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New Business

Small Business Tips: Using SEO To Spark Your Business in 2018

Small Business Tips: Using SEO To Spark Your Business in 2018

By | Digital Marketing, New Business, Small Business Tips | No Comments

I’m going to discuss one of the small business tips some entrepreneurs are not taking advantage of nowadays.

Over 3.5 billion searches happen per day, according to InternetLiveStats.com.  Is your website near the top of the search results when someone searches for the services or products you offer?  According to BigCommerce.com, in 2017, 51% of Americans (and that’s just Americans) prefer to shop online and that rate grows every year.

Find out more about SEOs here…

TAX-5

What You Need to Hear About the BMBE Law

By | New Business, Tax Rules, Tax Savings, Thoughtpieces | 6 Comments

The BMBE Law (Barangay Micro Business Enterprise)  (copy of the law here) has certainly come a long way.

If you had applied for it in 2013, you might have encountered staff and officers at the municipal hall’s business permits and licensing office blankly wondering what the heck are you applying for.

But now, it’s one of the first things small-scale entrepreneurs ask about.

There’s plenty of information online about the BMBE Law nowadays, so I won’t write anymore about the stuff you’ll find rewritten in various forms all over the Internet.

Instead, let’s talk about the nitty-gritties of the BMBE Law—the stuff you seldom hear about.
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Taxumo

Option O, or Option Ooh(Episode III)

By | New Business, Tax Rules, Tax Savings | No Comments

Hi guys, please check out a couple of our earlier blogs/episodes to follow JCruz’s tax questions.

 

Our triathlon coach, JCruz, is now at a stage where he’s choosing between accepting BIR’s peace offering, the Optional Standard Deduction (OSD), or attempt to identify, segregate, and document all his receipts/expenses. His monthly revenue is P30,000, and below is summary of his monthly expenses, excluding those paid for/reimbursed by his clients.

Transo/gas/parking            2,500

Meeting costs/food             2,000

Equipment                            2,500

Miscellaneous                      2,000

Total                                      9,000

*rent “difference”               3,500

In our previous blog we mentioned most of JCruz’s bills, and the lease, are not under his name. Plus it’s not that simple to split, say, the gas bill between personal and business. Under BIR rules JCruz must track, segregate and secure proper receipts for every single peso for these bills to qualify as tax deductions…yes, every single expense. This is referred to as “Itemized Deduction”, or what I call Option Ooh, because that’s the reaction I get whenever I explain how it works. Or he may choose OSD (let’s call this Option O) and limit expenses at 40% of revenue, which in this case would be P12,000 (P30,000 x 40%). This P12,000 is a bit under JCruz’ initial list of P12,500 (P9,000 + 3,500), but if he selects Option O it is an automatic P12,000 deduction. Simple. No further info needed.

And there two other advantages. Unlike Option “Ooh”, there is no need to list down every single type of expense (just one line, that’s it). Secondly, under Option “O” or OSD,  there’s no need to file audited financial statements should your revenues exceed P150,000 in any given quarter. “Audited” means you need to hire/pay a separate CPA (other than your accountant, if you have one) to basically check your or the accountant’s numbers.

Of course OSD is not for all. For taxpayers under special tax rates they must report and itemize all expenses to the BIR. There are also businesses with very low margins (ex. a supermarket) where that would be a bad choice. But for many professionals and especially home-based solopreneurs, OSD could be a far easier and cheaper way to file income taxes.

 

 

Taxumo

BIR’s peace offering (Episode II)

By | New Business, Tax Rules, Tax Savings | 2 Comments

Just like the Twilight series, please refer to earlier blog on business receipts and expenses Episode I.

 

Well we start Episode II again with our friend, triathlon coach JCruz, who’s eager to share his questions on business expenses. He has completed Step One and have identified all his “what-if” expenses, but has hit a roadblock. Turns out most of the utility bills are not under his name, his mobile postpaid plan, plus the lease agreement too. Within all these bills are his business expenses, but it can be a hassle to change all these agreements.

This is where Optional Standard Deduction (OSD) comes in. Ano yun? It’s the BIR saying for as long as an individual taxpayer is willing to limit business deductions to 40% of revenue/income, then the taxpayer need not keep the receipts/invoices for these deductions. What it really means is the BIR, in general, would ask no further questions (yey!) ONLY IF a taxpayer is not claiming just about any imaginable receipt out there, with a simple goal of paying little to no taxes. This is what I call a peace offering from the BIR (friends tayo ah) to anyone willing to claim only reasonable amounts of deductions. You see guys, the BIR can be reasonable, and this OSD option, this BIR peace offering, is one very effective way in simplifying the payment of income taxes.

