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Article Check - How To Save All That Money You Aren't Making At Art
If you were thinking of offering your employees special rewards as incentives for having good attendance records, then you must read on. In fact, employers that offer attendance bonuses may find themselves falling foul of the law.The Royal Mail introduced a rewards scheme for staff that did not to take time off sick. Under the Royal Mail's scheme, workers with full attendance records were entered into a prize draw to win Ford Focus cars or holiday vouchers worth ?2,000. As a staff incentive, it seemed to work. The Royal Mail says its overall sickness absence levels fell during a nine-month period (between August and April) by 11%.However, such schemes could have serious ramifications from a legal viewpoint, and leave employers vulnerable to a variety of legal claims.DiscriminationEmployees could bring discrimination claims on the grounds of disability or sex. The success of these claims would depend on each employee's particular circumstances and needs, whether in relation to their family, religion or health. Alternatively, qualifying employees could bring claims for being subjected to detriment treatment as a result of asserting their statutory rights, for example, for:-Time off for dependants and antenatal care; Time off for study or training or time off for jury service Maternity leave; Adoption leave; or Paternity or parental leave;Disability discrimination may occur if, for example, an employee had time off connected to a disability and this was not taken into account by the employer under the reward scheme. The employee might claim that the failure of the employer to set aside his/her absence for disability related reasons amounted to less favourable treatment. How can employers protect themselves from such claims?Employers can avoid these pitfalls by including a list of exceptions in the reward scheme, for example, jury service or study leave, taking into account any statutory rights to time off; or Pay bonuses to employees connected to performance in their job rather than implementing an attendance reward. Employers should be wary of adopting an attendance bonus scheme without legal consultation.If you require further information contact us.Email: enquiries@rtcoopers.com© RT COOPERS, 2005. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advic
c. LLCs and LLPs Many people ask me about Limited Liability Corporations and Limited Liability Partnerships. These are both fairly new entities, and as such, don’t have (as of yet) their own share of rules and laws by the IRS. I personally don’t recommend them, as they have little advantage over the S corporation, and are usually more expensive to set up. A savvy person can set up an S corporation fairly easily. A lawyer is required for LLCs and LLPs, and they like charging a good deal of money to do so – which is why they recommend them so much.
d. RECOMMENDATIONS In my personal opinion, most artist would do best as a sole proprietorship, unless there is a significant possibility of liability (i.e., you do 3D installations that someone could trip and fall on).
For people who have a degree in health or have any kind of experience in the health care field, especially those registered nurses, finding a job should not be much of a problem. There is a great demand for health care employees all over the country. If you take a look at the classified ads section of any newspaper, you can easily find hospitals, clinics and other medical establishments that are looking for healthcare professionals such as nurses. There is no shortage for health care careers in the United States. In fact there are more jobs than the present number of healthcare professionals. The shortage of nurses in the United States have prompted most hospitals in the country to outsource nurses and other health professionals from other countries mostly those from around Asia.Health care careers are one of the best paying jobs in the country today. Due to the high demand for healthcare professionals and the fact that there are only few who are qualified to take the job, the cost of hiring healthcare professionals have increased considerably over the years. Yet, why is it that despite the fact that health care careers are paying really well, there are only a handful of people who would plunge into this type of career? According to some studies, despite the growing need for healthcare professionals and the fact that the pay is really good, only a few would want to work in hospitals and other medical institutions. Most people have some kind of aversions to diseases and sufferings, that they would rather not work in hospitals and other medical institutions where they will have to deal with tragedies and diseases everyday. Hospitals and other medical institutions are such disease-prone places that many people would find it really very stressful to work in them.
