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To file or not to file

It’s getting down to the wire. You’ve got less than 48 hours to file your taxes if you’ve haven’t done so already. Chances are that if you haven’t filed your tax returns yet, you’ve got a small business and/or a more complex tax return that goes well beyond the scope of free tax filing programs.

The most obvious thing to do if you need more time is to file an extension, which gives you until Oct. 15^th (for personal income tax) or Sept. 15^th (for business income tax) of this year to file your taxes. Filing an extension can give you advantages; however, it can also increase the total amount you’ll be paying via interest and late fees. So, depending on how close you are to completing your tax returns, you’ll have to gauge whether to file or not to file by the April 15^thdeadline, or rather, whether you should file for an extension or not.

Here are some common reasons why you might postpone filing your taxes:

• You haven’t compiled all the necessary paperwork needed to file your taxes correctly. You want to make sure you’re recording every single deduction you can take.
• You own a business and want more time to fund tax-deductible retirement plans. A Keogh Plan, for example, lets you deduct either 20% of gross self-employment income or $49,000 (whichever is less) in 2009.
• Your accountant will have more time to address your specific tax issues and needs. If you shelled out the money to hire an accountant, you want to make sure you’re getting your money’s worth. Your accountant will have more time to devote to completing your return when they aren’t rushing to complete a dozen other returns.
• You probably won’t be audited. Usually, tax auditors fill their quotas before the April 15^th deadline. So, the more time you spend on getting your tax return right, the better.

Filing an extension

To file an extension for personal taxes, you’ll be using Form 4868; for a business tax extension, you’ll use Form 7004. To file a business tax extension, all you need to provide is your business information (name, address and tax ID) and an estimation of your total income tax payment (which can be done easily by multiplying your past year’s profits by the applicable tax rate). Any major tax software will help you estimate the number.

The IRS strongly suggests making a payment based on your total tax estimation by April 15^th, in order to reduce the amount of interest and late fees (which can get up to as much as 25% of your income tax) you’ll have to pay post-deadline. Don’t worry about overpaying. In fact, the IRS will send you a refund if your estimated payment ends up being too high.

Audit triggers

Rhonda Adams in USAToday cited nine triggers that can lead to a tax audit. Many of the triggers relate to conflating personal expenses with business expenses. In other words, writing off your recent African safari adventure as a business expense is not a great idea. Also, unwarranted and frequent lavish parties (which you might have actually cut down on this year due to the recession) are likely to come under scrutiny.

Another major item that’s been increasingly scrutinized lately is home office deductions. If you own a small business, it may be tempting to take home office deductions even if you don’t actually have a home office. To err on the side of caution, take these deductions if you’re positive you have the proper documentation to back them up.

Tips: You can use the free authorized e-filer FileLater (FileLater.com) to file your personal and business extensions. Their Personal Tax Extension system is able to file both personal and business extensions for you on one form, which is convenient for sole proprietors or single-member LLCs.

If you used one of the well-known tax software providers to file your returns, you can easily file your extension through their web site. TurboTax has a new, free service called TurboTax Easy Extension this year. Similarly, H&R Block’s TaxCut offers TaxCut Online/Software Extension, although they charge a fee of $19.95 for e-filing your return. As an added incentive, TaxCut also gives you $10 off TaxCut Premium or Signature when you file your extension through them. However, this offer would most likely apply to people who started their tax return with another software provider and found themselves dissatisfied with the service.

E-filing errors

Here’s another compelling reason to file for an extension on your taxes: e-filing errors. If you’re a major procrastinator, don’t assume that you can be up late on the 15^th, frantically rushing through an online system. This isn’t your freshman history paper—no partial credit if it’s not completely finished. Getting through the filing steps on a tax software service is just the first part of the process. Because you’re human, you’ll be forced to review and fix items in your return that may pose problems and delay your e-filing.

