Barista Magazine

DEC 2014 - JAN 2015

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full picture of your business's net value at the end of the year. If any debt has been eliminat- ed, it should be written off the books. t (FU ZPVS '*$" UJQ DSFE- JU The credit was created so businesses that employ staff who earn tips are able to recover most of the money they doled out for these taxes. Overall, it can be enormously beneficial in reducing your payroll taxes. But you have to request this credit on your tax returns—it's not auto- matic. (Which may explain why many food-service own- ers don't take advantage of it.) Formally known as the "Credit for Employer Social Security and Medicare Taxes Paid on Certain Employee Tips," it allows owners to save hundreds of dollars each year for every employee who correctly reports his or her tips. Add up all of your staff, and the savings could be sig- nificant. t "DDFMFSBUF QSFQBJE FYQFOTFT As you approach the end of 2014, you may have the opportunity to pull forward some expenses from the first quarter of 2015. If paid in December, these expenses can then be deducted on your 2014 tax return, therefore reducing your current year tax liability. Potential pre- paid expenses include state income tax estimates and insurance payments. Note: A current and future cash-flow analysis should be included in this decision process. t &MFDU; UIF 4NBMMXBSFT "DDPVOUJOH .FUIPE This method allows you to expense the cost of any replacement smallwares you purchased this year. Smallwares consists of things like glassware, flatware, dinnerware, pots and pans, tabletop items, bar supplies, food preparation utensils and tools, storage supplies, service items, and small appliances costing $500 or less. If in prior years you've chosen to depreciate items in the smallwares category, an account- ing method change can be made by submitting Form 3115 to the IRS. Note: The Smallwares Accounting Method is not available for smallwares purchased as part of a start-up package. These costs are subject to the depreciation rules for start-up cost. t 8PSL 0QQPSUVOJUZ 5BY $SFEJU 805$ If you employ any individuals from the following groups, you may qualify for a WOTC. —Qualified recipients of Temporary Assistance to Needy Fam- ilies (TANF) —Qualified veterans receiving food stamps or qualified veterans with a service-related disability —Ex-felons hired no later than one year after conviction or release from prison —Designated Community Resident: An individual between 18 and 39 years of age on their hiring date, who resides in an Empow- erment Zone, Renewal Community, or Rural Renewal County —Vocational rehabilitation referrals, including Ticket Holders with an individual work plan developed and implemented by an Employment Network —Qualified summer youth ages 16 through 17 who reside in an Empowerment Zone, Enterprise Community, or Renewal Com- munity —Qualified food stamp recipients —Qualified recipients of Supplemental Security Income (SSI) —Long-term family assistance recipients The maximum credit ranges from $1,200 to $9,600, depending on the employee hired. t 1SPQFSUZUBY BTTFTTNFOU The property taxes paid on your equipment and real estate are based on assessed values. Consider conducting an annual review of assessed values—especially as real- estate prices have declined in some areas—to ensure you are not overpaying your property taxes. While these things are all necessary to close the door on the previ- ous business year, they also help you clear the way for bigger and better things to come in the year ahead. When you view them in this light, they don't seem quite as painful. And if things get complicated, don't be shy about contacting an expert. While you probably take pride in all the hats you can wear as a small business owner, don't hesitate to reach out to a certified accountant when you need a second opinion. ILLUSTRATION BY ELEANOR DAVIS 81 www.baristamagazine.com

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