23
Apr

The 10 Best (and Worst) States for Small Business Taxes

The 10 Best (and Worst) States for Small Business Taxes

The 10 Best (and Worst) States for Small Business Taxes

Credit: RawPixel/Shutterstock

The amount of state and local taxes you pay each year can have a huge impact on your business’s bottom line. That’s why it is important to know the type of tax burden you are facing when deciding where to launch your business.

A new study from Fundera revealed that Alaska and South Dakota are the best states for small businesses taxes, while New Jersey and New York are the worst.

“There are certainly other factors entrepreneurs should consider when deciding where to open up shop — population growth, access to capital, local laws, competitors, and so on — but looking at tax data is a great place for an aspiring business owner to start,” wrote Ben Johnson, a content marketing manager for Fundera, on the company’s blog. “If you choose to locate your business one state over, you could save thousands a year in taxes and hundreds of thousands over the course of your career.”

To determine the best and worst states for small business taxes, researchers primarily focused on tax burden, which is calculated by looking at the total amount in taxes residents of a state pay and then dividing that amount by the state’s total income. The tax burden shows the percent of total income an average business owner is paying toward taxes, rather than simply their income tax rate.

“Tax burden is an important measure for small business owners — it shows what percentage of their income they are spending on taxes rather than reinvesting in their own companies,” Johnson wrote. “With less of their income going to local and state taxes, entrepreneurs have more capital to reinvest in their business and potentially start new business ventures.”

This index includes 26 individual tax measurements, including taxes for income, property, sales, motor fuels, alcohol and death.

For the study, researchers started with the average salary for a small business owner in the United States: $76,010. They then applied the maximum possible deduction for single individuals, which varied from state to state, to determine the taxable income for the average business owner in that state.

The study’s authors then multiplied the taxable income by the state’s tax burden to figure out what the average entrepreneur would pay in state and local taxes.

“And since over 90 percent of U.S. businesses are pass-through entities (sole proprietorships, partnerships, LLCs, and S Corps), these businesses report their income on the business owners’ tax returns but are taxed on the individual income tax,” Johnson wrote. “So to calculate how much the average small business owner pays in taxes, we were able to look exclusively at individual taxes rather than business taxes.”

Based on the data, these are this year’s best states for small business taxes:

1. Alaska

  • Average small business owner state and local taxes: $4,930.42
  • State tax burden (as percent of income): 6.5 percent
  • Top state income tax bracket: No state income tax

2. South Dakota

  • Average small business owner state and local taxes: $5,391.10
  • State tax burden (as percent of income): 7.1 percent
  • Top state income tax bracket: No state income tax

3. Louisiana

  • Average small business owner state and local taxes: $5,422.16
  • State tax burden (as percent of income): 7.6 percent
  • Top state income tax bracket: 6 percent

4. Wyoming

  • Average small business owner state and local taxes: $5,428.41
  • State tax burden (as percent of income): 7.1 percent
  • Top state income tax bracket: No state income tax

5. Tennessee

  • Average small business owner state and local taxes: $5,584.58
  • State tax burden (as percent of income): 7.3 percent
  • Top state income tax bracket: 5 percent

6. Texas

  • Average small business owner state and local taxes: $5,759.25
  • State tax burden (as percent of income): 7.6 percent
  • Top state income tax bracket: No state income tax

7. South Carolina

  • Average small business owner state and local taxes: $5,877.73
  • State tax burden (as percent of income): 8.4 percent
  • Top state income tax bracket: 7 percent

8. New Hampshire

  • Average small business owner state and local taxes: $5,987.03
  • State tax burden (as percent of income): 7.9 percent
  • Top state income tax bracket: 5 percent

9. Oklahoma

  • Average small business owner state and local taxes: $6,011.25
  • State tax burden (as percent of income): 8.6 percent
  • Top state income tax bracket: 5 percent

10. New Mexico

  • Average small business owner state and local taxes: $6,073.59
  • State tax burden (as percent of income): 8.7 percent
  • Top state income tax bracket: 4.9 percent

On the flip side, New Jersey and New York are the worst states for small business taxes, because the research shows that business owners who live there pay almost twice as much as they would if they lived somewhere else.

These are the 10 worst states for small business taxes in 2017:

1. New Jersey

  • Average small business owner state and local taxes: $9,279.68
  • State tax burden (as percent of income): 12.2 percent
  • Top state income tax bracket: 8.97 percent

2. New York

  • Average small business owner state and local taxes: $8,652.48
  • State tax burden (as percent of income): 12.7 percent
  • Top state income tax bracket: 8.82 percent

3. Illinois

  • Average small business owner state and local taxes: $8,349.68
  • State tax burden (as percent of income): 11 percent
  • Top state income tax bracket: 3.75 percent

4. Maryland

  • Average small business owner state and local taxes: $8,073.92
  • State tax burden (as percent of income): 10.9 percent
  • Top state income tax bracket: 5.75 percent

5. California

  • Average small business owner state and local taxes: $7,883.32
  • State tax burden (as percent of income): 11 percent
  • Top state income tax bracket: 13.3 percent