And don’t think that once you e-file, you’re home free. The IRS still has to approve your e-filed return. If you selected the direct debit/credit payment option, but for whatever reason your e-filed return was rejected, then your payment may be considered late unless you file an extension. The error could be as simple as incorrectly entering your birth date (i.e. your birth date not matching your SSN) or spelling your last name incorrectly.

(For a more detailed list of common e-filing errors, please visit the E-filing Errors and Issues on TurboTax’s support page.)

No matter how thorough you think you are, you can be just as prone to simple mistakes as anyone else, which you have a greater chance of making if you’re filing last-minute.

Jennifer Silva
ChooseWhat.com
Tax-Compare.com

Well-known IT research firm, Gartner Inc., predicted last month that by 2011, mobile phones will completely replace desktop phones for the majority of businesses in North America (Gartner.com). This suggests that the days of traditional phone systems are numbered and that hosted PBX services will become the regular means of business telecommunications over the next couple of years. So I’ve decided to write a post detailing the why and how of mobile business functionality.

What is Hosted PBX and what does it have to do with mobile phones?

Hosted pbx (also known as a “virtual” phone system) is a “cloud technology” that allows you to manage your business phone system online through a web-based interface. Many businesses and small businesses already utilize virtual phone systems instead of costly traditional phone systems. If the majority of business phones will be mobile phones by 2011, as Gartner predicts, then we’d have to assume that the transition will be made possible by hosted pbx, which allows you to route calls, to let multiple people receive a call from one phone number, and to transfer calls between employees. A hosted PBX gives you all of the functionality of a traditional business phone system, but it also allows you to access and manage your phone system from any computer, or mobile device.

Is switching to mobile phones practical right now?

It depends. There are a few factors to consider when evaluating business pbx on mobile phones as a viable alternative to traditional pbx systems. Even though more and more people are purchasing Smartphones nowadays, utilizing virtual pbx on these phones takes a bit of work. According to ChooseWhat.com’s own Nick Middleton, “Although incoming calls to office extensions could easily be forwarded mobile devices using basic plans from providers like Phone.com or RingCentral, outgoing calls require the mobile user to manually call into their system, log in, and then place the call. However, it is impractical for cell phone users to complete this process every time he or she wants to make a call.”

The solution? Recognizing the challenges facing pbx/cell phone users, RingCentral has released an iPhone application that automatically logs on to the RingCentral system and lets the user easily make outbound calls. Other competitive hosted pbx providers are expected to follow suit in the near future. As new Smartphone pbx applications become more available, utilizing business pbx capabilities on a mobile device will become increasingly easier.

If the majority of people in your office are already using Smartphones, then utilizing business pbx capabilities would be a matter of simply installing an inexpensive pbx application on the phones. If your employees do not currently own internet-accessible phones, then you may need to evaluate the costs/benefits of replacing or supplementing their mobile devices.

How should I start going mobile?

Gartner outlines a four-step plan that companies ought to follow in order to transition from traditional hardware to mobile systems: Plan (how and when to make the switch), Procure (a reliable service plan), Manage(costs, standards and security) and Remove (hardware). A plan for switching to mobile pbx systems might be rather detailed and complex for large corporations, but for many small businesses, the process may be rather simple. While it may take a large corporation several months to internally implement the phone system change, a small business can do so in a matter of days.

Not ready to go mobile?

The report from Garter simply outlines a growing trend for business telecommunications. In no way should it dictate the choices you make about how to run your small business. So, you shouldn’t feel pressured into going mobile if you feel you or your company just isn’t ready. But, even if you don’t decide to take your business from traditional phone systems to mobile pbx overnight, there’s no need for you to wait until 2011 to start utilizing hosted PBX services, which can replace your current phone system with low-cost desktop phones with full business pbx functionality. In fact, since the economy is forcing many enterprises and small businesses to cut down operating costs, hosted pbx is quickly becoming the preferred alternative to traditional phone systems.

