What makes an entrepreneur successful? Below are several traits of a successful entrepreneur. The daily pressure of running your own business combined with entrepreneur personality traits may make starting a business move to the end of your priorities.
1. Entrepreneurs are risk takers. Running a business is demanding. Doing everything on your own is risky since you have no one to depend upon but yourself. You as a business owner must learn to take calculated risks. In other words, you must be more willing to take reasonable risks with caution.
2. You must have the ability to recognize good business ideas. Can you identify a good business idea if you see one? Identifying the idea is very important in becoming an entrepreneur even if someone else is already doing it. Fast food entrepreneurs are a good example. If one fast food owner discovers a good sandwich such as the Egg McMuffin, other owners will virtually copy the idea but change it for the better (at least in some of the eyes of the public).
3. You will need confidence and determination. You've got to believe in yourself. You have no one else to help you. You can't believe in yourself one day and not believe in yourself on other days. You will need determination. Do it! Do it! Do it!
4. You must be focused. To be an entrepreneur, you must have your mind only on your business. Your life is your business. Don't let family, friends or other wants and desires interrupt you. Do your thing and nothing else. Close your eyes to the rest of the world. Your business is your world. One of my entrepreneurial banking customers told me that she had just returned from Europe. I asked her if it was business or pleasure. She answered, "Business is my pleasure."
5. You will need to put whatever effort is necessary. This may mean working long hours. You will have no one else to depend on. Whatever is required is the effort that is needed to achieve success. You can't depend on others to make you successful. You're it.
The personality traits that you must have are the same traits that make people want to work for themselves. They prefer not to have a boss. In running your own business, you are the boss.
Nothing is certain, except death and taxes. Even if you have all of the traits above, you probably have what it takes to be an entrepreneur. Remember being an entrepreneur is risky. Perhaps you have just a few of these traits, you may want to take a calculated risk and start your own business. However, if you don't have any of this traits, I suggest you work for someone else.
Wednesday, April 23, 2008
Saturday, April 19, 2008
What is Self-Employment Tax?
Self-employment tax (SE tax) is a social security and Medicare tax primarily for individuals who work for themselves. It is similar to the social security and Medicare taxes withheld from the pay of most wage earners.
You figure SE tax yourself using Schedule SE (Form 1040). Social security and Medicare taxes of most wage earners are figured by their employers. Also you can deduct half of your SE tax in figuring your adjusted gross income. Wage earners cannot deduct social security and Medicare taxes.
SE tax rate. The self-employment tax rate is 15.3%. The rate consists of two parts: 12.4% for social security (old-age, survivors, and disability insurance) and 2.9% for Medicare (hospital insurance).
You figure SE tax yourself using Schedule SE (Form 1040). Social security and Medicare taxes of most wage earners are figured by their employers. Also you can deduct half of your SE tax in figuring your adjusted gross income. Wage earners cannot deduct social security and Medicare taxes.
SE tax rate. The self-employment tax rate is 15.3%. The rate consists of two parts: 12.4% for social security (old-age, survivors, and disability insurance) and 2.9% for Medicare (hospital insurance).
Sunday, April 13, 2008
Not Ready to File? What to Do.
If you are not quite ready to file your return, use the following suggestions by the Internal Revenue Service to avoid extra charges.
Request an Extension of Time to File
Taxpayers who can't meet the deadline to file their tax return can get an automatic six-month extension of time to file from the IRS, but they must submit the request by April 15. The extension gives taxpayers until Oct. 15 to file the tax return. However, an extension of time to file does not give the taxpayer an extension of time to pay, which must be separately requested. Those who owe taxes can make a payment when they file the extension either by mailing a check made out to the U.S. Department of the Treasury or by several electronic payment methods, such as electronic funds withdrawals from bank accounts and credit card payments. Taxpayers can get an automatic six-month extension of time to file their tax returns by filing Form 4868, Automatic Extension of Time to File. Taxpayers can e-file the extension request from a home computer or through a tax professional who uses e-file. Taxpayers can e-file their extensions at no cost. Several companies offer free e-filing of extensions through the Free File Alliance; these companies are listed on IRS.gov.
