This is How Small Business Owners Can Take Full Advantage of the Tax Cuts and Jobs Act

Tax time is no one’s favorite time of year. But for small business owners, this year’s filing deadline at least comes with the promise of better rates ahead: Many of the changes included in the Tax Cuts and Jobs Act, passed by Congress in December, are going into effect.

As entrepreneurs, we should expect to benefit–at least, temporarily–from the new tax plan. My company, Manta, conducted a poll in January and found that 83 percent of business owners anticipate their companies will be positively impacted by the changes. Nearly as many, 80 percent, said they support the Tax Cuts and Jobs Act.

Some are already feeling the benefits of having more money in their pockets, according to another poll we conducted last month. 34 percent of small business owners said their business income had increased as a result of the tax reform, just three months into the year. 42 percent have already changed their budgeting or financial planning because of the new tax law.

It’s time to start preparing for the changes–if you haven’t already.

For the most part, the provisions of the Tax Cuts and Jobs Act that benefit small businesses go into effect this tax year — meaning they won’t impact the returns that are due this month. 

The 58 percent of small business owners who have not yet adjusted their budgets should get started, however. While that big refund check may be a year away, it’s not too early to plan accordingly and make sure you take full advantage of the potential savings. 

The first step is to review your company’s legal structure and determine how it will affect your taxes. One of the most important changes in the new tax law allows pass-through entities (such as S corporations and LLCs) to deduct up to 20 percent of their business income.

However, this doesn’t apply to certain professional services firms. Review your situation with a tax professional or attorney–you might be able to adjust your business structure to take advantage of this deduction. 

Make the most of your company’s tax savings.

The Tax Cuts and Jobs Acts allows businesses to immediately write off the full cost of new equipment and other property, instead of depreciating the expense over five or more years. The new law also protects these write-offs from being rescinded in the future. 

This is great news for business owners who want to invest in their growth. According to our polls, 28 percent of small business owners plan to use their tax savings to invest in new technology and 21 percent plan to open a new location or expand. The immediate write-off should make these investments (and your cash flow) much more manageable in the short term.

Just check with your tax advisor before making a major purchase–you could run into unforeseen obstacles. For example, the depreciation rules for “heavy” SUVs–those with a gross vehicle weight above 6,000 pounds–are different than for light trucks and vans. You want to be prepared for the potential impact on your taxes.

Streamline your expense tracking and tax prep.

Make sure you accurately track and document all business expenses. Our polls found that 21 percent of small business owners still use paper receipts to track expenses.

Think about that for a second. It’s messy and inefficient, and you risk losing receipts or miscategorizing expenses.

Hiring a pro is probably the best way to ensure that you take full advantage of the new deductions and stay on the right side of the law. The U.S. tax code is confounding to even the most experienced business owners–20 percent of poll respondents told us they didn’t understand all the deductions available to them. Whatever else Congress accomplished with the Tax Cuts and Jobs Act, they definitely didn’t simplify things.

Use a mobile application or accounting software to scan and save digital copies of your receipts and categorize the expenses. Then, when tax time rolls around, you can output a well-organized report or import the data directly into your tax prep software. And if you use an outside accountant or tax preparer, they’ll greatly appreciate you providing a digitized expense report instead of handing over shoeboxes full of paper receipts.

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Facebook CEO Mark Zuckerberg Wins Would-Be Congressional Grilling

Facebook CEO Mark Zuckerberg remained calm under pressure during five hours of questioning by U.S. senators about a series of recent crises culminating with the latest involving Cambridge Analytica, a political consulting firm that gained access to data about up to 87 million Facebook users.

Overall, Zuckerberg appeared to win the day by avoiding any major stumbles and appearing open to the idea of limited privacy regulation. For their part, the senators were generally gentler with Zuckerberg than expected during the hearing, which risked being a dramatic grilling broadcast live to millions of people at home.

Zuckerberg, wearing a suit and tie instead of his signature grey t-shirt, and looking somber throughout, responded to lawmakers without becoming flustered. He readily apologized for the privacy dust up, saying “It was my mistake. I’m sorry,” and that Facebook had failed to take a “broad enough view” of the possible misuse of its service and developer tools by bad actors.

Much of what Zuckerberg reiterated was what he and his lieutenants have been explaining for the past couple weeks of intense criticism and a falling stock price. But saying it on a national stage, under scrutiny of lawmakers, raised the stakes for the CEO, who had never previously given testimony in Congress.