1. WHAT STRUCTURE SHOULD I USE? The first question to ask in setting up your art business is how you should set it up – i.e., what structure it should have. This may seem like a silly question, but it is a very important one, as it determines how you report your income and expenses. And report them you must! There are several types of organization to choose from, and the determining factor is risk. How much risk are you willing to take? Are you willing to pay more for less risk? I will demonstrate what this means:
a. SOLE PROPRIETORSHIP The most risky organization is the sole proprietorship. This is because if someone sues you as a sole proprietorship, they can, theoretically, take your home, your car, and all your worldly possessions in a lawsuit. There is no separation between the business and you, so any lawsuit can take everything. However, most art businesses have little lawsuit risk attached to them. I am unlikely to get sued for damages unless I steal someone else’s art. (don’t do that!) If I was installing stairs, on the other hand, I would definitely want to limit my risk. The term for this characteristic is ‘unlimited liability.’ Now, there are advantages to being a sole proprietorship. There is little to no cost in setting it up, no legal forms to fill out, no paperwork to file with the state. When you report your income and expenses, it goes on the Schedule C of your own personal tax return (1040), and isn’t taxed separately. There are also disadvantages, such as the aforementioned unlimited liability. There is also the fact that the company has a limited life – when you pass away, so does the business. (Ask Disney if this is important). It is also more difficult to get financing from banks and therefore difficult to expand.
b. CORPORATION If you are willing to pay a little more money on a regular basis, you can get the advantage of limited liability with a corporate setup. A corporation is a separate entity from you as a person, therefore if it is sued, only those assets owned by the company can be taken, not your personal home and possessions. This is the main advantage of having a separate corporation. It is also easier to expand, as banks are usually more willing to offer financing for this. It can have a life beyond the life of the founder, as many corporations have (i.e., Sears, Disney).
Now to the disadvantages; The main one is the cost and complication of setting up and upkeep. There are fees to setting up the corporation with the state (none for the federal government), and annual fees to keep the license in good standing every year. In my home state of Florida, it is about $75 to set up the corporation, and $150 a year to keep it going. There is also additional paperwork, as you need to file a separate tax form every year (1120 or 1120S) with the federal government. You may also need to file one for your state. And, you may have to pay taxes at a corporate rate, which is usually higher than your personal rate.
I would like to go into the differences between a C corporation and an S corporation. C is the corporations we are most familiar with – corporate monsters like Microsoft, IBM, Disney, Sears, etc. These get taxed at a corporate rate, which is currently 15% up to $50,000 in profit, and goes up from there. An S Corporation (S stands for Small) has to have less than 100 stockholders (among other requirements) but does NOT get taxed at the corporate level. Let me repeat that – no tax is paid on the corporation itself. Instead, the income gets reported on each shareholder’s tax return, and is paid at their personal rate. This is usually the better deal for small companies, as personal returns are not taxed at all for the first $7000 in income.
c. LLCs and LLPs Many people ask me about Limited Liability Corporations and Limited Liability Partnerships. These are both fairly new entities, and as such, don’t have (as of yet) their own share of rules and laws by the IRS. I personally don’t recommend them, as they have little advantage over the S corporation, and are usually more expensive to set up. A savvy person can set up an S corporation fairly easily. A lawyer is required for LLCs and LLPs, and they like charging a good deal of money to do so – which is why they recommend them so much.
d. RECOMMENDATIONS In my personal opinion, most artist would do best as a sole proprietorship, unless there is a significant possibility of liability (i.e., you do 3D installations that someone could trip and fall on).
