5 Cheap Apps That Can Run Your Small Business

Donna Fuscaldo for FoxBusiness writes: Small business owners are used to operating on a shoestring budget and wearing multiple hats. And today there are a slew of free and low-cost mobile apps that can help. From apps that can handle your accounting to ones that will answer the phone for you, here’s a look at five apps that can replace your office workers and potentially save you a bunch of money.

LocalVox

Every small business owner knows they should be on social media, but for many there simply aren’t enough hours in the day to run a business and market online. One service that’s aiming to solve that problem is LocalVox www.localvox.com. This apps helps small business owners by publishing news, promotions and events with the click of a button. The information will show up on social media, in local online directories and on your website. Pricing for this service varies, depending on the small business owner’s needs, but for many not having to market on their own or hire a professional can be invaluable.

InDinero

Hiring a finance person to take care of your books can be costly, especially if you are paying for health care and other benefits. Even using a consultant can get costly, and that’s where InDinerowww.indinero.com comes in.  Not only will this service handle your accounting, taxes and payroll, but it gives the business owner graphs and analytics so they can understand what’s going on with their finances. As like most services, the pricing varies based on the size of the business.  Business owners are given a flat monthly rate.

Tripit

Whether you have a receptionist handle it, or do it on your own, managing your travel can be time consuming and expensive. TripIt aims to save you time -- which is money -- by organizing all your travel plans into easy to read itineraries. All business owners have to do is forward trip confirmation emails to plans@tripit.com, and the service will automatically build an itinerary that can be accessed online or via your mobile device. The best part: the basic service is free. Want more bells and whistles such as mobile alerts, itinerary sharing and alternative flight information? It will cost you $49 a year.

TextUs.Biz – Receptionist

In a perfect world all of your business calls would get answered and you wouldn’t have to hire a full time receptionist to make that happen. Well, that may just be a possibility with The Receptionist app fromTextUs.Biz, which turns your iPad into a virtual receptionist. Basically when a visitor walked into your office it would be greeted by an iPad with your business logo and touchscreen prompts, depending on who the person is visiting. Small business owners can receive visitor arrival notifications via text or email, or both. When you respond back the message will show up on the iPad screen, allowing a two way conversation. You can even create visitor badges with this app. A basic package will cost you $49 a month, while the pro version will be $149. There’s also a premium package which costs $99 a month.

iXpenseIt

Cash flow can be a big problem for small business owners, especially if they don’t know where they stand. An app that makes it easier for small business owner’s to stay on top of their cash flow and eliminate the need for a bookkeeper is iXpenseIt. For $4.99, this mobile app gives business owners a complete snapshot of their monthly budget and expenses and also includes a visual indicator to show at a quick glance how much money is left in the budget. But the app doesn’t stop there.  It makes it easy to add and delete records and even has a built in currency exchange translator.

Does Tax Loss Harvesting Matter?

Crestwood Advisors writes: The recent Memorial Day weekend kicked off the “unofficial” start of summer.  Contrary to the old adage “sell in May then go away” the team at Crestwood does not have a summer sabbatical planned for the next few months.

Through the summer we will continue to actively manage your accounts with the important goal of maximizing your net of fee and after tax returns.   As you may have noticed while filing your 2013 tax return, an important aspect of our ongoing portfolio management is tax loss harvesting in your taxable accounts.

Tax loss harvesting is defined as selling securities at a loss to offset a capital gains tax liability.  Capital losses generated can be used to offset other gains and reduce taxes.   Given a top Federal marginal tax rate on income of 39.6% and a top Federal tax rate on capital gains of 20%, or 23.8% for couples earning more that $250,000, these savings are increasingly important.

The opportunity that arises from reducing taxes and resulting in additional money in client accounts is significant and meaningful over time.  It becomes even more significant when the tax losses provide an opportunity to shift the recognition of gains into lower tax years. For example, you may be in a relatively lower tax bracket during early retirement years before you are subject to minimum distributions from your retirement portfolios.  In these years, depending upon your adjusted income, you may be able to reduce your tax rate on capital gains from 20% to 15% or potentially 0% and avoid the 3.8% Medicare Contribution tax.

Tax loss harvesting isn’t always as simple as it seems.  There are a number of important considerations that we need to pay attention to:

• Wash sales: if we sell a security or fund with losses and buy it back (or a substantially identical one) within 30 days before or after the sale, this is a wash sale.  Any losses generated can not be claimed for tax purposes.
• Death of taxpayer: capital losses cannot be carried over after a taxpayer’s death. These losses are deductible only on the final income tax return filed on the decedent’s behalf.
• Additional technical tax nuances with regards to short term capital losses on tax-exempt interest and qualified dividends, issues that are best left to your accountant.

