Understanding the Gift Tax

 Understanding the Gift Tax

If you gave money or property to someone as a gift, you might owe federal gift tax. Many gifts are not subject to the gift tax, but there are exceptions. Here are eight tips you can use to figure out whether your gift is taxable.
1. Most gifts are not subject to the gift tax. For example, there is usually no tax if you make a gift to your spouse or to a charity. If you make a gift to someone else, the gift tax usually does not apply until the value of the gifts you give that person exceeds the annual exclusion for the year. For 2018 the annual exclusion is $15,000 (up from $14,000 in 2017).

2. Gift tax returns do not need to be filed unless you give someone, other than your spouse, money or property worth more than the annual exclusion for that year.

3. Generally, the person who receives your gift will not have to pay any federal gift tax because of it. Also, that person will not have to pay income tax on the value of the gift received.

4. Making a gift does not ordinarily affect your federal income tax. You cannot deduct the value of gifts you make (other than deductible charitable contributions).

5. The general rule is that any gift is a taxable gift. However, there are many exceptions to this rule. The following gifts are not taxable gifts:

• Gifts that are do not exceed the annual exclusion for the calendar year,
• Tuition or medical expenses you pay directly to a medical or educational institution for someone,
• Gifts to your spouse,
• Gifts to a political organization for its use, and
• Gifts to charities.

6. You and your spouse can make a gift up to $30,000 to a third party without making a taxable gift. The gift can be considered as made one-half by you and one-half by your spouse. If you split a gift you made, you must file a gift tax return to show that you and your spouse agree to use gift splitting. You must file a Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, even if half of the split gift is less than the annual exclusion.

7. You must file a gift tax return on Form 709 if any of the following apply:

• You gave gifts to at least one person (other than your spouse) that are more than the annual exclusion for the year.
• You and your spouse are splitting a gift.
• You gave someone (other than your spouse) a gift of a future interest that he or she cannot actually possess, enjoy, or receive income from until some time in the future.
• You gave your spouse an interest in property that will terminate due to a future event.

8. You do not have to file a gift tax return to report gifts to political organizations and gifts made by paying someone's tuition or medical expenses.

Questions about the gift tax? Don't hesitate to call 855-682-9489.

How to Promote Your Online Business In-Person: Pop-Up on Small Business Saturday^®

By Taylor Combs, Staff Editor, Etsy, Inc.

Etsy shares tips for how online-based small business owners can work with fellow makers or businesses in their local communities to help extend their brand with a pop-up presence and connect with customers in real life, especially on Small Business Saturday.

During the holiday season, shoppers are looking for thoughtful gifts that will make them feel like the best gift-giver on the block. In search of that something unique, they often turn to small and local makers and creative boutiques for a gift that has that "you can only find this here" vibe. Whether you run your business on your own website or sell through a marketplace like Etsy, planning a pop-up shop lets you plug into your local community and connect directly with potential new customers. When you showcase your items in a temporary physical space, you can introduce your brand to a new audience and offer a more tactile and personal experience that can help entice customers to keep shopping with you after the holidays have ended.

Small retailers may want to plan their pop-up presence or event to coincide with Small Business Saturday, an annual shopping holiday tradition celebrated on the Saturday after Thanksgiving. It’s when millions of shoppers across the country wake up from their turkey hangovers and go out to Shop Small® and support small businesses in their communities.

There are lots of ways you can get out of your workspace and into your local community this Small Business Saturday. Here are a few ideas:

1. Host a trunk show at a local business

Trunk shows are intimate events hosted by local boutiques. Reach out to shop owners in your local community to see if you could pop-up in their space for a weekend event. Gift boutiques and clothing stores often host trunk shows, but think creatively—maybe you could sell your handmade mugs at your local coffee shop or products featuring literary quotes at your local library. Bring a selection of your top-selling items and a can-do attitude. Trunk shows are a great way to meet potential customers face-to-face, answer questions about your products and processes, and get feedback on your items. As an online retailer, you’re familiar with the challenges of selling items a shopper can’t touch or smell. A trunk show gives shoppers an opportunity to get hands-on with your items.