Every day I come across people who are unhappy because they are struggling to make ends meet, working like slaves, living paycheck to paycheck, in debt up to their eyeballs. I recognize them because I used to be in that situation. No longer though; I’m now part of the home-based business revolution.Why aren’t they? Because as I find out when I talk with them, they subscribe to many of the myths that surround business in general, and in particular the home business industry. To help them—and you if you’ve been thinking about it—I’d like to take a look at five of those myths and BUST them!MYTH # 1: You need A LOT OF MONEY to start a business…This is true IF you want to buy an existing business or start a traditional business (in most cases), specially a brick & mortar business. While doing some research the other day, I saw a motel for sale for $600K and a drycleaner for $250K.I’ve owned a brick & mortar business once: an art gallery and framing shop in Whitehorse, with 12 employees. I bought it in 1986—inventory & goodwill for $200,000 (they wanted 250K). I had to borrow $20,000 from my parents for the down payment, then pay the ex-owners $30,000 a year for 8 years. That was hard on the cash flow. More recently, I invested in six online “stores”. With the support and the tutoring, that was a $20,000 investment.Another example, I was talking to someone last month who was thinking about buying a fast food franchise for $300K. He told me he would be paying himself a living wage for 4 years, and then in year 5 he expected a profit of $50,000. Plus all the work and time and worry that goes into that! So yes, for SOME types of business you need a lot of dough…Even businesses on the Net can be rather expensive; one business opportunity states up front that the investment is $49,500! Ouch! But at the other end of the spectrum, I’ve recently started a very lucrative ‘home-based’ business for under $2,000. And I know of MANY business opportunities you can get going for even less than thatSo you see, that’s another myth busted: you DO NOT need a LOT of money to start a lucrative business. You just need to start with the right one*.MYTH # 2: You need to WORK A LOT—at least 50 or 60 hours a week—to get a business off the ground and profitable.You do for a ‘regular’ type of business. That was the case for me with Yukon Gallery… 7 days a week… 10-12 hours a day…Working on the Holidays…
a. SOLE PROPRIETORSHIP The most risky organization is the sole proprietorship. This is because if someone sues you as a sole proprietorship, they can, theoretically, take your home, your car, and all your worldly possessions in a lawsuit. There is no separation between the business and you, so any lawsuit can take everything. However, most art businesses have little lawsuit risk attached to them. I am unlikely to get sued for damages unless I steal someone else’s art. (don’t do that!) If I was installing stairs, on the other hand, I would definitely want to limit my risk. The term for this characteristic is ‘unlimited liability.’ Now, there are advantages to being a sole proprietorship. There is little to no cost in setting it up, no legal forms to fill out, no paperwork to file with the state. When you report your income and expenses, it goes on the Schedule C of your own personal tax return (1040), and isn’t taxed separately. There are also disadvantages, such as the aforementioned unlimited liability. There is also the fact that the company has a limited life – when you pass away, so does the business. (Ask Disney if this is important). It is also more difficult to get financing from banks and therefore difficult to expand.
b. CORPORATION If you are willing to pay a little more money on a regular basis, you can get the advantage of limited liability with a corporate setup. A corporation is a separate entity from you as a person, therefore if it is sued, only those assets owned by the company can be taken, not your personal home and possessions. This is the main advantage of having a separate corporation. It is also easier to expand, as banks are usually more willing to offer financing for this. It can have a life beyond the life of the founder, as many corporations have (i.e., Sears, Disney).
Now to the disadvantages; The main one is the cost and complication of setting up and upkeep. There are fees to setting up the corporation with the state (none for the federal government), and annual fees to keep the license in good standing every year. In my home state of Florida, it is about $75 to set up the corporation, and $150 a year to keep it going. There is also additional paperwork, as you need to file a separate tax form every year (1120 or 1120S) with the federal government. You may also need to file one for your state. And, you may have to pay taxes at a corporate rate, which is usually higher than your personal rate.
I would like to go into the differences between a C corporation and an S corporation. C is the corporations we are most familiar with – corporate monsters like Microsoft, IBM, Disney, Sears, etc. These get taxed at a corporate rate, which is currently 15% up to $50,000 in profit, and goes up from there. An S Corporation (S stands for Small) has to have less than 100 stockholders (among other requirements) but does NOT get taxed at the corporate level. Let me repeat that – no tax is paid on the corporation itself. Instead, the income gets reported on each shareholder’s tax return, and is paid at their personal rate. This is usually the better deal for small companies, as personal returns are not taxed at all for the first $7000 in income.
c. LLCs and LLPs Many people ask me about Limited Liability Corporations and Limited Liability Partnerships. These are both fairly new entities, and as such, don’t have (as of yet) their own share of rules and laws by the IRS. I personally don’t recommend them, as they have little advantage over the S corporation, and are usually more expensive to set up. A savvy person can set up an S corporation fairly easily. A lawyer is required for LLCs and LLPs, and they like charging a good deal of money to do so – which is why they recommend them so much.
d. RECOMMENDATIONS In my personal opinion, most artist would do best as a sole proprietorship, unless there is a significant possibility of liability (i.e., you do 3D installations that someone could trip and fall on).
