Month: August 2014

9 critical facts about American Families and Work

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A new report by the president’s council of economic advisers lays out nine critical facts about American families and work which highlight the changes necessary to sustain U.S. long-term economic growth and improve the well-being of American families.

According to the White House, trying to balance breadwinning and caregiving responsibilities without the support of work-family policies designed to help families navigate these complexities is leaving too many families stressed, exhausted, and burdened by work-family conflict.

Fact 1: Mothers are increasingly the household breadwinners:

Mothers are bringing home more of the family income than ever before. It is increasingly a necessary source of funds to pay for childcare, housing, transportation, and other essentials. More than 40% of mothers are now the sole or primary source of income for the household. This reflects both a rise of single mothers, 65% of whom participate in the labor force, and the fact that more married women are out-earning their husbands. In addition, most of the growth in family incomes over the past several decades has come from women’s rising earnings.

Fact 2: Fathers are increasingly family caregivers:

Dads are increasingly playing the role of the primary caregiver in the household. Today one in five fathers are now the primary caregiver of preschool-age children when the mother is employed. In the past 25 years, the number of stay-at-home dads with a working mom doubled. In the past four decades, the number of father-only families more than tripled, and currently 7% of families with children are father-only families.

Fact 3: Women make up nearly half of today’s labor force:

Today’s workforce is comprised more equally of men and women than in the past. Today women make up 47% of the labor force, compared to 38% in 1970. While women continue to work fewer hours than men on average, women are working more hours than they used to. The lesson is clear: if we want to increase the pace of economic growth, we should make it easier for more men and women to participate in the labor force.

Fact 4: Women are increasingly among our most skilled workers, attaining
the majority of college degrees, and deepening their work experiences:

Women are fast becoming our most educated workers—they are attending school at higher rates, and they are entering a wide range of careers and deepening their work experience. Women’s educational attainment grew during the 1970s and 1980s, catching up with college-going rates of men. In the early 1990s, women were as likely as men to graduate college, but women’s growth in educational attainment has continued and today substantially more women than men attend and graduate college. The education pattern of
young workers makes it clear that women will soon be the majority of college-educated workers. There is more work to be done in getting women into predominately male-dominated occupations and men into female-dominated occupations.

Fact 5: Most children live in households where all parents work:

Today, across married and single parent families, all parents are working in more than six out of every 10 households with children, up from four out of 10 in 1965. This includes both dual-earner couples as well as single working parents, both of which have been increasing.

 

Fact 6: Caregiving doesn’t end when the children are grown: Eldercare is a
growing responsibility of workers.

There are many people who need care besides children: the elderly and those with disabilities including grown children, spouses, siblings, and returning veterans. Most people care for someone besides themselves or a child during their lifetime. Approximately 40 million Americans (16% of the population aged 15 and older) provide unpaid care to an elderly relative or friend each year.

Fact 7: Men and women alike face challenges as they try to balance work
and family:

Men and women are increasingly pressed for time and, as a result, struggle to meet their work and family responsibilities. Dads’ desires to be active caregivers and to share parenting with their partners has likely contributed to the unprecedented level of reported conflict between work and family among men.

Fact 8: Many workplaces have not kept up with the needs of 21st century workers and families:

Workers struggling to balance their work and family obligations are increasingly choosing to work for employers that offer flexibility, and workers, in some cases, are leaving jobs that don’t offer the flexibility or time off they need to address their family responsibilities. Overall, a third of workers have passed up a job because it conflicted with family obligations.

Fact 9: Providing workplace flexibility and paid leave strengthens families, businesses, and our economy:

Policies that increase workplace flexibility, such as job sharing, phased retirement of older workers, flexible hours, and use of telecommuting, allow workers to continue making productive contributions to the workforce while also attending to family and other responsibilities.

For the full report from the White House Economic Advisers click here.

 

3 Tax Preparation Tips for Small Business

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As a small business owner you probably are doing a lot of things together i.e. from keeping track of expenses, cash flow, marketing strategies, customer service to everything else that is falling in bottom line.

With all that on your plate, the one thing that you don’t wish to make that fall in the bottom line, that is tax preparation. So if you literally do not want to delay the process and make your business in unwanted trouble, then consider the following advices.

Tips and guidelines:

1. Choose your filing method
The IRS offers a variety of electronic filing options; you can choose any for your small business return. If you are more inclined to traditional method, you can file tax manually or else can file online from your PC using an approved vendor’s software.

2. Consult a Professional
The professionals can save you from major headaches of tax preparation. If you belong to Brooklyn city, you can consult qualified tax professionals/ company like Nickles & Dimes Bookkeeping, Inc. to help you in the process.

As a business owner, this is important that, you consider these steps seriously if you do not want to face any legal consequences.

Tax Dodge Used by Bain Shifts U.S. Companies Abroad

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(Bloomberg) There’s more than one way for a U.S. company to avoid taxes by claiming a foreign address.