Zuckerberg’s performance stood in sharp contrast to some public appearances earlier in his career, during which he stumbled with answers while perspiration glistened on his forehead. Since then, he’s grown more polished on stage and able to respond at length to questions as if he’s gone through a crash course in public speaking.

When Zuckerberg didn’t know the answer—and that was often—he told senators that his staff would provide more details later. It had the effect of diffusing some more detailed questions that could have opened Facebook to further scrutiny.

Several times during Tuesday’s hearing, Zuckerberg explained that an academic, Aleksandr Kogan, had misled Facebook about his true intentions in creating a personality quiz app on the social network that harvested user data. Kogan then sold that data to Cambridge Analytica, in violation of Facebook policies.

A few years ago, Facebook changed its terms of its service so that developers could no longer access as much data as before. But for many critics, it was too little, too late.

During the hearing, Zuckerberg directed blame away from Facebook to Cambridge Analytica, saying that his employees had been duped. Indeed, several senators questioning Zuckerberg seemed to take his side and expressed more anger at Cambridge Analytica than Facebook, which had such lax data sharing policies that it’s developer platform essentially operated on an honor system.

A few questions caught Zuckerberg off guard, including one by Sen. Maria Cantwell of Washington, who asked him if data analytics company Palantir scraped Facebook user data to allegedly aid Cambridge Analytica. Zuckerberg seem flustered by Cantwell bringing up Palantir, whose co-founder Peter Thiel is a Facebook board member, and responded, “I’m really not that familiar with what Palantir does.”

Ultimately, Zuckerberg apologized repeatedly for failing to foresee the Cambridge Analytica scandal, and promised that his company is working to prevent similar problems.

Investors appeared to be pleased with Zuckerberg’s performance on Capitol Hill after sending its shares down 15% over the past few weeks for its missteps. On Tuesday, the company’s shares rose 4.5% to $165.04.

Zuckerberg helped his case by reassuring senators that he’s willing to work with them on relatively low-impact legislation that would regulate how online companies handle user data and privacy. Tech companies are notorious for their opposition to regulation, but a small dose would give the industry cover while letting it avoid harsher oversight. Facebook has friends in several Republican senators, who repeated their party mantra that too much regulation would hamstring the next Facebook.

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If anything concrete comes out of Tuesday’s hearing, it may be that Facebook trims its terms of service, which a number of senators complained is too long and confusing. Zuckerberg replied that Facebook tries “to be exhaustive in the legal documents,” but that the company doesn’t “expect that most people want to read a full legal document.”

On Wednesday, Zuckerberg has another appointment with a House committee, where he will likely answer many of the same questions. If Tuesday was any guide, he’ll be able to avoid any major blows unless the representatives come armed with sharper questions and demand answers from him instead of his staff.

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Bad humour: China watchdog shuts Toutiao joke app over vulgar content

BEIJING/SHANGHAI (Reuters) – In China, a platform for risqué jokes is no laughing matter.

FILE PHOTO – The logo of Bytedance’s news feed platform Toutiao is seen as its building in Beijing, China October 21, 2017. Picture taken October 21, 2017. REUTERS/Stringer

Toutiao, a hugely popular news and online content portal that is luring investors, was forced to pull its joke sharing “Neihan Duanzi” app, literally meaning “implied jokes”, after a watchdog said it included “vulgar and improper content”.

The move comes amid a broader clamp-down targeting online content from livestreams and blogs to mobile gaming, as the country’s leaders look to tighten their grip over a huge and diverse cultural scene online popular with China’s youth.

China’s State Administration of Radio and Television ordered the app to be taken down permanently in a post on Tuesday for low values that had “caused strong disgust amongst netizens”. It urged Toutiao to regulate similar content on its other sites.

Toutiao, one of the country’s fastest-growing tech start-ups which was valued at around $20 billion last year, has been in hot water with regulators lately. Earlier this week, its main mobile app was also removed from a number of Chinese smartphone app stores following reports of increased censorship.

In a public letter titled “Apology and Introspection”, Toutiao founder Zhang Yiming pledged to raise the number of in-house censors – referred to as content auditors – to 10,000 people from 6,000 currently to keep its content wholesome.

“This product walked the wrong path and had content in deviation of socialist core values,” he wrote in the letter posted on his official microblog account on Wednesday.

Reporting by Pei Li and Adam Jourdan; Editing by Michael Perry

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Tech group urges U.S. to recruit allies to take on China, not tariffs

WASHINGTON (Reuters) – A trade group representing top technology companies on Monday told U.S. Treasury Secretary Steven Mnuchin that it opposes the Trump administration’s focus on tariffs to try to change China’s unfair trade practices.

