Is your business a Business or a Hobby?

Either way numia.biz can help keep your sales receipts and expenses organized.  The nice advantage a business has over a hobby is that it can deduct expenses like meals & entertainment, travel and other marketing costs.  The Internal Revenue Service looks at two things to determine if you are a business or a hobby.

1. If you make a profit in three out of five years.
2. If you can demonstrate that you are in business to make a profit.  That is, do you manage the business in a professional manner, how much time & effort do you put into the business, if you depend on its income and your level of expertise.

The key point the IRS will tell you again and again in proving you manage the business in a professional manner is good recordkeeping.  You should have a bank account for the business separate from your personal one.  You should record all business transactions and retain all your records (receipts).

Imputing your sales and expenses into numia.biz fulfills the “record all business transactions” IRS requirement.  That was easy!

Also, make sure your business has a tax ID number called a Employer Identification Number or EIN.  It’s just like your Social Security number except for businesses.  You can get one from the IRS in the USA here:

https://sa1.www4.irs.gov/modiein/individual/index.jsp

But beware; even though it is an online application, the computer only works Government hours as of January 15, 2009:

Monday – Friday: 6:00 a.m. to 12:30 a.m. Eastern time
Saturday: 6:00 a.m. to 9:00 p.m. Eastern time
Sunday: 7:00 p.m. to 12:00 a.m. Eastern time

My first blog

Welcome to numia.biz’s blog.  I hope you find it informative.

My name is NIck Gerber and I started numia.biz because I run a number of small businesses and I have a hard time keeping track of them all.  I have an accountant and a bookkeeper but the accounting software they suggested I use, while OK, was the packaged kind.  This meant that to share information we had to email the file back and forth.  A cumbersome and risky venture to say the least.  What if it got lost or the accountant made an entry that never got updated to my copy?

The solution?  Numia.biz  an online web accounting software (software as a service or SAAS) with one central database that allows me to enter sales, the bookkeeper to enter payroll & other expenses, the accountant to change entries as needed to make nice profit & loss reports and the banker who gets a view only account.

Check it out and tell me what you think.  Lets create a community of like minded creative business people unwilling to take “no” as an answer.