2. Partner with a holiday festival

During the holidays, many communities host festive seasonal events. Reach out to the organizers of your local outdoor ice skating rink or Christmas tree lot to see if you might be able to sell your items at their events. Locally made goods can add a unique touch to any event—when you reach out, be sure to mention any region-specific materials you use or special details of your products that make them unique to your city.

3. Takeover a store window

Many makers produce their handmade wares with the help of a local maker space such as a pottery studio or photography dark room. Build on the relationships you already have with these spaces for a holiday window display. Use your creativity to design a holiday window scape that gives the storefront a festive feel and ask if you can incorporate some of the products you make at their space.

4. Organize your own pop-up shop

Pop-up shops are temporary boutiques that appear in under-used spaces. Explore neighborhoods with a lot of pedestrian traffic and look for vacant storefronts—an eager landlord might be willing to let you rent the space for a short-term event. When you work together with your local community, you can expand the reach of your pop-up and give your shop’s inventory more variety. Curate a selection of products that will complement your items and tailor the selection to the area your pop-up will be located in—a street filled with boutique shops will attract a different audience than the coffee shop near your local college campus.

If these ideas have inspired you to plan an in-person event for Small Business Saturday, consider becoming a Neighborhood Champion and get access to more tips and resources to help your event come together, courtesy of American Express. Apply by November 6 at ShopSmall.com/Rally. Terms of participation apply.

Ready to start your own Etsy business? Share your passion with the world. Gain access to millions of potential customers. Start selling today. Learn how to open an Etsy shop.

Doing Business with New York City

Doing Business with New York City

By Charles Tabasso

New York may be a city of 8 million stories, but at its core is a story of universal success. Because here in the city that never sleeps the hustle never stops.

It’s easy enough to see for yourself: if you can catch a New Yorker at the right moment, there’ll be that same twinkle in their eyes that lights up the skyline from the New Jersey Turnpike.
This city is the leading purveyor of office space for Fortune 500 companies. It’s also the home of the nation’s publishing industry, financial markets, and media groups. Over 2 million New Yorkers use the subway every day just to commute to work. And another million or so hitch a ride to the many landmarks and neighborhoods, which attract tourists all year round.

New York may be home to a booming economy that ranks 5th as the most entrepreneurial in the world, but all this success is reflective of the city’s foundations—its diverse and thriving businesses.
By no coincidence, New York City is also one of the largest contracting jurisdictions in the nation. Each year the city spends over $20 billion in contracting dollars on small businesses. This opens up a potential goldmine—but only if you know the ins and outs of doing business directly with the city.
But to be hip with all things NYC, you’ll need a Payee Information Portal (PIP) account for starters. The City’s Payee Information Portal is an integral tool, used in various stages of the procurement/contracting process. This will be where business owners will be able to manage their contracts, view invoices and ultimately collect payments, just to name a few of its uses.

Registering a PIP account requires general information on your company, including your business name, its tax identification number, and contact information. You will also be required to select the particular commodity codes which reflect whatever goods or services your business provides. The commodity code listing can be found here.

With your PIP account accepted and verified, you’ll want to start looking for contracting opportunities with the City Record. This website publishes announcements, solicitations, contract awards and notices for public hearings. Although it is a subscription-based platform, it’s the most common means of finding contracting opportunities for your business—but there are free options as well.

PIP would be the most useful alternative. Once your account has been activated, your business will start to receive notifications of upcoming bids and requests for proposals, as agencies are able to use PIP to send prospective vendors direct solicitations, so be sure to check on your account often.
This is also the perfect time to do some basic market research to ensure there’s a demand for your company’s products or services. Check out published contracting plans on the City Record or agency websites to get a better idea of what the City has been buying.

Also important while conducting this research is to familiarize yourself with the legal procedures involved in contracting. The Procurement Policy Board’s (PPB) web page will direct you to all the rules, amendments and transcripts you’ll need to become a real legal cognoscente. After your contract has been accepted by an agency, the City will begin negotiations for its final terms. There is a chance this will include a contract public hearing, but this is on a case-by-case basis and is a generally painless process.