Jennifer Silva
ChooseWhat.com

A webinar I participated in yesterday (Using Your News to Drive SEO, via PRWeb) brought to light some very salient points that directly relate to my last post about web site creation and SEO for non web-based small businesses. Here are a couple of the most reassuring reasons to get online (described by Mr. Lee Odden):

1. Brick-and-mortar stores (especially “mom ‘n pop shops”) can benefit more than they realize by optimizing online.

Example: There’s a local cupcake shop that only sells cupcakes in one city. But the cupcakes are so good that people drive half an hour, an hour, or more just to buy cupcakes from that one store. These people may not stay in that city; they may move away, which people often do. But while they’re away, there’s a strong chance that they’ll crave those cupcakes and want to order some online. If this store had a website, and it was optimized for specific search keywords, a person could easily find information about the store and have a place to request orders. So, even if the cupcake shop doesn’t do deliveries yet, they’ll at least be able to gage when/if they should expand. So, online optimization is mutually beneficial for the cupcake shop and for its customers.

2. Being visible online helps get you on the radar for any journalists who might write about your business.

Journalists are being asked to do more with less these days—that’s why they’re always searching online in lieu of other research methods. And even if they’re not using search and social media tools now, a great majority of them will in the near future. So, it’s very possible for your business to get on the 10 o’clock local news via optimized keywords on Twitter. And who doesn’t want free publicity for their business? It pays to be online.

Jennifer Silva
ChooseWhat.com

As I was searching Google for “small business tools” today (as I regularly do), I came across an article written by CPA Gene Marks called “We Don’t Need No Stinkin’ Web Sites” (BusinessWeek), and I was shocked.

Mr. Marks begins with a “statistic”: 40% of small businesses don’t have a web site. He then uses this statistic as support for his central thesis, which is simply that not every small business needs a web site. I’m sure you can easily spot the non sequitur. (Answer: Just because some small business owners don’t have a web site, it doesn’t necessarily follow that they don’t need a web site.)
In fact, there are so many reasons why you should have a web site that I decided not just to comment on Mr. Marks’ post, but to write a rebuttal article dispelling the web site myths Mr. Marks seems so eager to propagate.

Myth #1: Site Rank is the Be-All-End-All of web site value.

Mr. Marks asks you to do a “fun exercise”: check the rankings for some of your local small businesses and see how low their sites rank online, “[w]hich means that no one, other than [the site creator’s] mother (and my mother), is visiting it.” Marks’ conclusion? You shouldn’t waste money on a site that nobody visits. When people say they are “ranked” they usually mean indexed by a search engine for a particular term. Indexing is only important if you are using search engines to drive traffic to your site. For instance if you provide landscaping services in Austin, Texas, it would be valuable to you for people searching for “landscaping in Austin” to be shown your website as a search result. However, the majority of small business owners simply need to be easy to find for people who are looking for them specifically. Your goal would be to provide information to people who are trying to learn more about your business, which is the main reason why you need a web site. Mr. Marks would have you believe that, if you’re going to create anything online, a single web page will suffice. By the end of this article, I will have explained why a web page is not a viable solution to lacking a web site.

Myth #2: Creating a web site takes lots of time, money and outside help.

Mr. Marks makes a distinction between a web page (which he admits most small business owners should create) and a web site, which he defines as “a collection of many Web pages” with “[l]ots of pretty pictures…Flash videos…Pop-up windows…High-definition graphics.” But it’s a distinction that didn’t need to be made at all. Just because a “web site” contains multiple “web pages,” it doesn’t mean that it’s necessarily harder to create than a single web page. In fact, creating a web site is the next logical step if you already have a pre-existing web page (which I’ll explain in the next section).

Quite a few people still think that if they don’t have the first clue about setting up a web site, they ought to immediately go out and hire a bunch of expensive experts, or, as Mr. Marks likes to say, “one of those turtleneck-and-vest-wearing, greasy-haired propeller heads.” But the truth is that many free web site builders and site creation wizards give you the ability to do what the experts do, without having to spend many hours or dollars. The most popular and affordable web hosting providers like GoDaddy, HostGator or BlueHost include such tools with their service for free. You can use and edit pre-created web page templates or even input your own HTML or CSS code. There are even a few free flash site builders out there that can help you create a site that looks like it was professionally done.