So what are the other benefits of OSD (wait, there’s more?) Well, we might as well make this a trilogy. And our friend JCruz will be back for the finale.

Taxumo

Akin Na Lang Ang Resibo Mo! (Episode 1)

By | New Business, Tax Rules, Tax Savings | No Comments

May sobrang resibo ka ba dyan? Has anyone heard of that? How about a friend who volunteers to get the bill and calculate everyone’s share, because your friend needs that receipt? This is especially true for home-based professionals and solopreneurs who apparently don’t have enough expenses/receipts to claim as tax deduction. Well, we don’t need to be a CPA to know what the BIR thinks about that.

But are expenses that low, that one has to resort to scrambling for receipts? Or maybe home-based businesses have been ignoring what I call the “what-if” expenses for tax deductions?

What-if expenses refer to those you have to separately pay for, assuming there’s a workplace away from home. If you do, think about the rent, utilities, internet, pantry & office supplies, separate computer, etc. Yes you “save” via luxury of working from home, but are you not already paying for these? If you’re not working from home, maybe a slower/cheaper broadband plan is good enough? How about the family printer that without it, you’d have to buy one yourself? Or is it possible you could settle for a smaller house (cheaper rent) if you don’t need the office room? All these extra costs are business expenses, too.

So how do we report these what-if expenses as tax deductions. There are two. First is to identify and calculate your what-if costs. For example, triathlon coach JCruz’s (Juan de la Cruz) family moved to a more expensive place near BGC, for him to be closer with potential clients. The “difference” as supposed to staying elsewhere is sort of JCruz’s office rent won’t you agree? There’s one business expense right there! The second step is to provide valid documentation. So the easiest way here is make sure the lease agreement (and monthly receipts) is under his name (but of course claim only the “difference” as tax deductions, NOT the entire rent).

But Step Two is not that simple as it can be a hassle to have to track and account for all expenses. Good news is there’s an easier alternative, the Optional Standard Deduction (OSD), which we’ll cover in our next blog.

 

Stay tuned !

 

Important advice for aspiring Filipino entrepreneurs

Before You Start a Business, Focus on the Most Important Thing

By | New Business | No Comments

Important advice for aspiring Filipino entrepreneurs

I’ve been approached by numerous solopreneurs and home-based businesses for advice on how to sort out their bookkeeping.

The three most common hiccups are:

  • mixing personal and business-related funds;
  • having trouble segregating or splitting personal and business expenditures; and
  • ultimately, not having a clear picture of how much profit they’re truly making.

A younger me would have immediately put the accountant hat on, and fire off a number of tips and best practices, most simple would be maintaining a separate bank account exclusively for business and listing down all their regular expenses and identify those related to their business and pay those bills through that separate bank account.

But when someone approach me nowadays, the first thing I’ll do is congratulate them.

It’s takes a great deal of creativity, passion and courage for someone to put their dreams into action and leave their comfort zone (e.g. a stable corporate career.) That is awesome!

And the thing is, when you’re getting to point of being overwhelmed with the paper works, it’s highly likely that your business/vision has taken off.

It may still be at a low altitude, but you’ve gone through the first hurdle. So I always say: “You’re now having to deal with bookkeeping and taxes, which means you’ve made it.” (It’s sort of a good problem to have, one way of looking at it.)

What’s the point?

For aspiring entrepreneurs, my view is just make sure that your idea is groundbreaking/innovative/and revolutionary, and that you deliver the best product and service. The rest will be secondary.

Say you’re into baking. Competition might be stiff, but if you focus first on perfecting those irresistible pastries and creating that eye-catching brand/marketing. When your creation becomes a hit, I suppose it’s not too late to then shift your lenses onto your costs and expenses and look for cheaper suppliers for your ingredients? Yes, that stack of receipts and bills surely have to be taken care of, but when one’s business takes flight, the rest will be easy.

Do you want us to help you with business registration?

We’re trying out a new business registration service and you may qualify to be one of our pilot registrants! Details here:

Business Registration for Sole Prop, Freelancers, and Professionals