As long term investors, each year we look to accrue benefits from tax loss harvesting.  Beyond offsetting gains, losses that exceed realized gains can be deducted against ordinary income up to $3,000 annually. These losses can then be carried forward indefinitely, first offsetting gains going forward and reducing your income annually until the loss is fully extinguished.

At Crestwood, our goal is to exceed client expectations. Our attention to the after-tax impact of investment decisions highlighted by our opportunistic and proactive approach to harvesting losses to reduce the taxes on your capital gains and/or ordinary income may provide a meaningful difference in your after-tax returns. Please let us know if you have any questions about how these considerations impact you. We are always eager to speak with you. 

S Corporations And Partnerships – The Importance of Basis

Devon McCarthy for Tax Connections writes: Basis is very important when determining gain or loss for certain transactions. It is also one of the limiting factors in determining how much loss can be deducted by partnership and S Corp shareholders.

What is basis?

For tax purposes, basis is the amount invested in a property adjusted for certain items.

Basis is usually equal to the cost, or the amount paid in cash, debt obligations, other property or services.

Basis in property is increased by capital items such as capital improvement and assessments for local improvement. Items that constitute a return of capital (e.g. non-dividend distributions, casualty and theft loss, and depreciation) should be treated as a reduction in basis.

Partnership Basis

A shareholder in a partnership may not be able to deduct the full amount of a partnership loss that is passed through to the shareholder. There are three important limitations to the amount of the loss that can be deducted on the partner’s tax return. The order of the limitations is important and they are:

1. Basis rule
This limits the loss deduction to the adjusted basis of his partnership interest. Losses disallowed by this limitation may be carried forward indefinitely.

2. At-risk limitations
The loss deduction is limited to the amount that the partner could actually lose in the activity.

3. Passive activity limitations
Deduction of passive activity losses may be limited.

The basis of partnership interest is money plus adjusted basis of any property contributed to the partnership.

A partner’s basis is increased by:

• Additional contributions (including assumption of liability)
• Partner’s distributive share of taxable and non-taxable partnership income
• Partner’s distributive share of excess deductions for depletion (excluding oil and gas wells)

A partner’s basis is decreased by:

• Distributions to the partner (including partner liability reduced or assumed by the partnership)
• The partner’s distributive share of partnership losses (including capital loss)
• The partner’s share of non-deductible partnership expenses
• The partner’s deduction for depletion for oil and gas wells (limitations apply)

A partner’s basis cannot be reduced below zero.

S Corporation shareholder stock basis

The stock basis of an S Corp shareholder must be adjusted annually as of the last day of the S Corp’s year. The corporation is not responsible for tracking the shareholder’s stock basis it is the responsibility of the shareholder.

The S Corp shareholder is subject to similar loss deduction limitations like the partnership shareholder as described earlier. It is therefore important to determine the correct amount of the shareholder’s basis to know how much loss can be deducted. The basis is also important when there is an S Corp distribution or to determine gain or loss when a shareholder disposes of his stock.

Non-dividend distribution from an S Corp is tax free up to the amount of the shareholder’s stock basis. Any excess is treated as long-term capital gain on the partner’s personal return.

An S Corp shareholder’s basis is the initial capital contribution increased by:

• Separately stated income items
• Ordinary income
• Tax-exempt income
• Excess depletion

Basis is reduced by:

• Ordinary loss
• Separately stated loss
• Expenses that are non-deductible
• Distributions (non-dividend)
• Depletion for oil and Gas property held by the S Corp.

Stock basis cannot be reduced below zero.

There is a strict ordering rule for the adjustments to basis. Adjustments must be done in the following order:

1. Increased for income items and excess depletion
2. Reduced for distributions
3. Reduced for non-deductible, non-capital expenses and depletion
4. Reduced for items of loss and deduction

S Corporation shareholder debt basis

Debt basis is the amount that has been personally lent to the corporation by the shareholder. A loan guarantee does not create debt basis.

Computation of both Stock and debt basis is a requirement for S Corporation shareholders. The variable nature of the stock basis for S Corp shareholders makes it necessary for the shareholder to keep track of the changes.

Each shareholder will receive a Schedule K-1 from the corporation reflecting the amounts of the corporation’s income, loss and deductions allocated to the shareholder for the year. The K1 does not show the taxable amount of a distribution. The shareholder’s stock basis will be used to determine the amount of a distribution that is taxable.