6. Massachusetts

  • Average small business owner state and local taxes: $7,805.71
  • State tax burden (as percent of income): 10.3 percent
  • Top state income tax bracket: 5.1 percent

7. Connecticut

  • Average small business owner state and local taxes: $7,760.00
  • State tax burden (as percent of income): 12.6 percent
  • Top state income tax bracket: 6.99 percent

8. Pennsylvania

  • Average small business owner state and local taxes: $7,743.42
  • State tax burden (as percent of income): 10.2 percent
  • Top state income tax bracket: 3.07 percent

9. Oregon

  • Average small business owner state and local taxes: $7,642.56
  • State tax burden (as percent of income): 10.3 percent
  • Top state income tax bracket: 9.9 percent

10. Minnesota

  • Average small business owner state and local taxes: $7,560.69
  • State tax burden (as percent of income): 10.8 percent
  • Top state income tax bracket: 9.85 percent

The study’s authors admit that there were some limitations to the research. They said it is difficult to define the average business owner, since salaries differ by industry, location within a state and a business owner’s experience.

In addition, applying a maximum deduction assumes that all small business owners only deduct the standard deduction from their incomes.

“But many business owners have deductions, exemptions, and credits that decrease the amount of taxes they pay,” Johnson wrote. “To compare states, we needed a control for the study — so we assumed the typical small business owner takes the maximum deduction available for a single filer.”

You can find specifics on tax burden and maximum deductions for each state on Fundera’s website.

23
Apr

The Best Fonts to Use on Your Resume

The Best Fonts to Use on Your Resume

The Best Fonts to Use on Your Resume

Credit: lyeyee/Shutterstock

One of the most important design choices you can make on your resume is your font. The typeface you use can send a strong message about your personality, style and professionalism – all of which can impact a hiring manager’s impression of you before they’ve even met you in person.

“Since a prospective employer is looking at the resume for only (a few) seconds, you want (a font) that is aesthetically pleasing and grabs the employer’s attention at a quick glance,” said Wendi Weiner, a certified professional résumé writer and founder of The Writing Guru.

So how do you choose from the countless available fonts to find the right one for your resume? Though there are several different font families, most job seekers go with serif fonts — stylized fonts with tails and other decorative markings, like Times New Roman — or sans-serif fonts, simpler, no-frills varieties like Arial. A Weemss infographic on the psychology of fonts said that serif typefaces are associated with being reliable, impressive, respectable, authoritative and traditional, while sans-serif fonts are seen as universal, clean, modern, objective and stable.

No matter which font family you choose, your typeface should be easy on the eyes and should show up well both in print and on a screen, regardless of size or formatting. It’s also a good idea to choose a standard, universal font that works on any computer’s operating system, as your resume will also likely be scanned by automated applicant-tracking software.

According to resume and career experts, here are the best font choices for job seekers, and the kind of message each one sends to potential employers.

If you want to use a sans-serif font, Arial is one of the best options for your résumé. Barbara Safani, owner of the career management firm Career Solvers, told AOL Jobs that she likes to see the Arial font because the lines are clean and it’s easy to read. A Creative Group blog post noted that some hiring managers may find Arial to be banal and unsophisticated. However, this tried-and-true classic has become a standard and is definitely a safe choice.

As the default Microsoft Word font, Calibri is an excellent option for a safe, universally readable font. Professional résumé writer Donna Svei is a strong advocate of Calibri on resumes, noting on her blog, AvidCareerist, that this font is familiar to most readers and renders well on computer screens. Svei also noted that 12-point Calibri produces a “perfectly sized” two-page résumé of 550 to 750 words.

This serif font is another “default-type” font that works well for a resume because many recuiters are familiar with it. A Monster.com blog post describes Cambria as being “not as formal as Times New Roman, but just as dependable.”

If you work in a creative industry like fashion or photography, you can showcase your style and sophistication with Didot. A Canva Design School blog post called this serif font “distinctive” and classy,” praising its upscale look. However, author Janie Kliever cautioned job seekers that, since delicate serifs display best at larger sizes, you may want to use Didot only for headings on your resume. Download it from UFonts.

Job seekers looking for an old-style font should consider using Garamond for their résumés. This timeless typeface has “a simple elegance that looks polished in print … or on screen,” wrote The Creative Group.

If you want a traditional-looking alternative to the oft-overused Times New Roman, consider switching to the Georgia font. A Colorado Technical University infographic on Mashable recommended using Georgia because of its readability: The font was designed to be read on screens and is available on any computer.

This clean, modern, sans-serif font is a favorite among designers and typographers. Helvetica appears in numerous corporate brand logos (Nestle, Lufthansa and American Apparel, to name a few) and even on New York City subway signs. In an article on Bloomberg Business, typography expert Brian Hoff of Brian Hoff Design described it as “professional, lighthearted and honest,” noting that is reads as “business-y.” Helvetica comes preloaded on Macs, but PC users can download it from The Fonty.