My advice? Sign up for a free trial of any web hosting service and test it out. You’ll find that it’s a lot easier and more fun than you probably thought it would be. Just last week, our entire office did an exercise that proved this point to be true. Each person, myself included, signed up for a web hosting service and created sites using free site builders and/or free web site creation tools found online. At the end of the week, everyone from our Office Manager to me, a writer with little to no experience in programming or graphic design, had easily created a professional web site that could rival many others already indexed on search engines.

(Check out some of our staff’s web sites: PartyChronicles.com, TextThings.com, The-Fax-Guide.com, Compare-Fax.com, ExecSuiteFinder.com)

Myth #3: Web sites are only good for web businesses.

The assertion that websites are good for web based businesses is intuitively obvious. The assertion that they are worthless to non web based businesses is ridiculous. Many small service businesses such as lawyers, accountants, etc. use their websites to inform potential customers about their services and to generate leads by capturing information from such potential clients. These are clearly not web based businesses, but they will clearly benefit from an easy to use, professional looking website.

Mr. Marks argues, however, that web sites are necessary for some specific small businesses (i.e. “if you’re in the Internet porn business, or sell things online”) and superfluous for others (i.e. “gas station owners, restaurateurs, insurance agents, shopkeepers…CPAs, architects, landscapers, plumbers, and electricians”). The latter group, he says, doesn’t have money to waste on web sites because they need to invest elsewhere. “They’re O.K. with no web site,” Marks declares.

My question to him would be, “Are you O.K. with just O.K.?” Does O.K. sound like a small business that’s exceedingly successful? The fact is that if you’re operating your small business under a “simply getting by” mentality, then you certainly will not get by, especially not in this economy—when each and every potential new customer plays a crucial part in helping your business survive.

Let’s use one of the groups that Mr. Marks claims can get by without a website, restaurateurs, as an example. Just a few days ago, I decided to Google one of my favorite local restaurants. But instead of an official web site, I saw a MySpace page at the top of the search results. And I groaned. What’s wrong with a MySpace page (or Facebook page, or any other type of page which might serve as a business card or brochure for your business)? A MySpace page is created first and foremost for MySpace users, just as a Facebook page is created for Facebook users. So, the problem is that there just wouldn’t be any way to transcend that very specific user-niche with just a single “web page.” This is why Mr. Marks is very wrong. A MySpace page ought to be a supplement to a web site—not the other way around. In fact, if you’re actually paying somebody to host a single page that displays nothing but contact information, then you’re probably throwing your money away.

Imagine if the restaurant I Googled had a web site where information was easily accessible to any and every user. Imagine pages of information—not only contact information and business hours, but a full-scale menu, a page to place orders for delivery or pick-up, a page about the products they use, the freshness and quality of the food, a feedback section or forum for people to discuss what they like or don’t like, pop-ups with weekly coupons or daily specials. That, my friend, is a full-fledged web site. And it is something that could very well attract enough people to keep a restaurant operational for a long time. Finally, it is something you can create yourself for as low as $10 a month and a couple of days.

Jennifer Silva
ChooseWhat.com

The Austin Business Journal reported today that Hilton is planning to create a new, luxury hotel here in Austin, which is among a list of cities, such as Abu Dhabi, Cancun, Hollywood, Jerusalem and Mumbai that are planned sites for Hilton’s new Denizen brand hotels. While I think it’s kind of cool that Austin is being recognized as a “cosmopolitan city,” I’m wondering how Austinites are going to take the news. I guess in the near future, out-of-town SXSWers will have more choices of where to stay when they visit.

On the flip side, Expedia.com just updated their site with a searchable list of “green” hotels around the world, which ObamaNews twittered about recently. Although it’s a cool concept, I noticed that there are only 11 of these hotels in the U.S. so far, none of them being in Texas. Perhaps the Denizen in Austin will be the first, but I’m not holding my breath.