Request an Extension of Time to Pay
Based on the circumstances, a taxpayer could qualify for an extension of time to pay. The IRS is willing to allow extensions of time to pay in order to assist in tax debt repayment. However, interest and certain penalties may apply. A taxpayer can request an extension from 30 to 120 days depending on the specific situation. Taxpayers qualifying for an extension of time to pay of 30 to 120 days generally will pay less in penalties and interest than if the debt were repaid through an installment agreement. Taxpayers can request an extension of time to pay using the Online Payment Agreement option available. If you owe tax but cannot pay the full amount, you should pay as much as you can by the April 15 due date in order to minimize any interest and penalty charges.
Apply for an Installment Agreement
The IRS may allow taxpayers to pay any remaining balance in monthly installments through an installment agreement. Taxpayers who owe $25,000 or less may apply for a payment plan electronically, using the Online Payment Agreement application. Alternatively, taxpayers may attach a Form 9465, Installment Agreement Request, to the front of his or her tax return. Taxpayers must show the amount of their proposed monthly payment and the date they wish to make their payment each month. The IRS charges a $105 fee for setting up an installment agreement. The fee is reduced to $52 for those who establish a direct debit installment agreement and $43 for those with an income below a certain level (more information is available on Form 13844). Taxpayers are required to pay interest plus a late payment penalty on the unpaid taxes for each month, or part of a month, after the due date that the tax is not paid. A taxpayer who does not file the return by the due date — including extensions — may have to pay a failure-to-file penalty.
For more information about filing and paying taxes, choose “1040 Central” or refer to the Form 1040 instructions or IRS Publication 17, Your Federal Income Tax. Taxpayers can download forms and publications from the official IRS Web site, IRS.gov or request a free copy by calling toll free 800-TAX-FORM (800-829-3676).
Request an Extension of Time to File
Taxpayers who can't meet the deadline to file their tax return can get an automatic six-month extension of time to file from the IRS, but they must submit the request by April 15. The extension gives taxpayers until Oct. 15 to file the tax return. However, an extension of time to file does not give the taxpayer an extension of time to pay, which must be separately requested. Those who owe taxes can make a payment when they file the extension either by mailing a check made out to the U.S. Department of the Treasury or by several electronic payment methods, such as electronic funds withdrawals from bank accounts and credit card payments. Taxpayers can get an automatic six-month extension of time to file their tax returns by filing Form 4868, Automatic Extension of Time to File. Taxpayers can e-file the extension request from a home computer or through a tax professional who uses e-file. Taxpayers can e-file their extensions at no cost. Several companies offer free e-filing of extensions through the Free File Alliance; these companies are listed on IRS.gov.
Request an Extension of Time to Pay
Based on the circumstances, a taxpayer could qualify for an extension of time to pay. The IRS is willing to allow extensions of time to pay in order to assist in tax debt repayment. However, interest and certain penalties may apply. A taxpayer can request an extension from 30 to 120 days depending on the specific situation. Taxpayers qualifying for an extension of time to pay of 30 to 120 days generally will pay less in penalties and interest than if the debt were repaid through an installment agreement. Taxpayers can request an extension of time to pay using the Online Payment Agreement option available. If you owe tax but cannot pay the full amount, you should pay as much as you can by the April 15 due date in order to minimize any interest and penalty charges.
Apply for an Installment Agreement
The IRS may allow taxpayers to pay any remaining balance in monthly installments through an installment agreement. Taxpayers who owe $25,000 or less may apply for a payment plan electronically, using the Online Payment Agreement application. Alternatively, taxpayers may attach a Form 9465, Installment Agreement Request, to the front of his or her tax return. Taxpayers must show the amount of their proposed monthly payment and the date they wish to make their payment each month. The IRS charges a $105 fee for setting up an installment agreement. The fee is reduced to $52 for those who establish a direct debit installment agreement and $43 for those with an income below a certain level (more information is available on Form 13844). Taxpayers are required to pay interest plus a late payment penalty on the unpaid taxes for each month, or part of a month, after the due date that the tax is not paid. A taxpayer who does not file the return by the due date — including extensions — may have to pay a failure-to-file penalty.
