The Greater Sunrise Chamber of Commercecloud.chambermaster.com/userfiles/UserFiles/...Increase Your Bottom Line When You Work at Home The home office deduction is quite possibly one

Volume 1, Issue 2, October —December, 2013

The Greater Sunrise Chamber of Commerce

There are a lot of exciting events and opportunities for the Chamber and businesses in the City of Sunrise. But, first, I want to outline the health and vitality of Sunrise. We have just completed our budget “season”. In days of old, the budget season was a couple of months over the summer. How-ever, our Commission has recognized a budget process is a yearlong effort of vigilance and dedication. With efforts throughout the year, we were able to address looming deficits with innovative restructuring of departments, fiscally responsible actions such (as defeasing debt) and rethinking how we do “business”. As a result, there were NO increases in taxes, NO increases in the fire fee, NO increases in fees on businesses, NO increases of leisure services fees and we did not have to “raid” reserves. In fact, our reserves remain stable and secure, allowing us to know we are able to respond to future potential crises in a more agile and dynamic manner. At the same time, we have maintained excellent public safety services (including award winning services) and that which makes living, working and playing in Sunrise attractive. We continue to lead the county in quality public safety, innovative programs to support our schools and the arts, and some of the best events and services for our residents and visitors. There will always be issues to address and there is never a time for complacency. However, we are poised to come out of the worst economic crisis in 80 years leaner, more efficient and with high level services preserved. On the business front, we are seeing greater and greater interest in smart development and re-development in various corridors in Sunrise. Because of our unique location and ease of access to highways, Sunrise enjoys being on the short list for both relocation and new development consideration. The substantial improvements to customer service in our Community Development Depart-ment continue to achieve accolades. More important than the recognition, we are seeing businesses get open on time in the most cooperative spirit the City has ever experienced. When there are concerns or questions, simple email me, the City Manager or Di-rector of Community Development and we will work together to resolve the issues. This will be an exciting year for our community. Chess in Sunrise. Sunrise has led the county in innovative programs meant to introduce chess in our schools and community. We are not teaching a board game, but using chess to distinguish Sunrise and Sunrise schools because the academic benefits of teaching chess to the young are irrefutable. “Family Fun Nights” in cooperation with the chamber have brought families out to local restau-rants. Our free Sunrise Chess Club program on Saturday morning has opened up chess to all ages and already begun teaching the next generation the game. Two of our elementary schools received a grant and gap funding from the Police Department forfeiture fund to provide chess classes to every 2nd and 3rd grader – the first time in the history of Broward County Schools! The Arts. Sunrise continues to provide quality programs to support culture and arts. Our festivals drew record crowds last year. Our July 4th celebration was a regional hit. Our Sunrise Pops are now coming back to the Civic Center for the upcoming season. The Fort Lauderdale International Film Festival again returns to the Sunrise Civic Center in October. Our gallery offers thought-provoking and soul inspiring opportunities. Our free concert series was more popular than ever last year and we are expecting an-other great year. Small Business Advisory Board. Our small business efforts continue to develop great recommendations and ideas for improving the opportunity for small businesses in Sunrise while supporting retention and growth of existing businesses. I encourage you to engage with the Small Business Advisory Board for ideas and suggestions big and small. Recreational activities. Our Horizons magazine inventories the amazingly diverse opportunities to find a hobby, or show off tal-ent. Seven Bridges G.C. has become even more popular across the region and for all ages. Our youth athletics is robust and meet-ing the needs of our community. Charity. Sunrise is so blessed to have a deep reservoir of caring, compassionate and empathetic businesses and residents. Last year, we saw the Chamber and individual chamber members choose one charity after another to make a difference in our commu-nity. Our Wounded Warrior Softball City-Chamber event was better than ever (other than the outcome of the game, of course). The backpack program for students and Thanksgiving turkey basket efforts for families in need gave back so much and generated goodwill in our soul. Of course, Relay for Life was more than just a charitable effort, it was a spectacular community event. Through all the great charitable works, we became closer as a community. We have more to do. We need to support our schools through volunteerism and resources; great schools build great neighbor-hoods, which support local businesses -- all of which compound to strengthen our City. We need to further spotlight the amazing talent in our community through greater support for the arts and culture. We need to improve our parks to ensure our parks are available and open to use, rather than consistently closed due to field conditions. We need to continue to innovate on how we can support small businesses grow and retain those that call Sunrise home. We have to maintain fiscal discipline without cutting ser-vices. These are all challenging efforts. But, if recent history is any indication, there is nothing we cannot do together for we all share the same goal of making our community the strongest and most enduring for residents, visitors and businesses.

Mayor Michael Ryan

City of Sunrise

Tax Planning for Small Business Owners

Tax planning is the process of looking at various tax options in order to determine when, whether and how to conduct business and personal transactions to reduce or eliminate tax liability. Many small busi-ness owners ignore tax planning. They don’t even think about their taxes until it’s time to meet with their accountants, but tax planning is an ongoing process and good tax advice is a valuable commodity. It is to your benefit to review your income and expenses monthly and meet with your CPA or tax advisor quarterly to analyze how you can take full advantage of the provisions, credits and deductions that are legally available to you.

Although tax avoidance planning is legal, tax evasion—the reduction of tax through deceit, subterfuge, or concealment—is not. Frequently what sets tax evasion apart from tax avoidance is the IRS’s finding that there was fraudulent intent on the part of the business owner. The following are four of the areas most commonly focused on by IRS examiners as pointing to possible fraud:

1. Failure to report substantial amounts of income such as a shareholder’s failure to report dividends or a store owner’s failure to report a portion of the daily business receipts.

