Entrepreneurial

from Reuters Money:

1099 tax rule may bring big pain to small business

The new rules on 1099 forms, which were attached to the health care bill and are set to go into effect in 2012, call for all businesses, no matter how small, to file 1099 forms for goods as well as for services. That sounds like a technicality, but it’s got small business up in arms.

Here’s why it matters, and what you need to know.

rWhat exactly is the rule, anyway?

The new rule requires all business to file 1099 forms for goods as well as services, if those goods cost over $600 annually (the current threshold). It also gets rid of the distinction between corporations, which previously did not need to receive 1099s, and unincorporated entities, which did. The rule is slated to go into effect in 2012.

Who will it affect?

It will affect all businesses, including sole proprietors, consultants, self-employed people and freelancers, who are considered businesses for tax purposes, but may not think of themselves that way. It also will apply to charities and other tax-exempt organizations. The National Taxpayer Advocate, based on Internal Revenue Service data, figures that it will affect 26 million sole proprietorships, 4 million S corporations, 2 million C corporations, 3 million partnerships, 2 million farms, 1 million charities and other tax-exempt organizations, and likely more than 100,000 federal, state and local government entities. All told, that’s more than 38 million taxpayers and taxpaying entities.

What does it mean?

It means that you’d better be ready to track your spending by vendor, and have an easy way of tallying up whether that spending totals more than $600 per year. A business that spends $20 a week on pizza for its employees, for example, would spend a total of $1,040 a yea r— and would need to file a 1099 form to that local pizzeria.

The recordkeeping complexities are mindboggling, and there are still a lot of unanswered questions about how this new rule might be implemented. Internal Revenue Service Commissioner Douglas Shulman has said that the agency will look to exempt transactions done with credit or debit cards. While a credit-card exemption would provide significant relief to many small businesses, it could create its own recordkeeping issues (businesses would then need to distinguish between payments made by card and those done by cash or check to the same vendor) and it could also wind up unintentionally hurting businesses that do not accept credit cards.

from PopTech:

Does our economy make us happy?

FRANCE/

By Lisa Gansky

The opinions expressed are her own.

Does our economy make us happy?

The crash-and-burn of the financial system, a prolonged recession, and high unemployment obviously cause us enormous distress. We are forced to ask ourselves, “What can we afford now?”

The collapse has also made many of us rethink what we care about. We're finally asking, “Are all these things we’ve been buying (and probably still making payments on) truly making us happy?”

I started asking myself related questions long ago. Where do we look to derive value? What’s the source? As I talked with people, did research, and listened more intrusively to my own internal voice, I realized that in the process of choosing and buying we are actually being engulfed (essentially consumed), by the stuff in our lives.

from PopTech:

The future of microfinance?

The way Ben Lyon sees it, the finance world is in the middle of a revolution, and the simple text message is at the heart of it.

Lyon created a system to bring formal financial services to microfinance institutions and poor entrepreneurs via a mobile phone. He believes the new software, to be launched by the organization he founded, FrontlineSMS:Credit, could change the world of microfinance by changing the way the poor interact with the institutions.

The self-described “ideas man” will be among the first speakers at this week’s annual PopTech conference, held in Camden, Maine.

from Reuters Money:

Tax rule change causes big small-business ruckus

In the big tax fights of this year, the coming changes to who must get 1099 forms would hardly seem to rate. But for the vast majority of small businesses, these new rules will hit far harder than the estate tax, despite political posturing on that front.

USA-POLITICS/OBAMAThe new rules on 1099 forms, which were attached to the health care bill and are set to go into effect in 2012, call for all businesses, no matter how small, to file 1099 forms for goods as well as services, if those goods cost over $600 (the current threshold). It also gets rid of the distinction between corporations, which previously did not need to receive 1099s, and unincorporated entities, which did.

As someone who is considered a small business for tax purposes (as are all sole proprietors, consultants and self-employed people), I can't help but think what this might mean for me. If I buy a new laptop, I'd better get the taxpayer ID number for Apple or Lenovo (depending on if I go Mac or not) and send that form off to wherever their tax department is located. And if I think I might spend more than $600 on pens, notepads, paper and the like at Staples over the course of the year, well, I’d better get their taxpayer ID number, too, and send them a form.