Consider the business founded in 1916 as General Plate Co., a maker of sensors and controls for everything from Fords and Frigidaires to the spaceship that first carried Americans to the moon.

While its top executives are still based in Attleboro, Massachusetts, it’s now known as Sensata Technologies Holding NV of the Netherlands.

Sensata didn’t become Dutch by using the strategy known as “inversion” that has alarmed President Barack Obama and that the U.S. Treasury Department and some Democrats in Congress are trying to curb. That technique, which involves reincorporating overseas without a change in majority ownership, has helped more than 40 U.S. companies lower their tax bills.

Instead, Sensata is one of at least 14 firms that have left the U.S. tax system through a sale to an investment fund, according to a tally by Bloomberg News. Although these companies have a combined market value of about $75 billion, this tax-avoidance strategy has gotten less attention in Washington than inversions and may be harder to discourage.

These buyouts mean profits for the U.S. private equity firms like Boston-based Bain Capital LLC that orchestrated them. Bain earned more than $3 billion after it took Sensata public as a Dutch company in 2010, with an effective tax rate about one-tenth of some competing manufacturers.

Minimize Taxes
Shifting to a foreign tax domicile “is looked at hard in every private equity deal,” said Joan Arnold, a tax partner at Pepper Hamilton LLP in Philadelphia. “They will be interested in what they can do to minimize taxes, and maximize sale price.”

Sensata and Bain declined to comment.

For the past three decades, Congress and regulators have adopted rule after rule to limit inversions, and a fresh wave of such deals has prompted discussions about tightening the law again. The Treasury Department is also studying how it can attack inversions without congressional action.

The buyout deals promise to be trickier to regulate, because they involve U.S. companies that are technically sold to a foreign acquirer—typically a shell company set up by the buyout fund in a tax-friendly jurisdiction like Bermuda. Policymakers are loath to penalize takeovers by genuinely foreign acquirers. A 2004 law targeting inversions didn’t address the technique at all.

‘Corporate Deserters’
Remarking that inverted companies have been called “corporate deserters,” President Obama has accused them of exploiting “an unpatriotic tax loophole.” The 51 companies that have inverted since 1982 or plan to do so have a current market value of $689 billion, based on the Bloomberg News tally. The total doesn’t include Burger King Worldwide Inc., the U.S. burger chain that said it’s in talks to buy Tim Hortons Inc. and move its headquarters to Canada from Miami.

By one Congressional estimate, future inversions will cost the Treasury Department $19.5 billion in forgone revenue over the next decade. It’s unclear how much the buyouts cost the U.S. government, or whether their impact is included in the estimate.

Companies that have gone offshore with the help of an investment fund include Michael Kors Holdings Ltd., the New York handbag maker that’s now incorporated in the British Virgin Islands; and Herbalife Ltd., the nutritional and weight-loss supplement company run from Los Angeles and incorporated in the Cayman Islands.

Kors declined to comment. Hilary Rosen, a spokeswoman for Herbalife, said the Cayman Islands incorporation wasn’t chosen for tax purposes.

Dell Buyout
As part of its $24 billion buyout by founder Michael Dell last year, the Round Rock, Texas-based computer maker Dell Inc. evaluated the idea of reincorporating in a foreign country. A description of the tax move was included in a presentation to the company by its bankers at JPMorgan Chase & Co. that was filed with the Securities and Exchange Commission.

The plan might have helped Dell make use of billions of dollars in profits that it had accumulated in foreign subsidiaries and that hadn’t yet been taxed in the U.S., according to the presentation.

One downside, according to the presentation, was that it risked alienating one of Dell’s biggest customers, the U.S. government. The company opted to remain registered in the U.S. It declined to comment.

Carlyle’s Axalta
Bain, which was co-founded by former Republican presidential candidate Mitt Romney and counts Boston Celtics co-owner Stephen Pagliuca among its top executives, followed up its Sensata acquisition by getting a Luxembourg domicile for a plastics maker run from Pennsylvania. Other private equity firms that have helped companies expatriate are New York-based Blackstone Group LP and TPG Capital of Fort Worth, Texas. The firms all declined to comment.

Last week, Carlyle Group LP, the Washington-based buyout firm, took steps to sell shares in Axalta Coating Systems Ltd. to the public. Axalta, incorporated in Bermuda and run from Philadelphia, is a former auto-paint division of DuPont Co. that Carlyle bought for $4.9 billion in 2013. Randall Whitestone, a Carlyle spokesman, had no immediate comment.

There may be more such buyouts than is publicly known. Companies sold to private-equity firms often stop making disclosures to the SEC until they seek to return to the public markets years later. So there’s no way of knowing how many buyout firms used the technique in recent years, a time when the pace of inversions by publicly traded companies surged.

Private Deals
“One thing about private equity is that it’s private,” said Arnold, the Pepper Hamilton lawyer.