Managers are often confronted with high employee attrition. For most managers the easiest solution when a valuable employee resigns his job is to offer more benefits in terms of money and perquisites. But rarely does it work. Exit interviews often point out low moral due to infrequent appreciation and recognition of the contribution of the employee leading to de-motivation and disenchantment with the job.Improving employee motivation and morale is the easiest method of improving organizational productivity and cut down employee turnovers. Replacing good employee could be expensive in terms of recruitment costs and time.Research has conclusively established that the major reason for attrition in an organization is not money. It is more a matter of lack of recognition and rewards. You may be able to reduce attrition considerably if managers are trained to recognize and reward good performance. In fact every opportunity must be used to appreciate the work of the employees. Easier said than done, it takes a dedication and commitment towards the employees.Here is a list of the ways one can motivate employeesFind every opportunity to appreciate good workRecognize contributions in public forums and employee get together or meetingsOffer opportunities to learn, improve skills and knowledge through trainingCreate scope for sharing success through with others through narrating best practices adoptedToken gifts and invitation to a Dinner with familyOffer opportunities for rest and relaxation on attaining goals and good performancesFeature in house journals. If house journals are not available make sure to write out a appreciation and put on notice boards and circulate to all members of the organizationIt only takes imagination to create a list as long as you want. Plan and create the list for frequent use.Employee motivation is a complex subject and generally a neglected area. Whatever recognition and rewards are conferred are very mechanical and lacks warmth and spontaneity.It is easier to theorize than practice employee motivation programs. It would not be a bad idea to train your managers extensively on this area. The rewards for the organization could be less employee turnovers, high levels of motivation, increased productivity, commitment and team work.
b. CORPORATION If you are willing to pay a little more money on a regular basis, you can get the advantage of limited liability with a corporate setup. A corporation is a separate entity from you as a person, therefore if it is sued, only those assets owned by the company can be taken, not your personal home and possessions. This is the main advantage of having a separate corporation. It is also easier to expand, as banks are usually more willing to offer financing for this. It can have a life beyond the life of the founder, as many corporations have (i.e., Sears, Disney).
Now to the disadvantages; The main one is the cost and complication of setting up and upkeep. There are fees to setting up the corporation with the state (none for the federal government), and annual fees to keep the license in good standing every year. In my home state of Florida, it is about $75 to set up the corporation, and $150 a year to keep it going. There is also additional paperwork, as you need to file a separate tax form every year (1120 or 1120S) with the federal government. You may also need to file one for your state. And, you may have to pay taxes at a corporate rate, which is usually higher than your personal rate.
I would like to go into the differences between a C corporation and an S corporation. C is the corporations we are most familiar with – corporate monsters like Microsoft, IBM, Disney, Sears, etc. These get taxed at a corporate rate, which is currently 15% up to $50,000 in profit, and goes up from there. An S Corporation (S stands for Small) has to have less than 100 stockholders (among other requirements) but does NOT get taxed at the corporate level. Let me repeat that – no tax is paid on the corporation itself. Instead, the income gets reported on each shareholder’s tax return, and is paid at their personal rate. This is usually the better deal for small companies, as personal returns are not taxed at all for the first $7000 in income.
c. LLCs and LLPs Many people ask me about Limited Liability Corporations and Limited Liability Partnerships. These are both fairly new entities, and as such, don’t have (as of yet) their own share of rules and laws by the IRS. I personally don’t recommend them, as they have little advantage over the S corporation, and are usually more expensive to set up. A savvy person can set up an S corporation fairly easily. A lawyer is required for LLCs and LLPs, and they like charging a good deal of money to do so – which is why they recommend them so much.
d. RECOMMENDATIONS In my personal opinion, most artist would do best as a sole proprietorship, unless there is a significant possibility of liability (i.e., you do 3D installations that someone could trip and fall on).
