Detail –

IRS Notice 2018-99 provides guidance for determining the nondeductible amount of parking expense, if your organization is a for-profit company, as well as the amount that would increase Unrelated Business Taxable Income (UBTI), if your organization if a non-profit. The appropriate method depends on whether the organization pays a third party for employee parking or if the organization owns or leases a parking facility where its employees park. If an organization pays a third party for employee parking in the third party’s parking lot or garage, the Section 274(a)(4) disallowance (foregone tax deduction for a for-profit company or amount required to be
added to Form 990T as UBTI for a non-profit) generally is calculated as the organization’s total annual cost of the employee parking paid to the third party up to $265 ($260 for 2018) per month per employee. If parking expenses amount to more than $265 per month per employee ($260 for 2018), the excess needs to be included in the employees’ income and would deductible as wages if a for-profit organization. If an organization is a nonprofit organization, then excess would be added to employees’ wages but would not be added to Form 990-T as UBTI. If an organization owns or leases all or a portion of a parking facility for its employees, IRS Notice 2018- 99 proposes a four-step method to determine the amount of UBTI. This may be used as a safe harbor until final guidance is issued.

There have been so far unsuccessful efforts to repeal this. We are following the IRS updates very closely and will keep you posted with more information as it becomes available. Please reach out to us with any questions you may have.

NOTE: Every situation is different and federal and state tax laws are subject to change.  This article is presented exclusively for informational purposes and is not intended to substitute for obtaining tax or financial advice from a tax or other business professional. Names may have been changed for illustration purposes.

Here are the steps and links to forming a new (for-profit) business. We strongly advise you contact an advisor (an accountant or lawyer) to help you with the decisions and implementation.

1. 1. Decide on your legal structure – Corporation? LLC? Partnership?

1. 1. Decide on your tax structure – S Corporation? LLC taxed as a partnership? As a corporation?  (Many options – can be confusing.)

1. 1. Execute a partners or shareholders’ agreement if it is a multi-owner enterprise.

1. 1. Choose a name and see if it is available.

1. 1. File either Articles of Organization or Incorporation and pay the requisite fee.  

1. 1. Optional: File a Fictitious Name Statement if you wish to use a D/B/A.

1. 1. Obtain your EIN – Employer Identification Number.

1. 1. If you qualify and are choosing to be an S-Corp, file IRS Form 2553.

1. 1. Open a bank account for the business.

1. 1. If you are going to have employees, arrange with a payroll service or qualified bookkeeper to pay employees and pay and file payroll taxes.

1. 1. If you make sales at retail, register for sales tax – even if your sales may be exempt.

1. 1. Arrange for a bookkeeper or bookkeeping system.

1. 1. Obtain necessary insurance coverage.

1. 1. Obtain on-line credentials so you can file your annual report on-line, as well as other forms.

1. Annually file your annual report with the Secretary of State and pay the $50 fee – failure to do so can result in revocation of your charter; annually file your state tax return with the requisite minimum tax of $500 ($450 effective for tax years beginning 1/1/16).

Here then is a brief set of links to get you started with registration in New England, New York and California.  We will be expanding the list of states – and links to more details within those states – as we move forward.

Thank you to Somerville, Mass  jeweler extraordinaire Karen Christians who urged me to develop this list and has posted it on her wonderful website.

Being creative.
This is my favorite state of mind, and probably one of the bigger reasons I have my own business. As a creative person working for myself, I’ve experienced more than a few moments when stuff gets… chaotic. Can you relate?

“I’m an entrepreneur, I’m wearing many hats!”

“I’m sleeping less than a mom to a colicky baby!”  

“I’m living in constant chaos!” (sometimes followed by a defensive  “and loving every moment!.  But I’ve yet to meet a person who enjoys living in constant chaos.)

At a certain point you realize that in order to survive, a.k.a. keep both your business and your sanity, you have to outsource and to automate.  Outsourcing is a huge topic for another time. Let’s talk about automation: what, why and how.

There are a myriad of different aspects you could automate in your business. What should you focus on first and why? Here are three absolute essentials to put on autopilot AS SOON AS YOU CAN. Preferably, before the next client comes in the door.

Money and everything related to it: every order, every invoice, every, even the tiniest, expense. Pricing estimates, quotes, EVERYTHING you possibly can.
When it comes to money, “human error” mistakes are frequent and costly. Forgetting to invoice a client is no fun. Forgetting to pay a vendor could result in a late fee.

On the other hand, an automated system that lets you plug in your prices, and number of clients, then spits out your profits and your hours is invaluable. It helps your decide how much to charge, how many clients you can take on, how many hours to invest in where, and so on. Without doing complex math every time.  

