Archives For Work

       Another way we can honor God through our work is by being good stewards. This applies to our personal finances as well, so we’ll be looking at it in more depth when we talk about stewardship. However, the concept of stewardship has strong implications for our work lives as well – whether self-employed or working for someone else.

Pay Attention!

       Proverbs provides good advice for any person involved in business, but especially those involved in managing or overseeing the operations:

       23 Know well the state of your flocks, and pay attention to your herds: 24 for riches are not forever, nor does even the crown endure to all generations.

Proverbs 27:23-24 (WEB)



       A good manager knows the condition of every aspect of the business he manages. Whether it’s your own business or someone else’s, you should be careful to pay attention to what’s going on. Being a good steward doesn’t mean you do just enough to get by. A good steward looks to maximize whatever has been put under his care – he wants to return it to his superior in a better condition than he found it. Being especially careful with things that belong to others in addition to our own things provides a strong witness that we care about the person those things belong to.

Be Faithful in All Things

       Jesus challenged us to be faithful in all things whether great or small. His teaching can apply to our business lives, our personal lives, and most definitely our spiritual lives.

       10 He who is faithful in a very little is faithful also in much. He who is dishonest in a very little is also dishonest in much. 11 If therefore you have not been faithful in the unrighteous mammon (money), who will commit to your trust the true riches? 12 If you have not been faithful in that which is another’s, who will give you that which is your own?

Luke 16:10-12 (WEB)



       In anything that is assigned to us, we should be honest and faithful regardless of how unimportant it may seem. We build trust with others by first proving ourselves trustworthy with small and seemingly insignificant things. Then we begin to build a stronger relationship and deeper trust as bigger and more important responsibilities are given to us. While those small things do not seem like they matter at first, how we handle them can have huge implications for our future relationships.

       Jesus’ teaching here applies to many different aspects of our lives – not just business – and most specifically it applies to our spiritual lives. Jesus goes on to talk about how we cannot serve both God and money. The way Jesus taught us to handle the money and possessions God has entrusted to us is vastly different from the ways of the world. Jesus teaches us here that if we cannot handle something so unrighteous as money according to His teaching, how can we expect God to give us true riches? We must prove to be faithful in the small things (money) in order to receive the greater things (the true riches of Heaven and eternal life).

       As we continue to examine God’s Provident Plan for our finances, we’ll see that He calls us to approach money and possessions with a mindset the world cannot understand. You see, the financial advice God gives us in the Bible can be applied successfully by anyone. Spend less than you earn, earn more, manage your money well, avoid debt – all of these ideas are good advice for Christians and non-Christians alike. But the results God desires – generous and sacrificial giving – are far different from the worldly views of retiring early, getting the car you’ve always dreamed of, living in a nicer home, traveling the world, or just doing anything you “deserve” because of your hard work and smart decisions. Following God’s plans to achieve His desire requires that you understand His plan and His view of the world and that you have a relationship with His Son, Jesus. You will never understand the idea of following God’s financial principles so you can give generously unless His Spirit lives in you.

       However, the rewards are vastly different as well. Instead of amassing worldly wealth that will pass away and do you absolutely no good when you die, you’ll inherit eternal life and true riches. You’ll take hold of that which is truly life and enjoy God’s creation as He meant you to. You’ll find the contentment in Christ that no one can take away from you. And that’s worth much more than any pile of cash you can put in the bank.

       I’ve gotten away from the main point here, but it’s important to understand what it really means to be a good steward and why we should even worry about how Jesus taught us to handle our finances. God wants us to handle money as if it doesn’t matter. He wants us to use it not to just make ourselves comfortable but to further His Kingdom. And that mindset of living sacrificially will lead us to follow all of His teaching on personal finances naturally. With His Spirit living in us, we will approach our spending and working with His love and understanding. And we’ll glorify Him with all of it.

       Next week we’ll finish up this study on work, and then I’ll put together a summary post for easy reference.

       God desires His children to be especially mindful of the poor. His love and mercy reach down to those in need and in struggles, so it is His love working through us that should prompt us to be quick to help the poor. We’ll look at this in much more depth as we examine God’s teaching on giving, but for now we can look at two specific ways we should treat the poor in our business and work.

Pay Them Quickly

       God gave a special law to the Israelites about how they should treat their hired servants who are poor. While we are no longer under the Law, these instructions can help us see at least one way we can be mindful of the needs of the poor. The poor who have no savings to tide them over to their next paycheck may be helped by receiving their paychecks more often. In the Law, God taught the Israelites to pay their poor hired servants every day.