Note that any vendors who have been awarded contracts valued at over $100,000 are required to complete and submit Vendor Exchange System (VENDEX) forms for the contracting entity and its principals; this information will be used by the City when they perform their responsibility review. Remember that the City is required by law to review each contract, as well as each subcontractor who might be in on the deal, so their skill set and integrity will be scrutinized.

The PPB also dictates that your business performance is legally required to be evaluated at least once a year. They use a pass or fail, “Excellent” or “Unsatisfactory” system that analyzes three criteria: the timeliness and quality of your company’s performance, along with your financial administration and accountability. These results will be sent to you for a chance to review and respond before they’re posted on VENDEX. All performance evaluations are then compiled into an annual report.

With your first contract completed, and the City’s payment tucked away in your PIP account, your business will have undergone a rite of passage. But that doesn’t mean your work is done: now is precisely when you should continue trolling agency websites and the City Record for more contracts. Leverage your past experience to make the second and third contract smoother—and hopefully more ambitious—efforts. Because now, just like the lights that outshine the stars in Times Square, when you do business with New York City, you’ll become a part of something greater.

Here’s how to avoid disaster recovery scams

Here’s how to avoid disaster recovery scams

By Linda McMahon, SBA Administrator

Last week, I visited Florida communities recovering from the devastation caused by Hurricane Michael.  The SBA’s disaster assistance team is working long hours at local recovery centers, helping homeowners, renters and businesses navigate the challenges that come with financing the rebuilding of one’s home or business.

Sadly, after every major disaster, scam artists prey on people at the most vulnerable points in their lives.  During my visit, disaster survivors told me stories about unscrupulous building contractors who convince people to give away their insurance proceeds without doing any construction work.

Here are a few tips from our disaster recovery partners at FEMA to keep in mind so you can protect yourself from becoming a victim of fraud:

Government employees don’t charge for recovery assistance 

Federal and state workers never ask for or accept money and always carry identification badges.  There is NO FEE required to apply for or to get disaster assistance from FEMA, the U.S. Small Business Administration or the state

Watch out for Price Gouging

Price gouging occurs when a supplier marks up the price of an item more than is justified by the actual costs.  Disaster survivors are particularly susceptible because their needs are immediate and they have few alternatives to choose from.   Notify your state’s Office of the Attorney General if you suspect a vendor of price gouging.

Dealing with Contractors

Individuals and business owners should take steps to protect themselves and avoid fraud when hiring contractors to clean property, remove debris or make repairs.
Here are a few tips:

• Don’t pay a contractor in full before work begins or is finished, and do not be pressured to endorse your insurance claim check to a contractor for repairs. Make final payments only after the work is completed and use a verified payment source (check, credit card, etc.).
• Only use contractors licensed by your state.
• Get the estimate in writing and review several contractors before deciding.
• Demand and check references and get any guarantees in writing.
• Any builders you hire should have their own general contractor liability insurance — ask to see proof. The insurance should cover any bodily injury or property damage the firm accidentally causes to you, your family, and your property.
• Insist on a written contract. Don’t sign a contract with blank spaces.

The best way to avoid fraud is to arm yourself against it by having a checklist to remind yourselves of your specific rebuilding needs and what you need to demand when hiring a contractor.

For information on how to apply for SBA disaster assistance, location of recovery centers, visit www.sba.gov/disaster

About the Author:

Linda McMahon

SBA Administrator

Linda McMahon serves as the 25th Administrator of the U.S. Small Business Administration (SBA). As a member of President Trump’s cabinet, she advocates on behalf of the 30 million small businesses in America, which employ nearly half of all American workers and account for 56.8 million jobs.

Being a Notary Public is a Great Asset

Why Become a Notary

Want to enhance your resume?  Why not become a Notary Public. Most employers expect their paralegals to be notaries and trust they know what they are doing!  Being a Notary Public is definitely an asset.

According to the National Notary Association, here are the top five reasons why you should consider becoming a Notary Public:

 

Make Additional Income

While Notaries are appointed by their states and serve as public officials, they charge their clients directly and the revenue is theirs to keep. That’s why tens of thousands of people hit the streets as “mobile Notaries” in their communities. Most states regulate how much a Notary can charge for an individual notarization (for example, $10 in California and Florida), but many clients often need more than one signature notarized. You’re also allowed to charge additional fees for items such as travel, supplies and other expenses.