There are a couple of smaller hotels and B&B’s that have cropped up in Austin lately. Tell us, where do you stay while on a business trip? Please feel free to share your recommendations.

Jennifer Silva
ChooseWhat.com

TurboTax has just tweeted that they’re giving away free copies of TurboTax Business today, no strings attached. TurboTax Business Edition is designed for corporations, partnerships and LLCs. It can import data from QuickBooks, maximize your business deductions and provide quality support and guidance through the filing process.

You can access the free software download here: http://budurl.com/freebiz.

Have a great Friday!

Jennifer Silva
ChooseWhat.com, LLC

ChooseWhat.com is now on Twitter! Via Twitter, we’ll be bringing you updates on all of our comparison and review sites as well as helpful links and useful tidbits of information. Here are a couple of our latest updates:

• ChooseWhat newsletter going out tomorrow today! Useful info on taxes, phones, faxes, and email marketing stuff.
• We reviewed a new internet fax service today! Check out the review at: http://www.faxcompare.com/venali
• We launched http://www.Business-Toll-Free.pbxcompare.com as a subdomain of PBXCompare.com earlier this month. Press release will be live tomorrow!

Start following us at http://www.twitter.com/choosewhat!

Jennifer Silva
ChooseWhat.com

Correctly Calculate Your Recovery Rebate Credit for 2008:

Many news outlets have already reported that a recent sampling of already-filed tax returns shows that 15% of filers have miscalculated their 2008 recovery rebate credit.

What is the recovery rebate credit? In short, it is the amount the government owes you if either 1) you did not receive a stimulus check last year, or 2) you received less than what you should have received.

There are a few simple steps you can take to easily avoid miscalculating your rebate credit. First of all, do not put down the amount of the rebate you received on the recovery rebate credit line. You need to enter what you haven’t yet received. To find out what you’re owed, all you need to know is the amount you have received. If you don’t know this number, it’s best to check with the IRS by calling their Recovery Rebate Hotline at 1-866-234-2942.

If you’re using tax software to file your return, you can put in the amount of your stimulus rebate, and it will automatically calculate the difference, i.e. what you are owed. You’ll spend a lot more time if you try to calculate the number by hand or use the IRS worksheet (which is more than one page long) to calculate it.

If you want the IRS to calculate it for you, you can enter “RRC” next to the recovery rebate credit line. If you want nontaxable veterans’ disability or death benefits to be factored, also add “VA” next to the line. If you want nontaxable combat pay to be factored, also add “NCP” next to the line. (This information is taken from the IRS website.)

However, for the fastest calculations, and to expedite your tax refund, use tax software to automatically calculate your recovery rebate credit for 2008.

Jennifer Silva

ChooseWhat.com
Tax-Compare.com

Earlier today, at the GSMA Mobile World Congress 2009 in Barcelona, Skype announced its partnership with the world’s largest cell-phone maker, Nokia. It’s a marriage made in business technology heaven—for those who are able to purchase the phones.

Starting this June, Skype will be integrated into Nokia’s high-end N-series smartphones. According to CNET, Skype will allow phone users to import their Skype contacts into their phone address book and utilize Skype’s instant messaging client. But more importantly, users of the new phones will be able to make free and low-cost calls via their phone’s internet connection, or VoIP as it is now commonly called. VoIP has been lauded as cost-effective means to call internationally, as the rates are much less than they would be on traditional international phone plans. Hot on Nokia’s heels, Sony Ericsson has also announced plans to integrate Skype into their own line of smartphones.

Ready to get your hands on one of these phones? Not so fast. As of now, the phones will be primarily available outside of the U.S., where Nokia and Sony Ericsson have bigger pieces of the market. The reason? Domestically, where AT&T, Verizon, Sprint Nextel and T-Mobile are major players in the cellular phone market, there hasn’t been much enthusiasm for integrating VoIP services with phone plans—at least not from the service providers. The only provider who seems to be embracing VoIP (willingly or not) is Apple, whose iPhone App Store website now sells some non-Skype VoIP applications to iPhone users.

