AVOID THESE SIX MISTAKES IN SELLING YOUR BUSINESS

Most entrepreneurs eventually think about selling their businesses, whether as a prelude to retirement or to pursue other activities. In doing so, they often underestimate the effort required for a satisfactory outcome and overestimate the value and salability of their enterprises.
If you're contemplating selling, here are some common mistakes to avoid.

ADVANCE PROJECTIONS RELEASED FOR 2015 TAX NUMBERS

Each year the IRS is required to make inflation adjustments to hundreds of tax numbers in the tax law. Advance projections of what some of the 2015 numbers will be have recently been published.

The top tax rate of 39.6% is projected to start at income exceeding $413,200 for single taxpayers and $464,850 for married taxpayers. The projected standard deduction is $6,300 for singles and $12,600 for married couples filing jointly. The alternative minimum tax exemption for singles will increase to $53,600 and it will increase to $83,400 for married couples filing jointly. The personal exemption amount for 2015 is projected to increase to $4,000.

IMPORTANT REMINDER FOR EMPLOYERS

A reminder to employers: Effective January 1 of this year, you may no longer reimburse employees for their individual health insurance policies or pay the premiums directly to the insurance company on a pre-tax basis. Employers that continue to pay employee's premiums or reimburse their payment must include these amounts in the employee's taxable wages or be subject to substantial penalties. Only if the employer offers a group plan can pre-tax dollars be used for health insurance premiums.

IRS REMINDS TAXPAYERS ABOUT EDUCATION CREDITS

With schools back in session, the IRS has issued a reminder to taxpayers not to overlook available tax credits for education expenses. Tax credits are applied directly against the income tax you owe. Two available credits: the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC). The AOTC can be up to $2,500 annually for an eligible student and is 40% refundable. That means you could get money back when the credit exceeds your tax bill. The maximum LLC is $2,000 and is not refundable. You can claim only one type of education credit per student each year.

How much money did you save last year? If you didn't save at least 10% of your earnings, you didn't save enough. If your savings in 2013 fell short, the only solution is to take charge of your financial future right now and start saving more money.

DELAY PAYING TAXES WITH A LIKE-KIND EXCHANGE

Sitting on a piece of investment property that you would like to sell? By structuring the transaction as a tax-deferred exchange, you can delay paying taxes on the full amount of the gain realized.

USE THE 80-20 RULE TO INCREASE YOUR BUSINESS PROFITS

How well do you know your customers? Which ones are the most profitable? Which ones take most of your time? It's worth taking the time to find out. If your business is like most, the 80-20 rule applies. That is, 80% of your profits come from 20% of your customers.

THERE ARE TAX BREAKS WHEN YOU DO CHARITABLE WORK

If you do volunteer work for a charitable organization and have not kept track of your out-of-pocket expenses, you might be passing up an excellent opportunity to lower your tax bill.