Despite being called the “sweatpants of fonts,” this universally recognized typeface remains a popular résumé choice. Marcia LaReau, founder and president of Career Strategist, wrote on Forward Motion Careers that Times New Roman will show up as clean, easy-to-read text on any computer. While this font is highly readable and safe, be aware that, as with Arial, using it may be construed as boring and unimaginative, and it is unlikely to stand out in a sea of résumés.

Job seekers who want a sans-serif typeface but don’t want to use Arial or Verdana can switch to Trebuchet MS. According to ZipJob, this font was specifically designed to appear well on a screen. It’s also a bit more textured and modern-looking than many traditional resume fonts.

Here are a few other popular résumé font choices that are clear, legible and scalable:

Serif – Bell MT, Bodoni MT, Book Antiqua, Bookman Old Style, Goudy Old Style

Sans-serif – Century Gothic, Gill Sans MT, Lucida Sans, Tahoma, Verdana

Additional reporting by Chad Brooks. Some source interviews were conducted for a previous version of this article.

23
Apr

Want to Join the Gig Economy? 15 Companies Hiring Freelancers

Want to Join the Gig Economy? 15 Companies Hiring Freelancers

Want to Join the Gig Economy? 15 Companies Hiring Freelancers

Credit: LOFTFLOW/Shutterstock

The way people work has been changing. No longer is it commonplace for a worker to spend their entire career at one company. In some cases, even working a single full time job at all is a thing of the past. Many workers have eschewed the structural limitations of the 9-to-5 and the physical office in favor of becoming independent contractors; freelancers; in short, by becoming entrepreneurs. While the flexibility and autonomy is enticing, being a freelancer means hard work, networking to land good gigs, and producing great work to boost your reputation. Here’s a look at the lay of the freelancing land and some advice on how to succeed out on your own.

According to a study by Upwork and Freelancers Union, 60 percent of freelancers in the U.S. started freelancing by choice versus necessity, and 67 percent of freelancers agree that more people are choosing to work independently today compared to three years ago.

Freelancing offers freedom and flexibility, and many workers are opting for this lifestyle over traditional, full-time opportunities. For instance, Nick DiUlio, a freelance journalist and adjunct professor of journalism at Rowan University in New Jersey, had been freelancing in his spare time and assumed it would be a stopgap between full-time gigs.

“It started as a way to get out of a toxic workplace where I was unhappy,” DiUlio told Business News Daily. “I loved the flexibility and variety. After a year, I couldn’t imagine myself doing anything else.”

Whatever your skill set, it’s important to recognize market demand to keep your freelance business running. According to a study performed by FlexJobs, these are the top 15 companies for hiring freelancers so far this year.

  • Mandarin-English Interpreter
  • ASL Interpreter
  • In-field Quantitative Market Researcher (multiple locations)
  • Danish Telephone Interpreter
  • Cantonese Telephone Interpreter
  • Teacher – Family and Consumer Science
  • Project Manager
  • Senior Project Manager
  • High-Value Insurance Consultant (multiple locations)
  • Curriculum Consultant
  • Sales Associate
  • Virtual Teacher, English
  • Virtual Teacher, Chemistry
  • Social Studies Curriculum Writer/Subject Matter Expert
  • Astronomy Alignments Contractor
  • Relief Veterinarian (multiple locations)
  • Insurance Premium Auditor
  • Loss Control Surveyor
  • Content Manager
  • Guide – DIY Fashion
  • Local Childcare Coordinator (multiple locations)
  • Picture Editor
  • Vector/Illustration Reviewer
  • Senior Web Developer
  • Business Program Launch Manager

DiUlio advises having a well-thought-out plan and doing your research before you begin looking for freelance work.

“You need to know and approach [freelancing] with an economic plan,” DiUlio said. “Web-based writing is a little easier, because the payment turnaround is quicker, as opposed to print which could have 30-, 60- or 90-day turnarounds.”

Knowing payment structure, how much you’ll get paid and when is invaluable information for your freelancing career, he added.

Most importantly, think of yourself as a business of one, said Ryan Johnson, director of categories at Upwork.

“Budget time to build your personal brand and market yourself,” Johnson said. “In addition, allocate some of your time to refreshing your existing skills and adding new ones. Businesses are increasingly turning to freelance marketplaces to access skills that an in-house team doesn’t have. Keeping yourself up-to-date with new and emerging trends will make you more desirable.”

It’s important to remember to keep in touch with your contacts, and to make new ones, said Michael Parker, vice president of collaboration at join.me. Networking is especially important for freelancers, to help get new client leads.

“Attend industry events you’re interested in,” Parker said. “Go to other events to network with prospective clients and sources.”

The best way to start once you’re ready? Just do it.

“Once you set up [an online] profile and land your first project, you’ll be able to showcase your work, receive client reviews and start building your online reputation,” Johnson said. “You should view your profile as a more innovative, better version of a résumé, since it provides proof of your work.”

Whether you make a career out of freelancing or use it as a part-time platform, acknowledge your worth and don’t work for free, DiUlio said.

“[For] your work, whatever that may be, you deserve to be paid,” he said.

Additional reporting by Adam C. Uzialko.