For most law students, networking with law firms is the best way to find a great internship. In large cities and small towns, the legal community is close knit and many times, it is who you know, not what you know. The more people you meet with, the better your chances of building your professional network, and finding a great intern position. Networking is best started with one’s own friends and acquaintances. You can gradually branch out to network with your friends’ friends, colleagues, and members of the legal profession, as well as others in the business community that can further your efforts.Do not be shy about contracting people of the legal profession who are not known to you. Concentrate on lawyers who are active in your field of interest. Make a list of potential law firms and seek appointments to set up interviews. You can make it clear that you are not looking for a job or internship, but seeking their advice and suggestions on your common field of interest. In the process of meeting them, if they do have an opening for an intern, they may consider you. However, your primary concern at this time is to increase your networking. Think of it as personal marketing that will serve you well your entire career.Preparing for InternshipPrior to networking with fellow professionals and law firms, ensure that you have your resume ready. An internship resume must be informative, proactive and engaging. Have it written by a professional to ensure you stand out from the crowd amongst all other intern applicants. Emphasize your area of interest and why you want to intern for a certain law firm. Your resume should emphasize your experience (including volunteer work, community service and clerking positions while in school) that are relevant to your field of interest, your commitment to the law and must express your passion for your chosen career field.Your resume should be well written to create a good impression, and should be accompanied by an excellent cover letter.Depending on the law firm you are applying to for your internship, you may be required to submit a number of documents with your job application, such as:-A covering letter stating the reasons for applying -A detailed resume -A sample of written legal work (take care that it does not breach client confidentiality) -Two written references -Copies of university and other degrees, and/or diplomas -A list
I would like to go into the differences between a C corporation and an S corporation. C is the corporations we are most familiar with – corporate monsters like Microsoft, IBM, Disney, Sears, etc. These get taxed at a corporate rate, which is currently 15% up to $50,000 in profit, and goes up from there. An S Corporation (S stands for Small) has to have less than 100 stockholders (among other requirements) but does NOT get taxed at the corporate level. Let me repeat that – no tax is paid on the corporation itself. Instead, the income gets reported on each shareholder’s tax return, and is paid at their personal rate. This is usually the better deal for small companies, as personal returns are not taxed at all for the first $7000 in income.
c. LLCs and LLPs Many people ask me about Limited Liability Corporations and Limited Liability Partnerships. These are both fairly new entities, and as such, don’t have (as of yet) their own share of rules and laws by the IRS. I personally don’t recommend them, as they have little advantage over the S corporation, and are usually more expensive to set up. A savvy person can set up an S corporation fairly easily. A lawyer is required for LLCs and LLPs, and they like charging a good deal of money to do so – which is why they recommend them so much.
d. RECOMMENDATIONS In my personal opinion, most artist would do best as a sole proprietorship, unless there is a significant possibility of liability (i.e., you do 3D installations that someone could trip and fall on).
The art of presenting well is a learned skill, but even if you are a complete beginner, you can get a head start by not falling for these common pitfalls:1. Never, ever, imagine that you can get away with not preparing and that when you stand up in front of your audience, you will be inspired to speak fluently and intelligently! It just does not happen and there is no quicker way to destroy your credibility and reputation. Remember the old saying – fail to prepare and you prepare to fail!2. Don’t feel you need to include lots and lots of information – you will lose your audience. Practise the presentation with a carefully-chosen audience (who you can trust to be helpful and objective) and you will be surprised how long it can take to cover a few points when they are involved and contributing.3. Don’t read from your notes. You may need prompts, but you should be well enough prepared to speak spontaneously about your content.4. Don’t get too technical in an effort to prove how much of an expert you are. Unless all the audience are at least as well-versed in jargon as you are, you will simply alienate them.5. Don’t be afraid to use humour. A little lightness softens up your audience and makes them more receptive. On the other hand, attempting jokes which fall flat will work against you. Know your limits.6. Never give out handouts while you are talking, as people will instinctively start reading them and you will lose their attention. Remember to allow sufficient time afterwards for the distribution of handouts.These points are intended as a general guide. As you become more practised at giving presentations, you will no doubt begin to learn some rules of your own about what does and does not work for you, and that is when you will become really proficient.