For more information about filing and paying taxes, choose “1040 Central” or refer to the Form 1040 instructions or IRS Publication 17, Your Federal Income Tax. Taxpayers can download forms and publications from the official IRS Web site, IRS.gov or request a free copy by calling toll free 800-TAX-FORM (800-829-3676).
Wednesday, April 09, 2008
Amending Your Tax Return
Issue Number: TT-2008-71
Oops! You’ve discovered an error after your tax return has been filed or maybe you need to adjust your 2007 return to include certain non-taxable benefits to reach the $3000 qualifying income level to qualify for an economic stimulus payment. What should you do? You may need to amend your return.
(Note: Generally, the payment of economic stimulus payments is based on the information from your original 2007 federal tax return. However, the only item on an amended return that will affect the economic stimulus payment is when including certain non-taxable benefits not included on the original return. This must be the only reason you were not eligible for the economic stimulus payment on the original return.)
The IRS usually corrects math errors or requests missing forms – such as W-2s or schedules – when processing an original return. In these instances, do not amend your return. However, you should file an amended return if any of the following were reported incorrectly:
The Form 1040X has three columns. Column A is used to show original or adjusted figures from the original return. Column C is used to show the corrected figures. The difference between the figures in Columns A and C is shown in Column B. There is an area on the back of the form where you explain the specific changes being made on the return and the reason for each change.
If the changes involve another schedule or form, attach it to the 1040X. For example, if you are filing a 1040X because you have a qualifying child and now want to claim the Earned Income Credit, you must attach a Form 1040 Schedule EIC to show the qualifying person's name, year of birth and Social Security number.
If you are filing to claim an additional refund, wait until you have received your original refund before filing Form 1040X. You may cash that check while waiting for any additional refund. If you owe additional tax for 2007, you should file Form 1040X and pay the tax by the April due date to avoid any penalty and interest.
Generally, you must file Form 1040X within three years from the date you filed your original return or within two years from the date you paid the tax, whichever is later, to claim a refund.
Form 1040X and instructions are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).
Remember that for the genuine IRS Web site be sure to use .gov. Don't be confused by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is www.irs.gov.
Links:
Oops! You’ve discovered an error after your tax return has been filed or maybe you need to adjust your 2007 return to include certain non-taxable benefits to reach the $3000 qualifying income level to qualify for an economic stimulus payment. What should you do? You may need to amend your return.
(Note: Generally, the payment of economic stimulus payments is based on the information from your original 2007 federal tax return. However, the only item on an amended return that will affect the economic stimulus payment is when including certain non-taxable benefits not included on the original return. This must be the only reason you were not eligible for the economic stimulus payment on the original return.)
The IRS usually corrects math errors or requests missing forms – such as W-2s or schedules – when processing an original return. In these instances, do not amend your return. However, you should file an amended return if any of the following were reported incorrectly:
• Your filing statusUse Form 1040X, Amended U.S. Individual Income Tax Return, to correct a previously filed Form 1040, 1040A, 1040EZ or electronically-filed return. Be sure to enter the year of the return you are amending at the top of Form 1040X. If you are amending more than one tax return, prepare a 1040X for each return and mail them in separate envelopes to the IRS processing center for the area in which you live. The 1040X instructions list the addresses for the centers.
• Your dependents
• Your total income
• Your deductions or credits
The Form 1040X has three columns. Column A is used to show original or adjusted figures from the original return. Column C is used to show the corrected figures. The difference between the figures in Columns A and C is shown in Column B. There is an area on the back of the form where you explain the specific changes being made on the return and the reason for each change.
If the changes involve another schedule or form, attach it to the 1040X. For example, if you are filing a 1040X because you have a qualifying child and now want to claim the Earned Income Credit, you must attach a Form 1040 Schedule EIC to show the qualifying person's name, year of birth and Social Security number.
