Believe it or not, it’s time to think about one of the two inevitable things in life – taxes! This can be a stressful time, particularly for small owner-run businesses.

We had posted a great summary of tax “Dos” and “Don’ts” for home-based businesses a while back on one of our web sites. It was so worthwhile that I thought it would be worth reposting here. So, here you go!

Your Home Office: Tax Matters
By Betsy Dee, Small Business Owner

The Home Office Deduction: It’s Okay to Take It. Really.
In 1999, Congress clarified the rules on this once controversial deduction and now allows more taxpayers to take it. But if you’re going to do business out of your home, get to know the rules with our Official Do’s and Don’ts List for Your Home Office.

Your home office deduction is allowed if the space you’re claiming is used exclusively for an office or to store inventory.

DO make it strictly business
Be sure you’re using the space as the principal place of business for meeting clients or customers and/or business administration.

DON’T use it for leisure
Your home office cannot be used for anything other than business purposes (this includes watching television, sleeping, helping your kids with homework on the computer–even paying personal bills online, if you can believe it).

DO take the related deductions you’re entitled to
Take a portion of your rent or mortgage interest, property taxes, utilities and repairs as part of your home office deduction. The deductible portion is based on the square footage of the area used for business as a percentage of the total square footage of the home.

DO claim your eligible deductions in more than one schedule
Take the part of the mortgage interest and property taxes that aren’t deducted as home office expenses as part of your itemized deductions on your Schedule A.

DON’T take the deduction if you pay the ATM
If you generally have to pay the Alternative Minimum Tax (ATM) when you itemize deductions, look carefully at how a home office deduction could alter your AMT status. (You may want to forego the home office deduction.)

DO your homework on capital gains tax
If you include home depreciation as part of the home office deduction, if you sell your home at a profit, you’ll have to pay a capital gains tax on the total amount of depreciation deductions you took while you were living there. (The good news: This tax does NOT apply to any other deductions you took.)

Corporations, Partnerships and multi-member LLCs
Individual owners of S corporations, partnerships and multi-member LLCs can take a deduction for home office expenses if they qualify.

DO know what you’re entitled to claim–and where
Claim the deductions for your home office on your personal return if you’re a shareholder and your home office is your only business office. Form 8829 is used to calculate the deductible amount. List it as a “Miscellaneous Itemized Deduction” on your Schedule A.

DO know the law
By definition, real estate earnings and losses are considered “passive” investments unless you are “actively” and materially involved in the investment.

So if you’re an S corporation, you may be able pay rent to a shareholder for use of a home office. The income and expense would then be treated as rental activity and entered on Schedule E of Form 1040. If the shareholder is active in the S corporation, the activity is considered non-passive and is not subject to passive loss limitations.

DON’T worry. Help is out there
For more information about Passive Activities, visit the TurboTax Support website.

This was  a guest post by Laura Messerschmitt, Product Manager for Intuit QuickBooks, desktop. Like it? Read more here!

Looking broadly across all QuickBooks Online industries, 2009 small business revenue was down by more than 10%.

However, there’s a twist.  It seems the tough times have caused businesses to become wiser about managing their expenses.  Looking at the same broad data set across all industries, 2009 expenses declined by 12%, leading to a 2% increase in profit margin over the same period in 2008.

Effectively, small businesses were more profitable overall due to their ability to contain spending in the face of declining revenue.

How did your small business fair during the trying economic conditions of 2009?  Does this analysis hold true?  What actions did you take to remain profitable?  Please post your comments below.

For QuickBooks Online users: To explore how your business compares to your specific industry, visit Trends from the Company Snapshot page under Reports.

Trends uses aggregated and anonymized QuickBooks Online data to compile stats across over 100 industries to gain insights into the health of small businesses.  (Image from the Trends Application in the Intuit Workplace App Center http://workplace.intuit.com/AppCenter/)

Online tools for strong offline relationships with John Jantsch
Wednesday, February 24 at 10:00am PST

Learn how to leverage social media and other Web tools to build stronger relationships with local customers, suppliers and prospects. John will cover how to create local communities with online groups, and how to access local bloggers and media to raise your brand awareness. He’ll also advise on how to use online communities to create offline events, mine social media platforms for local leads and how to enhance local search engine placement for your business.

Register here

Turn Clicks into Conversations and Relationships with Brent Leary
Wednesday, March 10 at 10:00am PST

Learn the tools and techniques needed to turn content into conversations, conversations into exchanges, and exchanges into long-lasting customer relationships. Brent will teach social listening, automating content creation and distribution, and steps for enhancing the customer experience with your company by facilitating opportunities for customers to connect with each other.

Register here

Find more free webinar events

If you go, share your thoughts or learnings with other QuickBooks Online users. Leave them in the comments.

These posts were no accident.

We are currently working on some features that will make QuickBooks Online easier to use and faster to accomplish your tasks.  However, these features will not work with IE6.  Its time to upgrade to get the most out of the QuickBooks Online.  You will also benefit with other web sites you use, many are discontinuing IE6 support as well.

If it were me, I would first download Firefox and start using it.  You can install Firefox without changing your Internet Explorer version.   Then, when you are comfortable with Firefox, upgrade Internet Explorer. You will end up with 2 excellent browsers on your system. This is only a suggestion, its OK to just upgrade Internet Explorer.

If you are using a Macintosh, then you are already covered.  The new features work fine with Safari and Firefox. 

John Ruberto

About Me:  I’m part of the QuickBooks Online Quality team. When I’m not testing the best small business accounting online service, you might find me on my favorite trout stream.

Photo credit: Altemark, licensed under Creative Commons

QuickBooks Online can now help you answer these questions and more with the new Trends feature, available in QuickBooks Online Plus.