U.S. Treasury Secretary Steven Mnuchin speaks during a news conference at the G20 Meeting of Finance Ministers in Buenos Aires, Argentina, March 20, 2018. REUTERS/Marcos Brindicci

The Information Technology Industry Council said in a letter to Mnuchin that it supports the Trump administration’s “Section 301” investigation into China’s abuses of intellectual property, but instead of tariffs, it advocates a U.S.-led international coalition to put pressure on Beijing.

“Our opposition to tariffs is pragmatic. Tariffs do not work,” wrote ITIC President and CEO Dean Garfield.

“Instead of tariffs, we strongly encourage the administration to build an international coalition that can challenge China at the World Trade Organization and beyond,” Garfield added.

“Numerous countries share the United States’ concerns about China and its unfair trade practices. The United States is uniquely well-situated to lead that coalition.”

Garfield called for such a coalition of allies to quickly travel to China to negotiate terms for a “balanced, fair, and reciprocal trade relationship.”

The group, which counts information technology hardware, software, services and social media companies from Apple Inc (AAPL.O) to Twitter Inc (TWTR.N), did not make any reference to the Treasury’s forthcoming investment restrictions on Chinese acquisitions of U.S. technology firms.

The restrictions are part of the remedies proposed under the U.S. Trade Representative’s Section 301 investigation, which alleges that China has misappropriated U.S. intellectual property through joint venture requirements that effectively force technology transfer, the use of state funds to acquire U.S. technology companies and other means.

President Donald Trump on Sunday predicted that China would take down its trade barriers, expressing optimism despite the escalating tariff threats between the world’s two largest economies that have roiled global markets.

ITIC said that it believed China had abused the privileges of its membership in the WTO.

“China has promised open and fair trade, but has instead promulgated rules, regulations, and practices aimed at encumbering non-Chinese companies,” Garfield wrote.

“This current approach cannot be sustained.”

Reporting by David Lawder; Editing by Robert Birsel

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Groups Allege YouTube Is Violating Law That Protects Kids

A coalition of more than 20 child-health, privacy, and consumer groups is asking the Federal Trade Commission to investigate whether YouTube is violating a federal law designed to protect children on the internet.

The groups are expected to file a complaint with the FTC on Monday. The relevant federal law, the Children’s Online Privacy Protection Act, or COPPA, requires website operators to obtain parents’ permission when collecting personal data about children younger than 13.

The complaint claims that a significant portion of popular content on YouTube is designed for kids, whose personal information—including IP address, geolocation, and persistent identifiers used to track users across sites—is unlawfully collected by Google and then used to target ads.

The complaint follows reports that some YouTube creators are targeting kids with disturbing videos, including some of kids in abusive situations. On Friday, BuzzFeed reported that the company will offer a safer, human-curated option for YouTube Kids, a version of the site for users under 13.

But the complaint to the FTC argues that most children aren’t watching YouTube Kids, which launched in 2015. They’re watching the same YouTube as the rest of us — and the company is aware of that, says Josh Golin, executive director of the Center of a Commercial Free Childhood, a nonprofit behind the complaint. The company could have moved popular children’s content like Peppa Pig or Sesame Street to YouTube Kids, says Golin, rather than leave videos where “kids are going to be exposed to data collection practices and be one click away from really disturbing content for children.” Human curation may be a good first step, “but changes to the YouTube Kids app do not absolve Google of its responsibilities to the millions of children that use the main YouTube site,” Golin says.

An ad for Barbie appearing on a child-directed video on YouTube’s mobile app from October 2017.

YouTube

A 2017 survey conducted by a market research firm specializing in children and families called YouTube “the most powerful brand in kids’ lives,” with 80 percent of American kids ages 6 to 12 using YouTube daily. A survey from October by Common Sense, another nonprofit group that signed the complaint, found that 71 percent of parents said their children watched YouTube’s website or app, whereas only 24 percent used the YouTube Kids app.

In a statement, a spokesperson for YouTube said, “While we haven’t received the complaint, protecting kids and families has always been a top priority for us. We will read the complaint thoroughly and evaluate if there are things we can do to improve. Because YouTube is not for children, we’ve invested significantly in the creation of the YouTube Kids app to offer an alternative specifically designed for children.”

