Top 5 Tips for Effective Time Management

One of the questions I am frequently asked is, “How do you get it all done?” Time management was not always one of my strengths, but over the years I have developed my time management muscle and you can do the same thing by applying the tips I am about to share!

But before I do that, I want you to take a quick assessment of yourself. How is a lack of time management negatively impacting your business? How is it holding you back? Write down your answers. What would your business and your life be like if you completed everything you wanted to complete every day?

My guess it is would be really different! Although time management feels like work, it is really the KEY to having more Freedom in your business. Christine Kloser, my former coach and author of The Freedom Formula, helped me understand that better time management would give me the time I desired to have the business of my dreams. And she was right!

My days don’t always go as planned, but by following the tips below, I am able to get my “to do’s” done so I can get to the things I love to do! And, I am able to sell MORE so I can live the life that I choose.

My Top 5 Time Management Tips Are:

• #1 Create your Ideal Schedule

You’ve heard me say it before, and I will say it again. You MUST have an Ideal Schedule. Without it, you are like a ship lost at sea, waiting for the next “thing” to beckon to you. An Ideal Schedule will allow you to take control of your sales results as well as your life. Most importantly, be sure to schedule time off as well as time to do business!

• #2 Make Selling a Priority

Once you have an Ideal Schedule, then you can make selling a priority. Selling is the first thing we like to procrastinate on because most people don’ t want to pick up the phone and make calls. But just by putting it on your schedule, you will be MUCH more likely to do it!

• #3 Turn E-Mail and the Internet Off

We all know this, so why do we keep our email open and our internet on? I think, deep down, we would rather be distracted then make sales calls or focus on what we need to do, so it is tempting to keep it all available. But if you want to increase your productivity, turn it off. Enough said.

• #4 Take Breaks

Add breaks to your Ideal Schedule. If you don’t, it is easy to just work, work, work until you can’t work anymore. But that’s not healthy and you already know that. So, take breaks when you need them, just time them so you know when it is time to get started again!

• #5 Have a “To-Do” List

Statistically your productivity goes up 25% when you use a “to do” list. So, why wouldn’t you? It’s an easy way to begin managing your time and to get those things done that need to get done.

Action Item: Print this list out and keep it in a spot you will see it daily. Review it whenever you feel overwhelmed or are procrastinating!

Things aren’t always to go as planned. But if you don’t have a plan in the first place, then you are planning to fail. Create your Ideal Schedule and follow it. I also recommend that you share it with your family so they know what you are up to. I promise you it will make a big difference in your business—and in your life!

Ursula Mentjes, M.S., ACC is the founder of Sales Coach Now and the author of Selling with Intention and One Great Goal. Ms. Mentjes has helped clients double and triple their sales revenue in as short as two months! If you want to do the same, then visit her web-site at www.salescoachnow.com and subscribe to her e-zine by clicking on the sign up box and typing in your email address. You will receive a FREE downloadable MP3 recording, "7 Ways to Sell More in a Doom and Gloom Economy". Or, join her at Sales Coach Now—LIVE 2011 for the re-release of Selling with Intention through Morgan James publishing! She will be sharing the stage with Loral Langemier, Craig Duswalt and other experts. www.salescoachnowlive.com. Ursula currently serves as the NAWBO-CA Vice President of Corporate Partners and Economic Development, is Past President NAWBO-IE and Past President of NAWBO-U (Inland Empire).

How to Turn Your 2% Payroll Tax Holiday into Greater Tax Savings

The largest new tax break for individuals was enacted on December 17, 2010. The one-year payroll tax reduction is found in the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. The act provides a 2-percentage-point payroll/self-employment tax holiday for everyone subject to the Social Security tax.

How Social Security and Medicare are Calculated for an Employee

Social security is computed on the first $106,800 of the employee’s wages at 6.2%. Medicare is computed on the entire wage at 1.45%. The employer also pays into the system for each employee utilizing the same rates. Social security plus Medicare is known as FICA. The FICA tax totals 7.65% on wages up to $106,800 and then drops to 1.45% on wages in excess of $106,800.

Under the 2010 Tax Relief Act, for calendar year 2011 the employee (NOT the employer) social security rate will be reduced to 4.2% and the total FICA tax will be 5.65% on wages up to $106,800 and 1.45% on wages in excess.

For example, Louie has wages for 2011 of $50,000. If the Tax Relief Act was not enacted, Louie’s FICA tax for 2011 would be $3,825 (7.65% x $50,000). Under the Tax Relief Act, Louie’s FICA tax for 2011 is $2,825 (5.65% x $50,000). That is a savings of $1,000 ($3,825 - $2,825).

The maximum reduction in FICA tax is $2,136 ($106,800 x 2%). For a married couple, each with wages of $106,800 or more, their maximum reduction would be $4,272 ((106,800 x 2) x 2%).

Use the Tax Saving Calculator to calculate your potential tax savings.