       14 You shall not oppress a hired servant who is poor and needy, whether he be of your brothers, or of your foreigners who are in your land within your gates: 15 in his day you shall give him his hire (paycheck), neither shall the sun go down on it; for he is poor, and sets his heart on it: lest he cry against you to Yahweh, and it be sin to you.

Deuteronomy 24:14-15 (WEB)



       As I said before, we are no longer under the Law. But this commandment makes sense even in light of the New Covenant. If we have a poor person who works for us, it would be better to pay them more often because they need the money as soon as they can get it. This is especially true if it would help them avoid using a payday lender. There are other long-term solutions that could help them better manage their money, but this is an easy way to help them avoid the less desirable alternatives (payday loans, credit cards, etc.).

Do Not Show Favoritism to the Rich

       Many people respect the rich and treat them better than they would the poor. This could be because of what the rich have done for them in the past, or it could be because of what they think the rich could do for them in the future. Either way, such favoritism and respect based on net worth is not from God. Jesus taught us to “love our neighbors as ourselves”. He didn’t say “love your rich neighbors as yourself, and show a little love for the poor while you’re at it”. There’s no distinction between our neighbors – we are to love all people equally regardless of their position in this world or even whether they show us love. James provides clear teaching on how this applies in our churches, but it should apply equally in all areas of Christian life:

       1 My brothers, don’t hold the faith of our Lord Jesus Christ of glory with partiality. 2 For if a man with a gold ring, in fine clothing, comes into your synagogue, and a poor man in filthy clothing also comes in; 3 and you pay special attention to him who wears the fine clothing, and say, “Sit here in a good place”; and you tell the poor man, “Stand there,” or “Sit by my footstool”; 4 haven’t you shown partiality among yourselves, and become judges with evil thoughts?

James 2:1-4 (WEB)



       When we make distinctions between the rich and the poor, or any other distinction that affects how we treat people, we become judges and fail to follow Jesus’ teaching and His Spirit. The Spirit of Love shows no partiality among people but loves all the same. The application of this teaching can easily be seen for our business lives – we should give the same quality of service to the poor that we would give to the rich. I’m not saying the people should get what they don’t pay for, but they should be treated with the same respect, courtesy, and kindness regardless of how much they buy from us. We must never forget that all people are the work of God’s hands, and we should show no distinction among anyone when it comes to showing love just as God has shown no distinction in the gift of His Son. Job acknowledges the fact that all are made by God and He shows no favoritism:

       Who doesn’t respect the persons of princes, nor respects the rich more than the poor; for they all are the work of his hands.

Job 34:19 (WEB)



       When God looks at us, He sees each one of us individually and knows us personally. But He loves us all the same, regardless of how righteous or unrighteous or poor or rich we are. He seeks to reconcile all of us to Himself through His Son. It’s with this same love – this blind love – that His Spirit compels us to love our neighbors. This love is not blind to the needs of people, but it is blind to their faults and mistakes. Loving people like God loves them while looking after their needs means that we love the poor as we would anyone else and we do what we can to help them. So be mindful of the poor in your work, and show all people God’s love.

       In the last part of this series on work, we looked at God’s desire for us to treat each other honestly and fairly. But we also find a special emphasis on the fact that we should maintain this honest and fair treatment of others at all times. God provides no exceptions for Christians to be honest and just to anyone. Keeping your honesty and fairness at all times and sticking to a moral code is called integrity. God wants us to keep our integrity at all times, which will further strengthen our witness to the world and the success of our work.

Our Guiding Light

       When we keep our integrity in all situations, we are looking to God for direction. We are seeking out His ways so we can do His will. When we let the Spirit lead us in everything, work or play, we are keeping our integrity – our strict adherence to looking at what the Father is doing and wants us to do. It’s in this way that our integrity will be our guiding light.

       The integrity of the upright shall guide them, but the perverseness of the treacherous shall destroy them.

Proverbs 11:3 (WEB)



       The Bible tells us that our integrity shall guide us, but the perverseness of the treacherous shall destroy them. This is a powerful witness to the importance of keeping our integrity at all times. When we allow Satan to twist our thinking and turn our eyes away from God’s ways, we are walking down the path to destruction. And it doesn’t take much. It’s so easy to ruin our reputation, and Satan is glad to find a way to tarnish any witness we might have to the world. That’s why it’s so important to keep our integrity all the time – not just when we think people are looking.

       Many people, thinking no one was looking, have compromised their integrity to benefit themselves – often monetarily. We see this all the time in corporate, political, and even church scandals. But God tells us it’s not worth it. There is no amount of money worth compromising our integrity or risking our good name.

       A good name is more desirable than great riches, and loving favor is better than silver and gold.

Proverbs 22:1 (WEB)



       And again:

       Better is the poor who walks in his integrity, than he who is perverse in his ways, and he is rich.