Trends compares your business to others based on peer group classifications. You can:

• View your Income and Expense trends over time
• Compare yourself to your peer group
• Customize the comparison by Industry, Location, and Annual Income

Cool huh? This is accessible via a link in the upper right hand corner of the Company Snapshot page (under Reports).



It gets better! Want to see a comparison of individual account breakdowns?  No problem.  Simply select the “Details” option under both Income and Expenses to reveal a horizontal bar chart with individual account categories.  This allows you to compare something like your Cost of Goods Sold (COGS) with people like you…maybe Health Care Services businesses in Arizona making $100k-$250k or Service businesses in California making less than $50k.  See the Trends!

If you have any comments, thoughts, or suggestions on what else you would like to see from Trends, please leave a post with your feedback, or better yet, visit the Trends page and click on the “Beta” logo to leave your input!!

(To access Trends: Go to the Reports Tab => select Company Snapshot => click on the “Compare me to similar businesses” link)

Below is important information on a scary topic called “Phishing and Cyber Crime”.   But don’t worry, there is a lot you can do to protect yourself from this growing threat!

What is Phishing and Cyber Crime?

Have you ever received an email appearing to be from someone you do business with and trust (like Intuit or maybe your bank) asking you to perform some extremely important (possibly security related) task by a certain deadline?

Many of you probably have.  Many communications like this are the work of Phishers or Cyber Criminals.  These bad guys send out huge quantities of such emails all the time, hoping they will get a few unsuspecting folks to act.  When some trusting individual takes the bait and performs the task, the results can be rather frightening .  Financial, and information security losses are often incurred and it can take a lot of time and emotional energy to right the havoc these criminals can cause.

Your security censor should go off if the email asks you to:

• Download and install safety tools (i.e. Click here to download and install the super secret safety tool)
• Download an important update  (i.e. Click here to download and install the very important update)
• login using a provided custom URL (i.e. “Click here to login”
• with embedded login fields  (Please enter your:  User name ________________  Password ________________   )

Most reputable businesses (like Intuit for example) will never send you “call to action” emails asking you to do any of the above!

These emails are just ways to get a hold of your login credentials or install a key-logger type virus that will record and send all your access IDs and passwords to the criminals.  They then use this information and power to access your finances looking for ways to “get paid”.  This is scary stuff.

But there are steps you can take to help protect against such threats. 

1. Carefully  read any email asking you to perform some task.
2. Look for poorly worded phrases, poor word choice, capitalization, punctuation and spelling mistakes. Often these emails are poorly written and contain these errors. Like “Please will you provides your Password hear to loggin and resolve this problems” If you find such miscues, that’s a big warning sign.
3.  Look for the call to action…  “Do this before X date or else”  The reason the date to act is so close, is the crooks know the site they’ve posted will be taken down soon.  They have a limited window of opportunity to get the unsuspecting to act.  Often only a day or two.  The quick call to action is a huge red flag!

More about QuickBooks emails:

While Intuit might send you a special offer email or three, most concern special price offerings or new services and have a fair of lead time for you to take advantage of them.

If there ever were specific actions we need you to take regarding your program or a service you have subscribed to, we will almost always direct you to take action from within your program (i.e. perform an update or upgrade) or tell you to login to your subscribed service for further instructions.  We won’t provide direct links in the email to perform these tasks.

Intuit takes your security very seriously and as a result we are on the lookout for new attacks all the time.  However, when it comes to protecting yourself from the Phisher or Cyber Criminal, you are the first line of defense.  Staying educated on what is happening and frankly being a little suspicious can go a long way.  Last but not least, have virus protection software installed and keep it up to date.

 Where can I learn more?

Visit security.intuit.com and see real communications AND phony ones too.  You can even report suspicious emails you have received. 

I hope this helped shed a light on this growing area of concern.  Here’s to safe and hopefully cyber crime free 2010!

Best Regards

Dave Rich

In addition to focusing on delivering the best sales and service experience possible and keeping an eye peeled for shady behavior, Dave Rich is a Dad, Grampa, Classic Rock Guitarist and sometime SCCA Racing Mechanic.

Go ahead and try it out! Just enter your usual user name and password on our mobile login page:

https://qbo.intuit.com/m

Are you a Mac user who prefers Firefox to Safari? If so, we’ve got some great news for you: QuickBooks Online can now be used with Firefox for Mac! Just make sure you’re running Firefox 3.0 or higher and log in as you normally do, or use the Log In link at the top of the QuickBooks Online home page.

We’ve worked hard to make QuickBooks Online compatible with more browsers than ever before, and we’re very happy to have reached this milestone. But that doesn’t mean we’re finished! Please keep sending us your feedback to let us know how we can improve.

Check out the End of the Year guide to help you through these sticky questions.  And if you have gone through this, or have questions, please leave them in the comments.

You have to be logged into QuickBooks Online to see this!

Information you should know: The deadline to send independent contractors and employees their 1099-MISCs and W-2s is Feb 1st.

For you do-it-yourselfers, we know it can be a headache to gather all the payments, worker info, and do the calculations between year end and the deadline  (QuickBooks definitely helps with some of this remember). But, the 1099-MISC is especially troublesome if you’re filing manually because the IRS requires using a special paper form with red-boxes, which can only be ordered in packets of 25 or more – not very practical for those of you with just a few contractors!

We’re happy to share an easier way to finish these forms quickly and easily. A new service from our friends in TurboTax called Quick Employer Forms provides step-by-step guidance to prepare 1099-MISC, W-2 forms and e-file for only $2.95 each.

Bonus: If you finish your forms before 6:00AM PST on Jan 28, they will even mail them to your contractors and employees by the deadline. We hope you like it!

Check it out.