c. LLCs and LLPs Many people ask me about Limited Liability Corporations and Limited Liability Partnerships. These are both fairly new entities, and as such, don’t have (as of yet) their own share of rules and laws by the IRS. I personally don’t recommend them, as they have little advantage over the S corporation, and are usually more expensive to set up. A savvy person can set up an S corporation fairly easily. A lawyer is required for LLCs and LLPs, and they like charging a good deal of money to do so – which is why they recommend them so much.
d. RECOMMENDATIONS In my personal opinion, most artist would do best as a sole proprietorship, unless there is a significant possibility of liability (i.e., you do 3D installations that someone could trip and fall on). In that case, I would recommend S corporations as the best alternative.
2. WHAT IS INCOME?
In the common usage, Income means (literally) any money coming in – whether it be a loan from the bank, a paycheck from your job, a gift from Grandma, or a sale of a painting. However, in the accounting world, many words take on different meanings. This is one of them.
Income, for someone running a business, derives from operating the business. If it’s an art business, then sales from your art business is your main form of income.
That income can have several categories, though; You can have sales of existing art and art products, such as bookmarks, you can have commissioned sales of art, and you can have sales of excess supplies, or shipping, or display equipment. The majority of your income should come from the first two categories, though.
COMMISSIONS
For those that are unfamiliar with commissions, it is when someone contracts with you to produce a piece of art to their own needs and desires, rather than purchasing art you created before you met them.
CONSIGNMENTS
Another form of sales is consignment sales, which involves placing your artwork in someone else’s store, and only receiving money when it is sold. Sometimes this is a gallery, sometimes a gift shop, sometimes online – but the portion of income you receive is the only income you declare, not the total price. For instance, if I have a print on sale at the local gift shop for $30, and I get $20 from it when it sales (the other $10 goes to the gift shop) then I declare $20 income from the sale.
SELLING OTHER STUFF
Sometimes an artist has too much of a particular supply, and decides to sell off the excess on ebay, or doesn’t need a table anymore, or a particular display piece. This is called incidental income – not something you do on a regular basis in your business. It’s not the sale of art, but it is slightly related. These sales are income, but not always sales income – sometimes it’s called ‘gain’ rather than profit. It’s reported differently only if you are selling fixed assets, i.e., your computer, your desk, your display equipment. If it’s just paint or brushes, it’s regular income. Sometimes size DOES matter!
SHIPPING
If you also charge shipping on your sales, this too is considered income. The cost of your shipping shows up in expenses, and usually these two cancel out.
SALES TAX
Many people ask how Sales Tax comes into play with income. In reality, we never ‘earn’ sales tax – we merely collect it and hold it for the state government. Whenever we make a sale that is taxable, we collect the sales tax. Once a month, or once a quarter, or sometimes once a year, we tally up all the sales tax we SHOULD have collected and pay it to the state. That SHOULD is a very important word! If you did not collect sales tax, but should have, you are STILL liable to pay it to the state, out of your own pocket.
Since Sales Tax is not income, when we collect it we do not include that as income (thus we don’t get charged income tax on that money). It’s not an expense that we can deduct, either… it doesn’t go on the federal income tax return at all!
CONCLUSION
All in all, income is any money coming in that is a result of a business transaction in your business. That sounds complex, but it helps differentiate between things that aren’t income – like a gift from your dad, or a loan from the bank. Those aren’t income, and you don’t pay taxes on it!
We wouldn’t want to be paying Uncle Sam MORE than he is asking for, now, do we?
3. HOW DO I VALUE INVENTORY? Inventory is one of those mysteries of the accounting world, an esoteric subject fit to backroom discussions by candlelight and adding machines, right? WRONG! Inventory is a very simple concept – the cost of the stuff you have that you can sell.
INVENTORY Inventory can include any number of things, but they should be things that can be traced to a particular piece. That means
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