Small Office-Home Office Tips #2



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TipWorld - http://www.tipworld.com
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Proudly presents:
The Windows 98 Tip of the Day

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*1.   BAD DEBTS 

If a customer fails to pay for goods purchased from your 
business, you can deduct the cost of the goods that you sold but 
weren't paid for. However, you cannot claim a deduction if 
someone stiffs you on a bill for services. More information on 
these rules is available through the Internal Revenue Service's 
Web site at 

http://www.irs.gov/prod/forms_pubs/pubs/p5351402.htm 


*2.   BUSINESS FINANCING SITE 

America's Business Funding Directory, at 

http://www.businessfinance.com 

helps you search for a lender who will help finance your small 
business. You can also get background information on how to 
finance a business. One section helps you determine what type of 
financing is best in your situation. You can also download a 
funding workbook designed to help you improve your chances of 
finding financing. 


*3.   JACK OF ALL TRADES? 

Or master of none? The truth is probably somewhere in between 
for multifunction devices (MFDs), those machines that promise 
to fax, scan, and copy your business documents. When you're 
shopping for MFDs, you'll have to consider what tradeoffs 
you're willing to make. For example, a flatbed model--such as 
Hewlett-Packard's 1170c--can make photocopies of almost 
anything--even books. But that HP will cost about $800, compared
to as little as $300 for nonflatbed models. Without the flatbed 
feature, though, you'll be limited to copying and scanning only 
loose, single-pages at a time. To learn more about the features 
of various MFDs, see WebShopper's article at 

http://www.pcworld.com/r/tw/1%2C2061%2Ctw-soho0128%2C00.html 


*4.   MIND YOUR Ls AND Us 

When you're arranging the furniture in your home office, keep 
two letters in mind: L and U. Arranging the stuff you use most 
in an L or U shape with you at the center is the best way to 
save steps when you work. Obviously, your desk, PC, and 
telephone will be pivotal in either design, but also consider 
keeping close a shelf for books you need frequently, a cabinet 
or drawer dedicated to office supplies, and your fax machine 
or printer. 


*5.   COLLATERAL CHANGES YOUR STATUS AS A CREDITOR 

If you extend large amounts of credit to customers, consider 
requiring collateral. That way, you'll be a "secured creditor" 
if the customer later develops problems in paying. You'll have 
an interest in the property used as collateral and can seize 
and sell it if the person defaults on the loan. 


*6.   HEALTH INSURANCE DEDUCTION 

As you prepare your 1998 Federal taxes, keep in mind that 
self-employed taxpayers can deduct 45 percent of the amount paid
last year for medical insurance for themselves and their 
families. You can find this deduction on line 28 of Form 1040. 
The news gets even better for next year: When you file your 1999 
taxes, you'll be able to deduct 60 percent of the premiums. 


*7.   CALLING IN REINFORCEMENTS 

Many moms and dads choose to work at home in the hopes of 
spending more time with their children. With a little luck, 
both you and the kids will see that as a benefit. But when your 
business is especially busy, keeping up with the housework and 
kids and still meeting your deadlines can be tough. If you're 
lucky, you may be able to call on relatives to help watch the 
kids. If not, be prepared to call for reinforcements--babysitters
and/or housekeepers to help you get through the especially 
busy times. 


*8.   THE PARTS OF THE PLAN 

According to the U.S. Small Business Administration, a business 
plan should precisely define your business and identify your 
goals. The plan should also include a market study and your 
promotional strategy. You'll also need some basic accounting 
information, including a current balance sheet, an income 
statement, and a cash flow analysis. Of course, banks and other 
sources of financing will want to read your business plan before
loaning you money. But business plans can also help sales people
understand your business goals, as well as help suppliers better
understand your operations. You can use the SBA's tutorial on 
business plans at 

http://www.sba.gov/starting/indexbusplans.html 


*9.   TIPS FOR BUSINESS COMMUNICATORS 

Many people have home-based businesses in the field of 
communications, be it freelance writing, training, or Web-site 
development. Kaye Vivian, a member of the International 
Association of Business Communicators with 18 years of 
experience in her field, has developed a series of feature 
articles and tips to help people running communication-based 
businesses. The site offers special sections on writing, law 
and accounting, and communications technology. Plus, you'll find 
tips on making good presentations and developing 
persuasive proposals. 

http://www.users.cloud9.net/~kvivian/ 


*10.   SOCIAL SECURITY TAXES 

If you're self-employed and have earned $400 or more for the tax
year, you'll need to report your earnings on Form SE to 
calculate your Social Security and Medicare taxes. The rate for 
1998 and 1999 is 15.3 percent on income up to $72,600. You pay 
only 2.9 percent--the Medicare portion--on income above that 
level. The Social Security Administration has prepared a 
document explaining the Social Security tax responsibilities for 
the self-employed. You can read it online at 

http://www.ssa.gov/pubs/10022.html