Proverbs 28:6 (WEB)



       Though it may seem like maintaining our integrity – even when we don’t think it matters – will do little to benefit us here and now, following God in all things has immense benefits to our spiritual lives and will draw us ever closer to Him. It will also make our witness as Christians even more powerful – not because of the good things we’ve done, but because of the love God has given us and shows through us for all people. This love is shown greatly when we continue to treat everyone honestly and fairly no matter what the situation.

Keeping Your Integrity

       So how do we go about keeping our integrity. What can we do to make sure we don’t fall into Satan’s traps or become disillusioned by the false promises of riches? God gives us practical advice in this area:

       25 Let your eyes look straight ahead. Fix your gaze directly before you. 26 Make the path of your feet level. Let all of your ways be established. 27 Don’t turn to the right hand nor to the left. Remove your foot from evil.

Proverbs 4:25-27 (WEB)



       We need to keep our eyes focused on God. If we look to the side, Satan will rush in with excuses and reasons we should stray just a little this once. “It’s OK to cheat on your taxes…everyone does it, and the government will just waste the money anyway.” “It won’t hurt anyone if you take a little extra. Who will know?” If we keep our eyes focused on Jesus and His message, these thoughts will not be able to withstand the power of His love and teaching and we’ll be able to keep our integrity.

       God also tells us to make our path level. We should remove any obstacles, distractions, or temptations that might cause us to stumble as we try to walk in His ways. By doing this, we make it easier to keep our focus on Him alone. He also wants us to “establish” our ways. We need to make a habit of always seeking God’s will – a habit of always taking time to stop and let the Spirit teach us how God wants us to handle the situations we encounter. The simple act of taking some time to pray before acting can save us from so many dangers and sins.

       It’s clear that God wants us to be honest and just. But it’s equally clear that He wants us to be that way all the time. He wants us to keep our integrity – so we’ll become closer to Him, and so we’ll be even greater examples of the power of God’s love in our lives. Take time to consider how you can better keep your integrity and honor God with your life completely.

       After examining the Christian call to work hard, weighing the value of hard work and the dangers of laziness, and looking at our need for rest, I thought it best to look at the values and ethics that should guide us in our work. What are the principles we should follow to best glorify God in our work? In this and the next four parts of this Bible study, we’ll look at God’s business values and ethics.

Be Honest and Fair

       God hates dishonesty or injustice, and if we treat people dishonestly or unjustly we are not reflecting His glory. Though we are no longer under the Law, the Old Testament laws do help us understand some specifics of how we can best serve God.

       13 You shall not have in your bag diverse weights, a great and a small. 14 You shall not have in your house diverse measures, a great and a small. 15 You shall have a perfect and just weight. You shall have a perfect and just measure, that your days may be long in the land which Yahweh your God gives you. 16 For all who do such things, all who do unrighteously, are an abomination to Yahweh your God.

Deuteronomy 25:13-16 (WEB)



       In our business with people – all people, not just other Christians – we are to give them exactly what we say we will and what they’re paying for. While we no longer have weights we carry around to figure out how much we’re selling someone or how much money we’re giving or receiving, the principle still applies. We are not to cheat people in any way. In the same way, we are not to lie to avoid paying what is due or to avoid giving help when someone needs it.

       27 Don’t withhold good from those to whom it is due, when it is in the power of your hand to do it. 28 Don’t say to your neighbor, “Go, and come again; tomorrow I will give it to you,” when you have it by you.

Proverbs 3:27-28 (WEB)



       God doesn’t want us to use dishonesty in any way in our business or our lives. He loves to see us treat each other honestly and fairly, for He is truth and cannot stand lies.

       Lying lips are an abomination to Yahweh, but those who do the truth are his delight.

Proverbs 12:22 (WEB)



       One area we might blur the truth a little is when we’re trying to haggle or negotiate a lower price. God has no problem with us trying to pay a little less, but He doesn’t want us using lies to do it.

       “It’s no good, it’s no good,” says the buyer; but when he is gone his way, then he boasts.

Proverbs 20:14 (WEB)



       We shouldn’t lie about the item we’re buying to get a lower price. I’ll be the first to encourage you to get the lowest price you can, but don’t lie to a seller to do it and treat him unfairly. As we’ll see in a bit, we should treat people exactly the way we’d want them to treat us. So when you’re buying, treat the person the way you’d want people buying from you to treat you. And if you’re the seller, treat the buyer like you’d want sellers to treat you.

       No one likes to be ripped off. Part of being fair and honest is to only charge a fair price and to take no more than is actually due. John the Baptist taught this principle to the tax collectors of his day, who were notorious for taking more than they were actually supposed to:

       12 Tax collectors also came to be baptized, and they said to him, “Teacher, what must we do?” 13 He said to them, “Collect no more than that which is appointed to you.”