How to Maximize the 2% Payroll Tax Holiday as an Employee

If you are not currently contributing the maximum into your 401K plan or any other defined contribution plan, this is a great opportunity to maximize the 2011 payroll tax holiday.

Let’s catch back up with Louie who earned $50,000 of wages in 2011. He has been contributing 6% of his wages to his 401K plan totaling $3,000 ($50,000 x .06). The contribution is not subject to federal (and possibly state) income tax, so Louie would only recognize $47,000 in income on his 2011 tax return. For 2011, Louie would be in the 25% marginal tax bracket (considering no other adjustments). His $3,000 contribution to his 401K would represent a $750 tax savings ($3,000 x 25% marginal tax rate).

What if Louie increased his 401K contribution by the 2% payroll tax savings to 8% (6% + 2%)? His 2011 401K contribution would total $4,000 ($50,000 x 8%). His $4,000 contribution would now represent a $1,000 tax savings ($4,000 x 25% marginal tax rate); an increase of $250 ($1,000 - $750). The $1,000 savings from the payroll tax holiday calculated above has now increased to a $1,250 in tax savings ($1,000 + $250).

Here is a link to that calculates 401K Tax Savings. You will want to have your tax return available.

What if you are not eligible to contribute to a defined contribution plan or your employer does not offer a plan? You may be eligible to set up a traditional IRA and receive the maximizing benefit.

How Social Security and Medicare are Calculated for the Self Employed

The Self-Employment Contributions Act (SECA) imposes two taxes on the self-employed as mentioned above. SECA taxes apply to “net earnings from self-employment” greater than $400. Social security is computed on the first $106,800 of the net earnings at 12.4%. Medicare is computed on the total net earnings at 2.9%. Social security plus Medicare is known as SECA and the total SECA tax on net earnings up to wages $106,800 is 15.3% and drops to 2.9% on net earnings in excess of $106,800.

Under the 2010 Tax Relief Act, for calendar year 2011, the social security portion of the SECA tax will be reduced to 10.5%. This will reduce the total SECA tax to 13.3% (15.3% - 2%) on net earnings up to $106,800 and 2.9% on net earnings in excess of $106,800.

For example, Buddy has net earnings for 2011 of $50,000. If the Tax Relief Act was not enacted, Buddy’s SECA tax for 2011 is $7,650 (15.3% x $50,000). Under the Tax Relief Act, Buddy’s SECA tax for 2011 is $6,650 (13.3% x $50,000). That is a savings of $1,000 ($7,650-6,650).

The maximum deduction in SECA tax is $2,136 ($106,800 x 2%).

To receive the benefit of the SECA tax rate reduction throughout 2011, the self employed individual must apply the reduction in figuring his or her quarterly estimated tax payments because the IRS will presumably reflect the reduction in 2011 Form 1040ES, Estimated Tax Voucher Coupon for Individuals.

Use the Tax Saving Calculator to calculate your potential tax savings. Instead of entering “Annual Salary,” project your 2011 net earnings from self employment.

How to Maximize the 2% Payroll Tax Holiday as Self Employed

If you are not currently contributing the maximum into your business’s 401K plan/Solo 401K plan or SEP-IRA, this is a great opportunity to maximize the 2% SECA tax holiday.

Let’s catch back up with Buddy who had net earnings of $50,000 in 2011. Buddy has been contributing 6% of his net earnings to his solo 401K plan totaling $3,000 ($50,000 x .06). The contribution is not subject to federal income tax and is an “adjustment to income,” which lowers adjusted gross income (AGI). For 2011, Louie would be in the 25% marginal tax bracket (considering no other adjustments). His $3,000 contribution to his SEP IRA would represent a $750 tax savings ($3,000 x 25% marginal tax rate).

What if he increased his SEP IRA contribution by the 2% SECA tax savings to 8% (6% + 2%)? His 2011 SEP IRA contribution would total $4,000 ($50,000 x 8%). His $4,000 contribution would now represent a $1,000 tax savings ($4,000 x 25% marginal tax rate); an increase of $250 ($1,000 - $750). The $1,000 savings from the 2 % SECA tax holiday calculated above has now increased to a $1,250 tax savings ($1,000 + $250).

Here is a link to that calculates 401K Tax Savings. You will want to have your tax return available.

Other Maximizing Ideas

The payroll tax or SECA tax savings can also be used to pay down credit cards or a mortgage. This would reduce interest paid.

Or, you can go out and buy something and do your part in boosting economic growth, which is the full intention of this new tax savings provision.

Beth Bockenhauer is the owner of Beth Bockenhauer, CPA, a boutique accounting and CPA practice based in southern California. She started her career with five years of military service. She then worked for ten years as a small business owner, and holds a Bachelor of Science degree in accounting. Beth has worked in public accounting for the past seven years. For more information, visit www.bethbcpa.com