One proposed rule change that may affect such buyouts was crafted by Democratic lawmakers including Representative Sander Levin of Michigan, echoing a proposal from the Treasury Department. That rule would treat certain companies as domestic taxpayers after a sale to a foreign buyer if the combined company’s “management and control” remain in the U.S.

Depending on how the language is interpreted, that might affect companies that undergo future buyouts like Sensata’s. Of the 14 buyout deals since 1990 in the Bloomberg tally, all but three of the companies kept their top officers in the U.S.

Even if the language applies, however, it may just create another potential problem: Companies might move their top executives abroad as part of a leveraged buyout, taking high-paying jobs as well as tax revenue out of the country.

‘Double Whammy’
“You’d have a double whammy,” said Nancy McLernon, the head of the Washington-based Organization for International Investment, which represents foreign-based companies operating in the U.S. “Only in Washington would we applaud a proposal that would encourage management to leave the U.S.”

In some cases, Arnold said, such a law would lead private-equity bidders to tell a company’s managers, “We’re going to do this deal, but the day after, you’re all moving to Ireland.”

Republican lawmakers are mostly opposed to legislation to tackle inversions unless it’s part of a broader revamp of the tax code, arguing that the U.S. tax system should be made less onerous so that companies aren’t compelled to flee. Even some Democrats have criticized the “management and control” idea.

Unintended Consequences
Senator Charles Schumer, the New York Democrat, said at a hearing in Washington last month that he’s concerned the “management and control” clause might have unintended consequences. He’s working on his own bill targeting inversions and hasn’t made it public yet.

Mark Mazur, the assistant Treasury secretary for tax policy, said in a statement to Bloomberg News that “the administration’s proposal is designed to ensure that firms with substantial U.S. business operations and executives in the United States also pay their corporate income taxes here, rather than changing their tax residency by simply using creative tax techniques.”

Sensata got its start almost a century ago as a supplier of gold plating to the jewelry industry in nearby Rhode Island. Sold to Dallas-based Texas Instruments in 1959, it became the electronics company’s materials and controls division. The unit supplied controls used on the Apollo 11 moon mission, and provided expertise for a restoration of the Statue of Liberty’s copper skin in the 1980s. Much of its sales come from sensors used in automobiles.

Favorable Tax Rate
By 2006, when Texas Instruments christened the unit Sensata and sold it to Bain for $3 billion, most of its manufacturing operations had already been shifted to lower-cost countries like Mexico, China, and Malaysia. Only 18 percent of its 5,550 workers were based in the U.S.

The buyout firm completed the acquisition through a Dutch entity, using a company factory near the German border as its legal address. Thomas Wroe, who became chief executive officer, remained in Attleboro along with most of his top managers.

When Bain sold shares to the public in 2010, Wroe and his staff included the company’s favorable tax rate as part of their sales pitch. On a conference call, Wroe said that Sensata paid cash taxes of about 4 percent of its “adjusted net income,” which he said compared with 30 to 40 percent rates paid by some competitors.

Xero Launches Small Business Solutions

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Online accounting software provider Xero launched a new small business solutions marketplace to support its expanding ecosystem of 350 business solutions that integrate with the company’s online accounting platform.

Xero, operating on its mission to give small businesses a collaborative, open ecosystem, now offers 350 business apps (up 35 percent from this time last year), delivers more than five times the third-party integrations of QuickBooks Online, and reports 42,000 active installs of solutions being used with its accounting platform (up 280 percent year-over-year), according to the company.

In addition to enabling business owners to find, compare and choose software solutions, the small business solutions marketplace includes ratings and reviews. The integration also prevents business owners from having to re-enter data into Xero to gain a more holistic view of their business finances.

Among the business tools that integrate with Xero, spanning from point-of-sale and payroll applications to marketing and CRM solutions, are Square for point- of-sale, ADP and ZenPayroll for payroll, Constant Contact for marketing and Google Docs for content collaboration.

“One size does not fit all when you think about the nearly 30 million small businesses in the US,” stated Peter Karpas, Xero’s CEO of North America. “Xero gets this. We believe that business owners should have a choice. That’s why we’ve designed our new marketplace to make it easier to search, compare and select from among the most innovative business tools available in the market. And it’s not just the quantity, we pride ourselves in the quality of how these tools integrate with Xero so it feels like one seamless product — not a bunch of products that are duct-taped together.”

What special deductions can I get if I’m self employed?

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You may be able to take an immediate expense deduction of up to $25,000 for 2014 ($500,000 in 2013), for equipment purchased for use in your business, instead of writing it off over many years. Additionally, self-employed individuals can deduct 100% of their health insurance premiums. You may also be able to establish a Keogh, SEP or SIMPLE plan and deduct your contributions (investments). – See more at: http://www.nadbookkeeping.com/taxstrategies-individuals.php?item=44&catid=27&cat=Tax%20Saving%20Strategies:%20Frequently%20Asked%20Questions#sthash.zohitzpp.dpuf