YouTube’s terms tell kids under 13 years old not to use the service, so Google could argue that kids are watching with their parents and permission is implied. However anyone can watch videos on YouTube without an account. The complaint points out that kids often watch on a mobile device, likely by themselves. In 2015, the company said it launched YouTube Kids as a mobile app “because of this reality – that we’re all familiar with – 75 percent of kids between birth and the age of 8 have access to a mobile device and more than half of kids prefer to watch content videos on a mobile device or a tablet.” COPPA applies to websites that have “actual knowledge” that they are collecting or maintaining kids’ personal information, even if the collection is unintentional.

The complaint claims that YouTube’s advertising practices suggest that executives know children are watching. For example, Google Preferred, a premium service that helps advertisers place their ads in top videos on YouTube’s main site, includes the category “Parenting & Family,” which features channels like ChuChuTV Nursery Rhymes & Kids Song, which has more than 15 million subscribers.

Targeting kids can be lucrative. The complaint points to a popular YouTube channel called Ryan ToysReview, in which a 6 year old reviews toys. The site, which has more than 20 billion views, generated $11 million in revenue last year, according to Forbes.

Targeting Kids

  • After criticism about advertising to kids, YouTube Kids launched an ad-free version, available to parents, for a monthly subscription.
  • Facebook followed YouTube’s lead, launching an ad-free messaging app for kids as young as 6 years old.
  • Most of the experts who vetted Messenger Kids were paid by Facebook

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Feds Seize Backpage.com, Site Linked to Sex Trafficking

Federal and state authorities Friday seized Backpage.com, an online classifieds site frequently accused of facilitating sex trafficking, and reportedly indicted seven people. A notice on Backpage’s website said the site had been seized by the FBI and other agencies.

Nicole Navas Oxman, a spokesperson for the Department of Justice, said Friday afternoon that the agency would issue a press release after charges are unsealed, but things did not go as expected. “The Court has ruled that the case remains sealed and we have nothing to report today,” she wrote in an email Friday evening.

The banner states that the enforcement action was a collaborative effort between the FBI, US Postal Inspection Service, the criminal division of the IRS, the Department of Justice’s child exploitation and obscenity division, as well as attorneys general from Arizona, California, and Texas.

CBS News reported that an indictment had been unsealed against seven people allegedly involved in running Backpage, containing 93 criminal counts including money laundering and running a website to facilitate prostitution. The indictment, which was filed in Arizona where Backpage is maintained, names 17 victims, both adults and children, who were allegedly trafficked, according to CBS News.

On Friday morning, the FBI raided the home of Backpage cofounder Michael Lacey, and there was some activity at the home of cofounder Jim Larkin as well, according to the The Republic, a newspaper in Arizona. A year ago, the paper reported that a federal grand jury had been convened in Arizona to hear evidence against Backpage.

The move against Backpage came just days before President Trump is expected to sign a new anti-sex-trafficking bill that passed both houses of Congress with overwhelming support. The bill initially was controversial because it alters a key internet law that protects tech companies from liability for user-generated content on their platforms.

Previous criminal and civil charges against Backpage had mostly been derailed by that law, the Communications Decency Act. The bill Trump is expected to sign creates an exception for sites that “knowingly” facilitate or support online sex trafficking and explicitly grants states and victims the right to bring criminal and civil action against websites like Backpage. The bill faced opposition from tech companies, free speech advocates, and sex workers, and has already prompted online forums like Craigslist’s personal section and Reddit sections like Escorts and Sugar Daddies to shut down, rather than risk liability. Advocates for sex workers say the closures will endanger those workers, who relied on the sites to share bad date lists and verify clients.

It’s unclear why the federal agencies acted now. The Communications Decency Act did not apply to federal law enforcement agencies, said Eric Goldman, a law professor at Santa Clara University who testified against the recently passed bill. “The question is why today and why not two weeks ago before the Senate voted?” Goldman said. “The DOJ can’t turn on or off a federal prosecution on a dime, so that seems unlikely, but still the timing is so perplexing.” On Twitter, Goldman said, “It’s almost as if the government is trying to prove that all the anti-Backpage rhetoric fueling #SESTA & #FOSTA was just political theater.” (SESTA and FOSTA are acronyms for versions of the anti-sex-trafficking bill.)

Senator Richard Blumenthal (D-Conn.), who cosponsored the bill, called the DOJ’s action to shut down Backpage “long overdue.”

A January 2017 Senate report accused Backpage of facilitating online sex trafficking by stripping words like “lolita,” “little girl,” and “amber alert” from ads in order to hide illegal activity before publishing the ad, as well as coaching customers on how to post “clean” ads for illegal transactions. Judges in California and Massachusetts previously cited Section 230 in dismissing cases against Backpage.