So, why should cell phone users here in the U.S. care about the Nokia-Skype partnership? Well, because sooner rather than later, cell phone users in the U.S. are going to be sitting around, fiddling with applications, wasting more time and money, while their European counterparts are saving a ton of money and time which will eventually be used in one way or another to figure out how to take over the American markets. And then we’ll all wish we had Skype to begin with. I admit I’m exaggerating a bit.

But, actually, if you read the comments posted on websites now, you’ll find statements like the following:

• “Skype need to be in iPhone” (from Berke.h)
• “After this announcement, I believe “official” Skype is a must on iPhone even i support this” (from friends_forlifetime)
• “Skype should replace the entire world’s phones. It may be a monopoly, but it’ll be better than our situation now, right?” (from JetStone)

While, I’m sure the majority of Americans would not be as disposed to the idea of a monopoly as the last commenter, I’m quite sure they’re just as peeved about the fact that we can’t find a way to work out the VoIP issues.

And what if the major U.S. phone companies aren’t willing to work it out? In that case, instead of “Have my people call your people,” let’s just say, “Have your VoIP people call our VoIP-less people.”

Jennifer Silva

ChooseWhat.com
PBXCompare.com

We get it, Costco—you’re not Walmart. But would it kill you to be more accessible to small businesses and individual consumers?

Actually, it’s the inaccessibility that’s killing you. Yesterday’s Barron’s Hot Research report (via wsj.com) lowered Costco sales and earnings expectations based on the latest decline in The Small Business Optimism Index, which is at the second-lowest point in the history of the survey. The report estimates that small businesses account for a quarter of Costco’s member base and up to 40% of the brand’s total sales. The numbers are expected to fall in the coming months, as businesses struggle to tighten budgets in order to brace the economic backsliding. (You know it’s bad when even bulk retail is too costly.)

So, no more revenue from small businesses to look forward to. But wait—there’s still individual consumers, right?

Aye, there’s the rub. A couple of months ago, NYT online published a very salient expose on what I like to call The Costco Conundrum. In essence, for some unknown reason, Costco refuses to accept food stamps. Yes, you heard me right. Costco doesn’t take food stamps. Trader Joe’s apparently takes them. Even Whole Foods takes them, because, as you may have heard, the economy sucks. Here’s a quote from Joel Berg, director of the New York City Coalition Against Hunger:

“It is inexplicable why Costco clings to a policy that is against both their public interest and the company’s own self-interest…More than one million New Yorkers a year use more than one billion dollars worth of food stamps benefits. I can’t understand why Costco is essentially placing a sign in their window that says ‘Your Business Not Wanted.’”

What’s also inexplicable to me is how the bulk retailer can let me walk in at 10 a.m. on a Saturday and get free post-hangover brunch, gorging myself on 40+ different samples of low-cost bread, cheeses, stuffed olives, cake slices and protein shakes, while simultaneously repudiating my currently unemployed, dear friend Adelle’s food stamps card. That’s “giving a man a fish”(read: handout) if I ever saw it. If I (and I’m speaking for quite a few people I’ve seen do this, here) walk into Costo intending to buy something, stuff myself with free food, and leave with an empty shopping cart, there’s no way it’s good for business.

But, hey, I’ll take what I can get. Maybe you should too, Costco. It’s a shame that people who already have a Costco card, like my friend, now have a reason to avoid using it. And it’s a shame that people who could potentially sign up for one probably never will. At least not in the foreseeable economically backsliding future.

Entrepreneurs, take note: You can take a risk and do something potentially good for your business, or you can maintain status quo for image’s sake. Entirely your call. But I am inclined to suggest the former over the latter.

Jennifer Silva
Zilker Ventures, LLC

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