New payroll app targets small business

Making payroll has always been a bit of a fraught experience for Shelley O’Sullivan and her husband at their five-employee construction firm located just north of San Francisco. But a simple mobile app has reduced that anxiety.

“The hassle we were always having with the computer issue is that we do payroll on Thursday and so we have to be home and input it by 3 o’clock to get the checks (out) by the next day,” said O’Sullivan, whose husband started using the iPhone app offered by their payroll service provider, ADP, a month ago. “Now that we have an app he’s out in the field and hits a button and boom, it’s done.”

O’Sullivan said the app is especially handy for their construction business, as they normally spend a lot of time outside the office on sites.

Will Momzelle appeal to nursing mothers?

Christine Poirier designed her own nursing top to help her feel less insecure about breastfeeding in public after the birth of her first child. Her invention turned into a business and now she faces the challenge of expanding her Toronto-based apparel company, Momzelle, into the U.S.

The target audience for Momzelle is straight forward: new breastfeeding, active, urban mothers (see original story here).

“They want to be able to go to restaurants, cafes, meet their friends outside in parks and just have a baby and have a life as well,” said Poirier, adding they’ve sold close to 10,000 shirts this year, which retail from C$45 to C$70.

Can VCs be value investors?

– Jeff Bussgang is a general partner at Flybridge Capital Partners and an Entrepreneur-in-Residence at Harvard Business School. He is also the author of “Mastering the VC Game”. This article originally appeared here. The views expressed are his own.  –

“Security Analysis” is cited by Warren Buffet as one of his top four favorite and most influential books. Written by Columbia University professors Benjamin Graham and David Dodd, it was first published in 1934.

The book is a thick tome that articulates the thesis of value investing – the analytical techniques for valuing securities and seeking to invest in those securities in the context of their underlying value. The latest printing, the sixth edition, contains a foreword from the Oracle of Omaha himself as well as a preface from hedge fund investor Seth Klarman of The Baupost Group, who is regarded by many to be one of the modern masters in the art of value investing.

Would you let a robot care for your mother?

Michelle Owusu is a contributor for Reuters.com

The idea of sticking their parents in a nursing home weighs heavily on many Baby Boomers. Martin Spencer has a solution: robots.

“Many people quit good paying jobs to keep their beloved mother or father out of the horrors of a nursing home,” said Spencer, who created the CareBot, a 4-foot, 100-pound, robot with a screen for a face and wheels for legs that reminds owners to take their medication.

If necessary, the CareBot calls emergency contacts and dials 911 and is fitted with a webcam to allow purchasers the ability to monitor and have video chats with their elderly relatives from anywhere.

Small business bill passes, now what?

As President Obama gets set to sign off on the $30-billion small business lending bill, people want to know one thing: how will it help me?

That’s what small business owners like Bruce Freeman want to know. Freeman, who runs Proline Communications, a marketing and consulting business in New Jersey and writes a syndicated column “Ask The Small Business Professor”, said the the $12 billion in tax breaks included in the bill will help, but the larger $30-billion portion earmarked for small community banks should instead be given directly to small businesses.

“Give it to me. Don’t give it to somebody else to then hopefully, maybe, get it to me,” said Freeman, who would prefer to get the money in the form of tax credits, or some other more direct assistance. “Give it to me in the form of beer bottles with the name of my business on it, but give it to me. This loan stuff is ridiculous, because I don’t know if I could ever get one.”

Is paint product a game changer?

IdeaPaint co-founder Jeff Avallon insisted his product has a real “wow factor” and that was supported by our experts, who felt the coating that turns any surface into a dry-erase whiteboard had great consumer upside.

The original concept for IdeaPaint was hatched nearly a decade ago by Avallon’s Babson College classmate John Goscha, who grew frustrated with the limitations of writing on large sheets of paper taped to walls in his dormitory (see original story here). Five years later, after a lengthy testing period and more than a few flops, a sellable product emerged and IdeaPaint was launched in 2008.

“It didn’t take us five years to develop a working product; it took us five years to develop a safe product,” said Avallon, who came onboard with co-founder Morgen Newman in 2006, shortly after Goscha – who has since left the company – had been told by a paint test lab his concept was impossible.

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