2. Claims for fictitious or improper deductions on a return such as a sales representative’s substantial overstatement of travel expenses or a taxpayer’s claim of a large deduction for charitable contribu-tions when no verification exists.

3. Accounting irregularities such as a business's failure to keep adequate records or a discrepancy be-tween amounts reported on a corporation’s return and amounts reported on its financial statements.

4. Improper allocation of income to a related taxpayer who is in a lower tax bracket such as where a corporation makes distributions to the controlling shareholder’s children.

Tax Planning Strategies

Countless tax planning strategies are available to small business owners. Some are aimed at the owner’s individual tax situation and some at the business itself, but regardless of how simple or complex a tax strategy it will be based on structuring the strategy to accomplish one or more of these often overlapping goals: Reducing the amount of taxable income Lowering your tax rate Controlling the time when the tax must be paid Claiming any available tax credits Controlling the effects of the Alternative Minimum Tax Avoiding the most common tax planning mis-takes

In order to plan effectively, you’ll need to estimate your personal and business income for the next few years. This is necessary because many tax planning strategies will save tax dollars at one income level, but will create a larger tax bill at other income levels. You will want to avoid having the “right” tax plan made “wrong” by erroneous income projections. Once you know what your approximate income will be, you can then take the next step: estimating your tax bracket.

Maximizing Business Entertainment Expenses Entertainment expenses are legitimate deductions that can lower your tax bill and save you money—provided you follow certain guidelines.

In order to qualify as a deduction, business must be discussed before, during or after the meal and the surroundings must be conducive to a business discussion. For instance, a small, quiet restaurant would be an ideal location for a business dinner. A nightclub would not. Be careful of locations that included ongo-ing floor shows or other distracting events that inhibit business discussions. Prime distractions are theater locations, ski trips, gold courses, sports events and hunting trips. The IRS allows up to a 50 percent de-duction on entertainment expenses but you must keep good records and the business meal must be ar-ranged with the purpose of conducting specific business. (cont. top of next page)

Important Business Automobile Deductions

If you use your car for business such as visiting clients or going to business meetings away from your regular workplace you may be able to take certain deductions for the cost of operating and maintaining your vehicle. You can deduct care expenses by taking either the standard mileage rate or using actual expenses. The mileage reimbursement rates for 2013 are as fol-lows: 56.5 cents a mile for business, 24 cents for moving and medical miles and 14 cents per charitable mile. If you own two cars, another way to increase deductions is to include both cars in your deductions. This deduction works because business miles driven is determined by busi-ness use. To figure business use, divide the business miles driven by the total miles driven. This strategy can result in significant deductions. Whichever method you decide to use to take the deduction, always be sure to keep accurate records such as a mileage log and receipts.

Increase Your Bottom Line When You Work at Home

The home office deduction is quite possibly one of the most difficult deductions ever to come around the block. Yet, there are so many tax advantages it becomes worth the navigational trouble. Here are a few common tips for home office deductions that can make tax season sig-nificantly less traumatic for those of you with a home office. Try prominently displaying your home phone number and address on business cards, have business guests sign a guest log book when they visit your office, deduct long-distance phone charges, keep a time and work activity log, retain receipts and paid invoices. Keeping these receipts makes it so much easier to determine percentages of deductions later on in the year.

Section 179 expensing allows you to immediately deduct, rather than depreciate over time, up to $500,000 with a cap of $2,000,000 worth of qualified business property that you pur-chase during 2013. The key word is “purchase”. Equipment can be new or used and includes software. All home office depreciable equipment meets the qualification. Also if you purchase more than $500,000 in equipment, you can expense the first $500,000 and then depreciate the rest. In addition, a “Bonus Depreciation” of 50 percent is allowed on qualified assets (new equipment only—no used equipment and no software) placed in service during 2013. Some deductions can be taken whether or not you qualify for the home office deduction itself.

If you’d like to meet with us to learn more about home office deductions, please give us a call.

Ivy Defino, CPA

For Your Protection What is suspicious? Here are some examples…

• Slow moving vehicles, vehicles without lights, and /or the course followed appears aimless or repetitive - this is suspicious in any location but particularly in areas of schools, parks, and playgrounds

• Individuals moving from car to car or house to house, especially if they appear to be looking into windows • Audible alarms sounding (house or vehicle), don’t assume someone else called it in • Persons attempting to forcibly enter a locked vehicle, especially at night • Property carried by persons on foot, especially questionable if the person is running – may be significant

if the property is not wrapped as if just purchased • Someone going door-to-door in a residential area if after a few houses are visited, one or more of the

subjects goes into a back or side yard - more suspicious if another remains in the front when this occurs or if individuals are jumping fences

• Someone waiting in front of a house when the owners are absent • Open or broken windows at closed businesses or residences whose owners are temporarily absent • Don’t be fooled by young individuals, females or people that are well dressed – if their actions are suspi-

cious, call it in Officer Michelle Eddy, Sunrise Police Department

SEE IT – HEAR IT – REPORT IT (954) 746-3600

You can Register online for all the Sunrise Chamber of Commerce Events at www.sunrisechamber.org. Also you can Download the FREE Mychamberapp to your Smart Phone so you NEVER Miss an Event!!