Monday, August 29, 2011

The New SBA Woman-Owned Small Business Program Explained

Leveling the Federal Contracting Playing Field

Congress has set a goal to help woman-owned small businesses (WOSBs) gain their share of the federal contracting market.  That is to say, a minimum of 5% of federal contracts should go to WOSBs.  However, WOSBs only received 4% of the $400+ billion contracts awarded annually well shy of the 5% statutory goal.

Some of the industries included in the list are 'Interior Design Services' (541410), 'Environmental Consulting Services' (541620), and 'Business Support Services' (561499).  This article can help you understand this program, or call Ember Accounting (425-373-6210 or  to help you determine if you are eligible and get certified with the program.

In an effort to address this shortfall and create a more level contracting playing field for women-owned small businesses, in late 2010 the U.S. Small Business Administration (SBA) announced the final rule that would implement the  WOSB program. Formally known as the Woman-Owned Small Business Federal Contract Program, the goals of the program were outlined by SBA Administrator, Karen Mills, in the agency’s press release:
Women-owned businesses are one of the fastest growing sectors of the economy…That’s why providing them with all the tools necessary to compete for and win federal contracts is so important. Federal contracts can provide women-owned small businesses with the oxygen they need to take their business to the next level.”
While the WOSB Program was formally launched by the SBA in February 2011, it wasn’t until April 2011 that the federal procurement officials were able to set-aside contracts under the program.
So what is the WOSB Program and how can you take advantage of it? Here’s what you need to know and the steps you need to take to get your business certified to participate!

What is the WOSB Program?
The WOSB Program is a win-win for WOSBs and EDWOSBs (Economically Disadvantaged Women-Owned Small Businesses) and the federal government.  WOSBs now have an opportunity to compete for and win contracts specifically set aside for WOSBs.

There are over 300 industries (PDF) (in the contracting world these are known as NAICS codes) where WOSBs and EDWOSBs have been deemed “underrepresented” or “substantially underrepresented”. Contracting officers can do a WOSB or EDWOSB set-aside contracts in these industries if:
  • There is reasonable expectation that two or more WOSBs/EDWOSBs will submit offers.
  • The anticipated award price of the contract does not exceed $6.5 million in the case of manufacturing contracts and $4 million in the case of all other contracts.
  • In the estimation of the contracting officer, the contract can be awarded at a fair and reasonable price.
Interested bidders can look on the Federal Business Opportunities web site to find federal government solicitations that may be set aside for WOSB or EDWOSBs

Are you Eligible for WOSB/EDWOSB Set-Asides?
To help determine your eligibility for the WOSB program you’ll need to be ask yourself a few eligibility questions:

1. Are you a small business as defined by SBA standards for your industry? –

2. Are you a woman-owned small business (WOSB)?
3. Does your business function within one of the over 300 industries (known as NAICS codes) for the WOSB program?

4. Are you an economically disadvantaged woman-owned small business (EDWOSB)?

There will also be two informational seminars hosted by Ember Accounting to help you understand the program and decide how to best proceed.
Call Ember Accounting (425-373-6210 or to help you determine if you are eligible and sign up for our informative seminar.

Monday, August 8, 2011

Avoid Criminal Charges with the IRS - August 31st Deadline Approaches

UPDATE: Hurricane Irene pushes IRS to extend deadline to Sept. 9th

IRS Reminds Taxpayers that the Aug. 31 Deadline Is Fast Approaching for the Second Special Voluntary Disclosure Initiative of Offshore Accounts

WASHINGTON — U.S. taxpayers hiding income in undisclosed offshore accounts are running out of time to take advantage of a soon-to-expire opportunity to come forward and get their taxes current with the Internal Revenue Service.

The IRS today reminded taxpayers that the 2011 Offshore Voluntary Disclosure Initiative (OVDI) will expire on Aug. 31, 2011. Taxpayers who come forward voluntarily get a better deal than those who wait for the IRS to find their undisclosed accounts and income. New foreign account reporting requirements are being phased in over the next few years, making it ever tougher to hide income offshore. As importantly, the IRS continues its focus on banks and bankers worldwide that assist U.S. taxpayers with hiding assets overseas.

“The time has come to get back into compliance with the U.S. tax system, because the risks of hiding money offshore keeps going up,” said IRS Commissioner Doug Shulman. “Our goal is to get people back into the system. The second voluntary initiative gives people a fair way to resolve their tax problems.”

The 2011 OVDI was announced on Feb. 8, 2011, and follows the 2009 Offshore Disclosure Program (OVDP). The 2011 initiative offers clear benefits to encourage taxpayers to come forward rather than risk detection by the IRS. Taxpayers hiding assets offshore who do not come forward will face far higher penalties along with potential criminal charges.

For the 2011 initiative, there is a new penalty framework that requires individuals to pay a penalty of 25 percent of the amount in the foreign bank accounts in the year with the highest aggregate account balance covering the 2003 to 2010 time period. Some taxpayers will be eligible for 5 or 12.5 percent penalties in certain narrow circumstances.

Participants also must pay back-taxes and interest for up to eight years as well as paying accuracy-related and/or delinquency penalties. All original and amended tax returns must be filed by the deadline.

The IRS has made available the 2011 OVDI information in eight foreign languages for those taxpayers with undisclosed offshore accounts.

Friday, August 5, 2011

Can I deduct state sales tax ?

Can I deduct state sales tax on my federal income tax return?

If you itemize deductions on Schedule A of IRS Form 1040, you are generally able to deduct state and local taxes including income tax, real property tax and personal property tax. For 2011, if it works to your benefit, you can elect to deduct state and local general sales tax in lieu of state and local income tax. One thing to keep in mind: if your total itemized deductions don’t exceed your standard deduction amount (for 2011, as an example, a married couple filing a joint federal income tax return would typically be able to claim a standard deduction of at least $11,600), you generally won’t get any additional tax benefit from deductions you claim on Schedule A.

When claiming a deduction on Schedule A for state and local sales tax, you have two options. You can deduct the amount that you actually paid in sales tax, as evidenced by receipts that you have accumulated showing amounts paid. Alternatively, you can use tables published by the IRS that are based on average consumption in each state, and factor in modified gross income (AGI) and number of exemptions you take. Even if you use the optional tables you’re still generally able to deduct the sales tax on certain specified items, like cars, boats or an airplane.

One caution here: special rules apply to married couples who file separate federal income tax returns. If both you and your spouse elect to deduct state and local sales tax in lieu of income tax, and your spouse elects to use the optional state sales tax tables, you’ll have to use the tables as well.

Things can get a little more complicated if you lived in more than one state during the year or if the sales tax rate for the state in which you live changed during the year. Currently the ability to deduct state and local sales tax in lieu of income tax expires at the end of 2011. And if you’re subject to the alternative minimum tax (AMT), the AMT rules may limit the deductions available to you, including the deduction for state and local taxes.

For additional information, call our office (425-373-6210) and talk to our tax professional, or see IRS Publication 600 State and Local General Sales Tax, and the instructions for IRS Form 1040: Schedule A.