There are countless tools for automating your finances – I like Excel for flexibility and infinite possibilities for customization. Mint.com or DaveRamsey.com provide good online budgeting tools.

Whatever you choose, make sure you’re comfortable with the interface..

Otherwise you’ll start hating the tool and the money-managing process very soon. Instead of saving you time, headache and mistakes, the “automation” will make you procrastinate to the point of avoidance. You don’t want to avoid dealing with money. So choose the tool you like, even if it takes some trial and error.

Email: the amount of time it saves is just mind-boggling.

Then Inbox bloats to a 3-digit number (or 4 or 5, but shhhh…), the consequences are painful. We are getting distracted from our core work. We miss truly important information in the bottomless “Unreads.” We waste hours and hours checking email instead of prioritizing what to check when. Our focus slips, and the quality of our work suffers.

Folders and labels are great, scheduling emails in and out is awesome, but the key? Make sure only the email that requires action on your part inhabits your Inbox.  Messages containing client requests, invoices, interview offerings, and “I’m in labor!” cries from your significant other – stuff like that.  Not a newsletter from Carnival Cruises – that can skip your Inbox and go straight to the “one day maybe” folder

Only email that requires action on your part should inhabit your Inbox.

All the other messages should skip your Inbox and go directly into their designated folder, to be checked at a designated time (or never), without grabbing your attention.

How to make sure that you’d actually check these non-urgent emails? Simple: put reminders. There are two ways to do it:

1. Designate 30 minutes a couple of times a week for “non-urgent” email-checking, put it on your calendar and let the calendar remind you to do it. It works especially well with the electronic kind – Google, iCal, Outlook, and the like.

1. “Snooze” the emails you don’t want to deal with immediately:  the message will re-appear in your Inbox when you can do something about it. Later today, or next week, or in a month – you decide. Some email software has this feature built-in, but frankly, it’s easier to install an app that works with your email to do that. Some of my favorites: RiteInbox or Boomerang, if you use Gmail, Mailbox to connect Gmail with iPhone (my personal life-saver) and SaneBox for anything and everything.

Another important rule – once you’re done with a message, archive it. Don’t leave it to sit and pollute your Inbox. Bottom line: Inbox with 4576 emails is a black hole. Inbox with 8 emails is a to-do list.

Delegation Whether you’re a solo-preneur, or a part of a team and therefore consider yourself at the bottom of the food chain, you can’t do everything that life throws at you. Some stuff has to be done by other people whether they report to you, collaborate with you on a task, supply your raw materials, or write your copy.

So … “Autopilot your delegation?” You mean “sending soulless robotic instructions to your team at pre-set intervals”?  Nope. I mean setting clear expectations, especially for stuff that has to happen every day/week/month.  “Automated delegation” means having a feedback loop, with clear checklists that address the big three: what’s done, what’s wrong, what’s next. Surprisingly, it also means greater respect from your staff, or your co-workers, or your contractors.

Time and a small amount of money you invest in automation will pay for itself very, VERY quickly. You’ll have more time to create money, and you’ll plug the leaks in your business that are costing you money now. This is obviously great. What I find even greater is the mental space, the inspired energy that is suddenly freed up when the overwhelm subsides, stuff gets done, and I am free to create.

Marina Darlow is the founder of VisionFramework a company that builds small, purpose-driven businesses and non-profits from the inside, helping entrepreneurs run their companies with ease, putting effective, easy-to-use, and fun (yep!) systems in place.

Q: “Why did the State revoke my charter? #$???!!
–Cursed in Cranston (Rhode Island)
A: Incorporation and organization (the rough equivalent of incorporation for LLC’s)  are established under the auspices of state government.

As such, your entities must generally file reports and pay fees, usually annually and to the Secretary of (your) State, to remain in “good standing.” The renewal forms are generally easy — we are not talking a tax return here — and the fees can be less than $100. Often you can do the transaction on-line.

Failure to renew can result in the revocation of your corporate charter — in other words, your entity is no longer legit in the eyes of the law and you have forfeited your legal shield.

(Yes, my firm can help you incorporate. And  to make sure you “incorporate right”, click here. )

Q: They didn’t tell me!
–Furious in Philly
A: I’m skeptical.  States are required to notify you. (Renewal dates vary — in Rhode Island for instance,  non-profits  renew in June, LLC’s in September and October, and corporations in January and February.)

Notifications are sent to whomever you designated as the “resident agent” (or equivalent title) when you first registered. That could be your lawyer if your lawyer is handling the renewals, or it could be you.  Did you move and not notify the state? (There are appropriate forms.) Or was it the original founder, who long ago sped away? Or are you a non-profit and the original board resigned in a food fight two years ago and no one remembers?