Still, some sex workers said the seizure could endanger them. “If the people who run Backpage have knowingly harmed people, they deserve to be held accountable, but the most immediate impact of the seizure of an entire website will be felt by independent consensual sex workers,” Liara Roux, a sex worker, political organizer, and adult-media producer and director, wrote to WIRED. “Without safe online advertising, which studies seem to show reduced female homicide rates nationally by 17 percent, sex workers are unable to screen clients based on emails and decide who is safe to see.”

Backpage was invoked frequently in the debate around SESTA and FOSTA. Members of the Senate were particularly moved by testimony from Yvonne Ambrose, whose 16-year-old daughter, Desiree Robinson, was killed after she was repeatedly advertised for sex on Backpage. Last year, Ambrose sued Backpage for facilitating child sex trafficking. The documentary “I Am Jane Doe,” followed families in their quest to hold Backpage accountable.

Berin Szóka, president of TechFreedom, a nonprofit that has received funding from Google, says, the timing of the enforcement shows that the vetting process for the bill was rushed. “The argument for SESTA was a sham all along.”

Free Speech or Human Trafficking?

  • Within days of the bill’s passage, Craigslist, Reddit, and others shut personals forums, as sex workers had feared.
  • The bill could have encourage tech companies to either stop moderating or censor content, opening the door to further attacks on Section 230.
  • The backlash against big tech played a role in the passage of the bill.

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Australia begins privacy investigation into Facebook

SYDNEY (Reuters) – Australia on Thursday said it had begun an investigation to decide whether social media giant Facebook Inc breached its privacy laws, after the company confirmed data from 300,000 Australian users may have been used without authorization.

A 3D-printed Facebook logo is seen in front of displayed stock graph in this illustration photo, March 20, 2018. Picture taken March 20. REUTERS/Dado Ruvic

Personal information of up to 87 million users, mostly in the United States, may have been improperly shared with political consultancy Cambridge Analytica, Facebook said on Wednesday, exceeding a media estimate of more than 50 million.

In a statement, Australia’s privacy commissioner, Angelene Falk, said her office would “confer with regulatory authorities internationally”, given the global nature of the matter.

A Facebook spokeswoman in Australia said the company would be “fully responsive” to the investigation and had recently updated some privacy settings.

Facebook’s chief executive, Mark Zuckerberg, told reporters during a conference call that he accepted blame for the data leak.

Zuckerberg is due to testify about the matter next week during two U.S. congressional hearings, and the data breach has drawn criticism from lawmakers and regulators around the world.

London-based Cambridge Analytica, which has counted U.S. President Donald Trump’s 2016 campaign among its clients, disputed Facebook’s estimate of affected users.

It said in a tweet on Wednesday that it received no more than 30 million records from a researcher it hired to collect data about people on Facebook.

Australia’s investigation follows comments by New Zealand’s privacy commissioner last week that Facebook had broken laws in that country, a charge the company called disappointing.

Australia’s competition regulator is already investigating whether Facebook and Alphabet Inc’s Google had disrupted the news media to the detriment of publishers and consumers.

Reporting by Tom Westbrook; Editing by Michael Perry and Clarence Fernandez

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Japan state-backed fund INCJ to sell part of stake in Renesas: NHK

TOKYO (Reuters) – A Japanese state-backed fund plans to sell part of its stake in Renesas Electronics Corp, giving the chipmaker more freedom to make acquisitions as it seeks to bolster its global competitiveness, public broadcaster NHK reported.

FILE PHOTO: Renesas Electronics Corp’s logo is seen on its substrate at the company’s conference in Tokyo, Japan, April 11, 2017. REUTERS/Toru Hanai

The fund, Innovation Network Corp of Japan (INCJ), will reduce its stake to around 33 percent from 45.6 percent, NHK said on Tuesday, without citing sources.

INCJ plans to sell the shares through the market, according to the NHK report.

Renesas shares dived 8 percent following the report.

Representatives for INCJ were not immediately available for comment.

INCJ rescued cash-strapped Renesas in 2013 with an investment of 150 billion yen ($1.4 billion), and had received 69 percent of the chipmaker, but whittled down its stake as the company regained its footing.

Last month, INCJ agreed to sell a 4.5 percent stake in Renesas to auto parts supplier Denso Corp.

Renesas last year bought U.S. chipmaker Intersil Corp for $3.2 billion and its chief executive said it was constantly reviewing its list of potential acquisition targets.

Reporting by Chris Gallagher; Editing by Subhranshu Sahu and Sherry Jacob-Phillips

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