Become a Notary Signing Agent

If you like the idea of being a Notary to make additional income, becoming a Notary Signing Agent  (NSA) is right up your alley. An NSA is a trained and certified professional who handles the notarization of loan documents in real estate closings. For the mortgage finance industry, NSAs serve as the critical final link between the banks and the borrower to complete the loan. They are hired directly by title companies and signing services as independent contractors to ensure that real estate loan documents are signed by the borrower, notarized, and returned for processing. Notaries make a considerable amount of extra income from this line of mortgage finance work, in addition to their work as a mobile Notary.

Improve Your Resume/Skill Set

Notaries are in high demand in a variety of industries, including banking, finance, medical, legal, government, insurance, technology … the list goes on. In fact, just about every industry uses the services of Notaries, so becoming one will add to your marketable skill sets, improve your resume and increase your value as an employee. In the workplace, Notaries serve two general functions: Notarizing documents in the back office for co-workers and bosses, or notarizing for customers in a bank or their local photocopy and shipping shop. Many employers value employees with Notary skills to handle their document authentication needs and provide customers with top-notch service.

Enjoy a Flexible Schedule

If you choose the mobile Notary/Notary Signing Agent route, you will have the flexibility to set your own hours. It’s a perfect line of work for home-based entrepreneurs, moonlighters, stay-at-home parents (who can do mobile notarizations in the evening) or anyone looking to make some additional income. Many people who need notarizations request them after normal business hours, so you can make the most of your evenings, or arrange a time that’s right for you.

Help Your Community 

America’s Notaries are known for their spirit of helping those in need. If you are the type of person who enjoys giving back to your community, being a Notary is a great way to support that passion. Many types of people need notarization services but cannot afford them, like the elderly, homeless, disabled and college students. These groups typically need notarizations for powers of attorney, residency affidavits, advance medical directives, college transcripts and enrollment verifications. Notaries often hold events at community centers, retirement homes and campuses to provide free or low-cost notarizations. It’s also a great way to network and market yourself for paying clients.

Requirements to Become a New York Notary

• 18 years of age.
• State resident or have an office or place of business in New York.
• Must read, write and understand English.
• Be of good moral character.
• Must have the equivalent of "common school education".
• No conviction of a felony or certain misdemeanors unless an executive pardon or a parole board certificate of good conduct has been received.

The Chamber Coalition (NACC, AAICC and HAICC) has partnered with the Law Firm of Figeroux & Associates to offer a 3-hour Notary Public Training Program. This seminar, which is open to students, alumni, and the general public, covers everything you need to become and serve as a Notary Public for the State of New York.  The Training Program is presented by Brian Figeroux, Esq., Senior Partner of the Law Firm of Figeroux & Associates. To register for the Chambers’ notary training program visit www.nacc.nyc or call 718-722-9217.

5 Key Questions to Ask Yourself if You Plan to Start a Business

5 Key Questions to Ask Yourself if You Plan to Start a Business

By Marco Carbajo, SBA Guest Blogger

Starting a business takes planning, making important financial decisions, and completing a series of legal activities. You will need to set goals, put plans into action, assess your progress, make necessary adjustments and grow your business.
   There are plenty of things that every business needs to do to get off the ground. So, here are five key questions to ask yourself as you plan to start a business.

1) Do I have what it takes to make it as a business owner?
Before you start a business, you should be able to answer a few very important questions. What product or service are you offering? What makes your product or service different from everyone else? Who is your ideal customer? How does your product benefit them? Answering these key questions will help define your business identity.
   Once you identify your business identity it’s important to remember, success in business requires passion, a lot of hard work, staying power and drive. According to Elizabeth Wilson of Entrepreneur Magazine, while some 40 million businesses are started each year, only 350,000 break out of the pack and begin growing and making money.