Doesn’t matter! It’s your responsibility — as the executive director or board chair. And it’s easy to check — most states have a “corporate database” that is online and publicly available. You can find out the current status and view current filings. Sometimes I am the one to tell the client — “you’ve been revoked!” Why don’t you check right now? Click here for Rhode Island and here for Mass.

Q: I can always reinstate — right?
–Ridiculous in Revere
A: Oftentimes yes,  but this is not a great way to operate. (I have one client for whom this is an annual exercise.) For one thing, you lose the corporate legal protections in the interim. And then there is the time and the expense — you are at the whim of the state, which then also has the right to demand that all your obligations be made current before they reinstate you — so if you are behind on corporate tax returns or even sales tax returns — watch out.

COMING EVENT!

Eager to set your business up right? Come to my free presentation, “Structuring Your Self-Employment for Success”, at Rochambeau Library in Providence on September 16. Details here. Open to (members and) non-members of the Providence Entrepreneurs Meetup Group, the kind sponsor.

BECAUSE YOU ASKED

Back in 1975 I  co-authored a “landmark tenant research report” about a notorious Boston landlord, Maurice Gordon. It was a muckraking adventure and ran nearly 180 pages. Gordon was most infamous for a 1971 fire in Boston’s Fenway district.  Eight people died in a building lacking fire extinguishers and with bags of rubbish in the hall. Maurice, alas, was Jewish and there were protests at his synagogue.

The accompanying cartoon, from the Boston Phoenix, part of a collage in the book, is a commentary on Gordon’s close  ties to then Boston Mayor Kevin White, in the top hat.

My elaborately detailed report, with news clippings and flowcharts of connections, was summarized and reprinted in a series in a local newspaper. See below.

I totally loved the project, which I also managed to use as credit for two college courses at Boston University.

Because you asked. And by all means, keep asking.

I’ve done over thirty issues of Enlightened Accounting, covering an array of topics. I thought it might be useful to highlight some of the topics I’ve addressed and link them to the appropriate articles.

MARRIAGE AND DIVORCE

Spousal Protection Programs
Did you lose your refund because of Charles’ student loans? There may be hope.

Tax Tips for Divorcing Couples
The divorce agreement is not sacrosanct if there is a custody dispute.

How to Dissolve your Marriage, not your Financial Security
Does your ex-have life insurance? What will substitute for child support if he goes sky diving and it doesn’t work out?

STARTING A BUSINESS

Don’t Flub your Business Structure
S-Corp, C-Corp, LLC…– How to Choose?

Avoiding Business Missteps with Friends
Going into business together can enhance or destroy your relationships.

Business Basics Webinar (with Rich)
My video on the subject.

KIDS, PARENTS, RETIREMENT

Leverage your Child
Did you know there were tax breaks for summer camp?

Back to School Edition
How do I fund both retirement and college?

Retirement Carpentry
Getting started, even with a little.

Student Loans
Options and resources amid the morass.

TAXES

Is Sex Therapy Tax Deductible?
The Medical Deductions Quiz.

Fashion, Charity and Death
Your Tax Questions Answered

The Hazards of Late Filing
I filed an extension, and still got charged interest and penalties. Why?

TONGUE IN CHEEK (AND EDUCATIONAL)

Making a Living as an Artist
Interviews with Picasso, Beethoven and Dostoyevsky

Keeping Records
Interviews with Madoff, Ponzi, Cianci

MISCELLANEOUS

Best Practices for Non-Profits

Embezzlement Made Easy

BECAUSE YOU ASKED

A poem by my 14 year old son, Malcolm, originally performed at Everett’s “Open Stage” in Providence:

Ode to My Imagination

My head is like the workshop of a Victorian watchmaker.

Unwanted ideas are thrown outside, lost forever and never to return. Gears are constantly turning. They produce new inventions by joining together memories and thoughts.

Their similarities make them link together, like several clockwork pieces moving.  Every new world forms a book filled with maps, legends and strange creatures.

Sometimes I sit in an old rocking chair and listen to the crackling furnace as I read peacefully.

And as I read, I fall asleep while the drawings walk off the pages and the words turn into objects, made of pale black ink. When I wake,the workshop is gone.

And as I walk, the workshop is filled with color and springs to life before my very eyes. Creatures gather around me, as I am their creator and they love me, not as a master, but as a friend.

Eventually I come across that same rocking chair and I sit down and drift off to sleep, my hand resting on the head of a beast.

Then I awake to the crackle of the furnace, as animals become drawings and objects turn back to words.

Because you asked. And by all means, keep asking.

From a presentation at Social Enterprise Greenhouse

Click to view slideshow.