corporations have mostly been reserved for public companies in the past but the Tax and Jobs act of 2018 offers the biggest tax break of any type of business. While all other business can receive a 20% discount on gross profit C corps can get up to 40% and this can really help you at tax time. Be careful how you select your formation and if you need help I have my calculator ready call James @ (410) 457-7331 for $FREE HELP!

James Darle Jones Sr
President, Author, Tax & Payments Specialist NetPay2K International Corp Answer Tax & Business