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The Small Business Advisor Newsletter for August, 1996

TAX-FREE JOBS FOR YOUR KIDS. (by Bernard Fruchtman, Publisher/Editor of the monthly newsletter that helps you save money by reducing your taxes, TaxTalk-Plain & Simple) Here are some really good reasons to hire your children to work for you in your small business:

Earned income ( e.g., wages) is taxed to your children at their tax rates. This means your children can earn each up to $4,000 in 1996 without owing any income tax. For example, the first $4,000 of earned income is offset by a standard deduction of $4,000 so no tax is due. Earned income above this amount will be taxed to them at their own low rates, starting at 15%.

No income tax withholding is required on your child's wages provided your child meets the following conditions: Did not owe any income tax last year Will have earned income in 1996 of less than $4,000 Does not have any investment income Your children's wages are deductible by you as a business expense thereby, lowering your taxes, while the wages you pay them are received by them tax-free, up to $4,000. It's a terrific win - win situation.

Furthermore, no Social Security taxes are owed on wages paid to your children provided: they are under 18 years of age , and your business is unincorporated. By hiring your child, you avoid paying Social Security taxes that you would owe on a non-family member doing the same task and your children avoid employment taxes that would be deducted from their salaries if they worked for someone else.

Your child's tax-free earnings can be increased to $6,000 if your child makes a $2,000 deductible contribution to an IRA. Although tax rules require that a person have earned income in order to make an IRA contribution they do not require that the IRA contribution be made with the earned income. Thus, your child's IRA contribution can be funded with a gift from you or a grandparent allowing the entire tax-free $6,000 to be used for some other purpose ... e.g., saved for college.

****NOTICE. Remember that the Small Business Advisor is not in the business of giving professional tax advice. Always consult your own tax professional.****

USING FREE SAMPLES. "Free Sample, Tie-Ins" By Gary Christensen

A good way to get responses, is to offer a Free Sample of some kind in your ads. You'll probably get MORE responses, because of the Free Item you offer in your ad, then with any other kind of ad or offer! There's also a good chance that several of those who respond will be just curiosity seekers, who may not ever order anything from you. But, most of those who respond are good quality mailorder buyers!

The Free Sample that you offer in your ad, to all who respond, should be something that is a good "tie-in",.. somehow related, or connected, to your other products. (Example: Some companies send out a Free Pen to all their customers (with their company name; address & phone number imprinted on it, which is known as an Advertising Specialty.) This is also used by companies IN THE BUSINESS OF MAKING & SELLING PENS, to allow their customers to "see what they sell" first, before asking a customer to send them an order. Plus, it's used by Speciality Advertising companies to show you what an imprinted pen looks like and why YOU should buy some, to give away to your customers, too!

An Instruction, or Guide booklet is used effectively by many companies, and can discuss some phase of their business, and coupons and ads within it's pages offer other, related items which the prospective customer might need! (Example: A booklet titled: "How to prepare Camera Ready copy for your printer" offered many years successfully by a Mail Order Printer! Besides the instructions on preparing your copy, there were ads in the booklet about their typesetting prices; their printing prices; coupons for discounts, etc.

The nice thing about producing a small instructional booklet is that it can easily tie-in to most any kind of product or business! Examples: (1) "The Home Tune-up Guide" - offered by an Auto Parts store,.. with ads on it's pages for their products; price of oil; spark plugs, etc! (2) "A Moving Experience" - issued by a national van lines & moving company, listed all the things you might be packing; how to wrap things; what to mark on each box, etc. It also contained ads for their moving service; office locations & phone numbers; things you might need to help you move, and much more! (3) "The Wedding Planner" - published by a local Photo and Bridal store, outlined all the things a Bride and Groom need to do prior to their wedding; plus a listing of all the prices of wedding photos; dresses; flowers, which their company could provide! (4) "How to take Great Pictures" was a small instructional booklet about camera angles; lighting instructions, etc. from a local Photo Processing company. Also within it's pages were ads and coupons for photo developing; enlargements; discounts on photo albums, etc.

Our own company put together a guide book once, about how to make money by writing & selling your own book! It covered what Authors should know about Self-Publishing their own book; How to market the finished product; How to price it, etc. And within it's pages were other items that customers could buy; other Books & Reports we have for sale; advertising items, etc.

Why not consider putting together an instructional or guide booklet, (which may only cost you 40c each, if you order 1,000 printed) and offer readers a FREE COPY in your ads?? You send them the FREE guide book; on it's pages can be tips; guidelines; instructions, and also within it's pages can be some ads & prices for your other, related products & services! Plus, you get a new name of a responsive prospective customer, to whom you can send other flyers later!

(Gary Christensen is a Monthly Columnist of Money-Making, Home-Based, Business Articles. Contact Gary at: 999 N.W. Sycamore Ave., Corvallis, OR 97330, Or write to him at his e-mail address: gchrist95w@aol.com)

CREDIT CARDS. Be careful about the number of credit cards you accumulate including Visa, MC, gasoline, retail stores,etc. If you are trying to obtain bank financing for your small business, the bank will frequently add up the total credit available from ALL your cards and this can hurt your chances for approval. Get rid of the cards you don't use and check your credit rating from time to time by contacting the credit bureaus (for example, Equifax: 800 879 4094).

Have a tidbit of interest for the newsletter? Please pass it along via e-mail ... we'll publish it in the next newsletter, give you appropriate credit, and make you famous.

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