If you are filing to claim an additional refund, wait until you have received your original refund before filing Form 1040X. You may cash that check while waiting for any additional refund. If you owe additional tax for 2007, you should file Form 1040X and pay the tax by the April due date to avoid any penalty and interest.
Generally, you must file Form 1040X within three years from the date you filed your original return or within two years from the date you paid the tax, whichever is later, to claim a refund.
Form 1040X and instructions are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).
Remember that for the genuine IRS Web site be sure to use .gov. Don't be confused by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is www.irs.gov.
Links:
• Frequently Asked Questions: Amended Returns & Form 1040X
• Form 1040X, Amended U.S. Individual Income Tax Return (PDF 110K)
• Form 1040X Instructions (PDF 45K)
• Tax Topic 308 — Amended Returns
Monday, April 07, 2008
Need More Time To File?
Issue Number: TT-2008-69
If you can't meet the April filing deadline to file your tax return, you can get an automatic six month extension of time to file from the IRS.
Here are some things to remember about filing extensions:
If your return is completed but you are unable to pay the full amount of tax due, do not request an extension. File your return on time and pay as much as you can. The IRS will send you a bill or notice for the balance due. To apply online for a payment agreement, go to IRS.gov, use the pull-down menu under “I need to …” and select “Set Up a Payment Plan.”
To obtain a copy of Form 4868 or other forms and publications use E-file tax preparation software, download them from IRS.gov or visit your local IRS office. Note that forms and publications can be ordered by calling 800-TAX-Form (800-829-3676). However, telephone requests normally take 10 days to fill and may not arrive before the tax deadline of April 15.
Remember that for the genuine IRS Web site be sure to use .gov. Don't be confused by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is www.irs.gov.
Links:
If you can't meet the April filing deadline to file your tax return, you can get an automatic six month extension of time to file from the IRS.
Here are some things to remember about filing extensions:
• File Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, with the IRS by the April deadline, or make an extension-related electronic credit card payment.If you ask for an extension via computer, you can also choose to pay any expected balance due by authorizing an electronic funds withdrawal from a checking or savings account. You will need the appropriate bank routing and account numbers and must also have available the adjusted gross income from your 2006 federal income tax return to verify your identity. For information on these and other methods of payment, visit the IRS.gov Web site or call 800-TAX-1040 (800-829-1040).
• The extension will give you extra time to get your paperwork to the IRS, but it does not extend the time you have to pay any tax due.
• You will owe interest on any amounts not paid by the April deadline, plus a late payment penalty if you have paid less than 90 percent of your total tax by that date.
• You can e-file an extension request using tax preparation software on your own computer or by going to a tax preparer that has the software. The IRS will acknowledge receipt of the extension request if you file by computer.
• You can use Free File to file for an extension. Many private-sector companies in the IRS Free File Alliance offer extensions for no charge. You can access Free File via the IRS Web site at IRS.gov. Taxpayers with adjusted gross incomes of $54,000 or less may file their 2007 Federal Income Tax Returns electronically through Free File.
If your return is completed but you are unable to pay the full amount of tax due, do not request an extension. File your return on time and pay as much as you can. The IRS will send you a bill or notice for the balance due. To apply online for a payment agreement, go to IRS.gov, use the pull-down menu under “I need to …” and select “Set Up a Payment Plan.”
To obtain a copy of Form 4868 or other forms and publications use E-file tax preparation software, download them from IRS.gov or visit your local IRS office. Note that forms and publications can be ordered by calling 800-TAX-Form (800-829-3676). However, telephone requests normally take 10 days to fill and may not arrive before the tax deadline of April 15.
Remember that for the genuine IRS Web site be sure to use .gov. Don't be confused by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is www.irs.gov.
Links:
• Form 4868, Application for Extension of Time to File U.S. Individual Income Tax Return (PDF 50K)
• Form 9465, Installment Agreement Request (PDF 100K)
• Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad (PDF 348K)
• Publication 3, Armed Forces' Tax Guide (PDF 206K)
• Official Payments Corporation
• Link2 Gov Corporation
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