To be treated as a real estate professional by the IRS, you must meet the following tests: Test 1: More than half (50%) of your personal services performed in all trades or businesses during the year are in real property trades or businesses wherein you materially participate. Test 2: Perform more than 750 hours of…
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What Is Wave Financial Software & What Does It Do?
Wave Financial is a financial management software designed specifically for small businesses. It offers a suite of tools that includes accounting, invoicing, payroll, payment processing, receipt scanning, and a business checking account for select users. Wave Accounting is known for its user-friendly interface and is often recommended to small business owners who aren’t accounting experts….
What Is an Early Payment Discount? A Small Business Guide
An early payment discount―also called a prompt payment or cash discount―is a reduction in an invoice balance when it’s paid before the due date. It provides an incentive for customers to pay their bills before they’re due. When used strategically, early payment discounts can speed up the bookkeeping process, increase customer loyalty, and improve cash…
Days Payable Outstanding (DPO): Formula, Calculation & Examples
Days payable outstanding (DPO) measures the average number of days from when a company purchases inventory and materials from the supplier until it’s paid. The DPO calculation is: DPO = Number of Days x = Average Accounts Payable Cost of Goods Sold The formula can easily be changed for periods other than one year or…
What Is 3PL? A Guide to Third-party Logistics Services
A 3PL (or a third-party logistics provider) is an outsourced partner that handles logistics processes for other businesses. 3PLs are commonly used by ecommerce companies that still manage product- and order-related tasks but want to delegate inventory management, warehousing, and fulfillment (including shipping, distribution, returns, and exchanges). Partnering with a 3PL company allows merchants to…
What Is VoIP? A Complete Guide for Small Businesses
Voice-over-internet-protocol (VoIP) is a type of phone system that uses the internet (instead of conventional copper wires) to make and receive calls. Compared to landline phones, it’s cheaper to set up and maintain and offers more advanced telephony features, such as automatic call distribution (ACD), interactive voice response (IVR) system, call analytics, and third-party integrations….
Newspaper Ad Cost & Factors Affecting How Much You Pay
Newspaper ads are best for businesses that want to reach customers aged 25 and up on a local, regional, or national scale. The average newspaper ad cost depends on the circulation of the paper, the size, day, and ink. A full-page ad can cost anywhere from $2,700 to over $100,000, depending on these factors, whereas…
What It Means to Materially Participate & the Passive Activity Loss Rules
The term “material participation” is used to describe your involvement in a business activity. Generally speaking, you materially participate in an activity if you’re involved in the operation of the activity on a regular, continuous, and substantial basis. If you meet these requirements, any losses from the activity are not limited by the passive activity…