2) What is my niche and who is my target customer?
Before you start a business it’s key to know who your paying customer is going to be. You may have a great product idea that people need, but that is not enough to break through. You need to solve a problem that people want a solution for, and more importantly are willing to pay for.
   Don’t get trapped into the mindset that if you don’t offer everything, you’ll miss out on customers. Offering everything doesn’t mean that every person will buy your products or services.
   Find your niche and identify your target market. A niche is a specialized product or service you offer to your ideal customer. Your target market is the ideal client looking for what you have to offer.

3) Who will be on my team to help with my new business?
Starting and growing a business requires more than going at it alone. It takes a team to build a successful business and it’s just as important as developing your product. Even if you plan to be a sole proprietor, you can benefit incredibly from creating an outside support team to keep you focused and on track.
   You’ll also need to pull together a team of people as you set up and launch your business. These will be people that are needed to set up and run a business such as a lawyer, accountant, sales rep, web developer, marketing agency, etc.
   Each of these people on your team brings something different to the table, it’s essential that you listen to their advice on what needs to be done. Having a team you can trust is crucial to the success of your business. Getting the right advice can save you from making costly mistakes now and in the future.

4) What amount of funding do I need to start?
Starting a new business doesn’t have to require a great deal of funding if you decide to bootstrap. However, it will involve some initial investment to cover startup costs.  The key here is to work through your options and determine how much business funding you will need to cover not only your startup costs but also ongoing expenses before you are generating a profit.
   Once you have an estimate in mind, there are a number of ways you can fund your startup, including business credit cards, lines of credit, vendor credit, a business loan, etc. You may find that a combination of these sources listed may work best.

5) What business structure should I choose?
The business entity you select will impact various factors from your business name, to your liability, to how you file your taxes. It’s essential to choose the right business structure when starting a business. Once you choose your business structure, you’ll also need to get a tax identification number and file for the necessary licenses and permits.
 
Sign up for the Chamber's Small Business Boot Camp Series presented in partnership with the SBA. Visit: https://bit.ly/2E1oM02

3 Ways the New Tax Law Will Impact Your Taxes

3 Ways the New Tax Law Will Impact Your Taxes … and When They Take Effect

By Brooke Preston, Manta Contributor

Freelancers and independent contractors will see changes to tax rates and deductions next year, with some mandates still in effect now.

The Tax Cuts and Jobs Act was signed into law by President Trump in December, bringing significant changes to U.S. tax law. However, these changes will be rolled out at different times: While some, like changes to payroll withholding, may already be in motion, others won’t affect your tax return or total bill until next year.
Here are three key ways that freelancers and independent contractors will be impacted by the new tax bill, and when each will take effect.

 

Pass-Through Income Deduction  

A new pass-through benefit will reduce the business income you pay taxes on by up to 20% — starting with tax year 2018. If you’re a partnership, S corporation or sole proprietorship (freelancers are usually considered the latter), your business income is likely to qualify for the new deduction on “pass-through” business income.
While this change was designed to help small businesses, it will also benefit freelancers and independent contractors in many fields. You can take it even if you also take the standard deduction.
However, high-earning self-employed professionals in “service fields” (like healthcare, accounting and law) who earn more than $157,500 single or $315,000 couple from all income sources will see the benefit phase down after those thresholds. Dividends and interest from personal investments like stocks and bonds also aren’t eligible.
Still, most self-employed professionals could see significant savings when they file their taxes next year. Sadly, there will be no change in the tax burden on this year’s returns.

 

Lower Rates & Higher Deductions

Your tax rate may be lower and standard deductions higher — starting with tax year 2018. The new tax law will change tax brackets (what percent of your income you owe in federal taxes, based on your income level). All brackets will remain the same or become lower than previous years, so you should avoid any increase regardless of your income.
However, changes to tax brackets and the standard allowed deduction per person do not apply to the 2017 tax year; they’ll factor in for the first time when you file next year.

 

Health Coverage Requirements Remain

Affordable Care Act mandates are still in place — for this year’s filing. The future of the Affordable Care Act is uncertain. The individual mandate is scheduled to be repealed in time for next year’s tax filing. However, if control of Congress changes following November’s midterm elections, that requirement could be further amended. For filing 2017’s taxes, however, nothing has changed.