There are still ways to earn income that is free from federal income tax. With the various tax increases that have taken effect in recent years, tax-free income opportunities are more valuable than ever.
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The following table provides some important federal tax information for 2015, as compared with 2014. Some of the dollar amounts changed due to inflation. Other amounts changed due to legislation.
The Michigan Department of Treasury has a new online system called the Michigan Treasury Online (MTO). This new system allows taxpayers 24/7 access to their accounts and will start to process sales, use, and withholding (SUW) tax returns for 2015. Taxpayers can make changes to their account, electronically file SUW returns, and make electronic payments for taxes due.
If you're self-employed as a sole proprietor, partner, or LLC member, you may owe the self-employment tax.
There's no doubt about it ... college is expensive. At top-rated private universities, the annual cost can be $55,000 and up. Some public schools charge out-of-state students $40,000 and up. With any luck, however, your child or grandchild will qualify for financial aid. These days, a surprisingly high percentage of students do.
The Tax Increase Prevention Act of 2014 (TIPA) renewed through 2014 a long list of business federal income tax breaks that had been allowed to expire at the end of 2013. This article provides a quick summary of the most important business extenders that were just resurrected -- and a few that were not.
The Tax Increase Prevention Act of 2014, which was signed into law on December 19, renewed through 2014 a long list of personal and business federal income tax breaks that had been allowed to expire at the end of 2013. Because Congress habitually allows these breaks to expire before restoring them for a year or two, they have become known as "the extenders."
The Affordable Care Act (ACA) established a number of so-called "market reform" restrictions on employer-provided group health plans, starting with plan years beginning in 2014. These restrictions generally apply to all employer-provided group health plans -- including those furnished by small employers with less than 50 workers. Even worse, there's a punitive penalty for running afoul of the market reform restrictions. The penalty, under Internal Revenue Code Section 4980D(b)(1), equals $100 per-day per-employee, which can amount to up to $36,500 per-employee over the course of a full year. Yikes!
The IRS has issued the 2015 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
1. Improve cash flow. If your business is seasonal, ask your biggest vendors to let you stock up now but pay when customers buy. Also, check into renegotiating your leases to pay only those nine or 10 months out of the year when you experience the greatest number of sales.
2. Investigate new products. For the next few weeks, have your customer service personnel keep a list of products that customers would have bought from your company if you stocked them. Then, calculate how much revenue you would have earned by stocking the three most requested items.
3. Reduce waste. Ask your production foreman to estimate how much you spent in the last six months on lost production, manufacturing errors, injuries and re-works. Then, calculate how much extra you would have made by paying your crew a small percentage of the materials waste reduction and hourly pay required to fix mistakes.
4. Do some spring cleaning. Ask your plant foreman to give you a list of equipment that's idle most of the time. Calculate how much you would save in insurance, carrying charges, property taxes, income taxes, maintenance and storage space by getting rid of it.
5. Solicit money-making ideas. Ask everyone who performs day-to-day work in your business - such as delivery people, administrative assistants, customer service personnel, janitors, production employees -- to write down five ways your company can become more profitable. You may be surprised by the great ideas you receive
6. Renew old acquaintances. Send letters or e-mail messages to customers who discontinued doing business with your company. Thank them for their past patronage and ask them to come back. See how many call to reinstate their accounts.
7. Reassess priorities. Ask your billing department to rank your customers by the dollars they spend. Then figure out how much more money you'd make by transferring your time and money from servicing the lowest-producing 80 percent to "wowing" the top 20 percent.
8. Evaluate billing practices. If you currently bill customers a fixed amount every month, calculate how much you'd save in monthly mailing costs and increased cash flow by billing in advance every two months instead.
9. Stop expenses from falling through the cracks. Figure out how much you spent last year for products and services that were shipped to customers but not authorized by them. Set up a system to get customers' approval in advance and avoid this wasted expense. Then check and see how much you spent last year in overnight priority packages and shipping. Calculate how much you could have saved if just 75 percent of those packages weren't sent so they'd get to the recipients the following day.
10. Cut back on overtime. Ask your payroll manager to give you a list of employees who were paid overtime last year. Initiate a bonus to departments who get their work done on time without incurring any expensive overtime.
Think of what you can do with the savings from just these 10 ideas. It will motivate you to do even more to enhance your company's bottom line.