Luke 3:12-13 (WEB)



       We shouldn’t charge people more than what’s fair. Part of our Christian witness would be speaking up when this happens as well. If your employer is doing these things, it’s not right for you to do them just because you’re told to or because everyone else is. We are judged not by men, but by God. If we are to work as if we’re working for the Lord, that also means that the actions we take at work should glorify God.

       We must also remember that God wants us to use these business values with all people – not just those we like or agree with.

       For there is no partiality with God.

Romans 2:11 (WEB)



       God has shown no partiality in the gift of His Son. The blood of Jesus is available to all who call upon Him for salvation and redemption from sin. If God has so generously shared Jesus with all people, it is clear that He does not want us to treat anyone with partiality. We should treat all people equally with the same honesty and justice God requires of us.

How to Always Be Fair and Just

       There are many more aspects to being honest, fair, and just than the things that are covered in Scripture. And we might tend to forget them if we try to memorize a bunch of “rules”. But Jesus came preaching a message that fulfilled the Law, and the Holy Spirit teaches us how to glorify God more and more each day. So how can we remember to be fair to everyone and always know that we are being just? Jesus told us how to fulfill the whole law, and in Galatians Paul repeats the part that dictates how we treat other people:

       For the whole law is fulfilled in one word, in this: “You shall love your neighbor as yourself.”

Galatians 5:14 (WEB)



       Jesus even explained how we are to love our neighbors as ourselves. We know this as the “Golden Rule”, and it is the guiding force for all of God’s business values and ethics.

       Therefore whatever you desire for men to do to you, you shall also do to them; for this is the law and the prophets.

Matthew 7:12 (WEB)

This scripture is also found in Luke 6:31.



       By treating people the way we want to be treated, we’re loving them just as we love ourselves. If we follow this principle and let the Spirit guide us, we’ll never be unfair or unjust. We’ll always be honest because we want people to deal with us truthfully. We’ll never rip people off because we’d never want to be ripped off ourselves. And we won’t discriminate in our honesty and fairness because we wouldn’t want to be subject to discrimination either – especially when it comes to truth and justice.

       And the Spirit compels us not only to treat people as we treat ourselves, but to treat them even better than we’d deal with ourselves. Paul explains this to the church at Philippi in this way:

       3 …doing nothing through rivalry or through conceit, but in humility, each counting others better than himself; 4 each of you not just looking to his own things, but each of you also to the things of others.

Philippians 2:3-4 (WEB)



       Our culture tells us we only need to look out for ourselves – the “every man for himself” idea. But Christians are called to look out for others just as we look out for ourselves. We are to go so far as to count others as better than ourselves. I can assure you that if we truly follow Jesus’ teaching and Paul’s explanation here, we will glorify God in all that we do. All of God’s values and ethics are tied up in the two greatest commandments as Jesus explained. We are to love God with all our heart, soul, and mind, and we should love our neighbors as ourselves. Everything hangs on these two commandments. We cannot keep them ourselves by our own power, but the Holy Spirit can do it through us and make us a powerful witness to the whole world.

Death and Taxes - The only sure things!       Some people think starting a “business” so they can put losses on their tax return is a good way to reduce their taxes. The idea is that you’ll reduce your taxable income, which in turn reduces your taxes and can make you eligible for some credits or deductions that you couldn’t get before. Others think it can be a good way to write off personal expenses as “business” expenses and save some taxes that way.

       But the IRS caught on to this idea a long time ago and there are specific regulations in the Internal Revenue Code to prevent this kind of abuse. Specifically, section 183 of the code limits the deductions that can be taken when an activity is not being carried on to generate a profit. If the IRS determines that your activity is not being engaged in for a profit, then your allowable deductions will be limited to your gross income from the activity – thus eliminating the opportunity to offset your other income with losses.

       This section of the law, called the “hobby loss rule,” can throw a wrench in your business plans if you’re not careful. However, a little knowledge will go a long way in protecting you from breaking this rule accidentally and suffering the tax consequences. Here’s what you need to know.

What Is the Hobby Loss Rule?

       If you’re carrying on an activity that isn’t for profit, you cannot use losses from that activity to offset other income you might have. Basically, the IRS will limit the allowable deductions you take against your income from the questionable activity so that you can’t claim a loss.

What’s So Bad about Breaking the Hobby Loss Rule?

       If your business is found to be a hobby rather than a legitimate business, several bad things happen. First, your gross income from the business is included as “Hobby Income” which goes above the line and increases your adjusted gross income (AGI). This can have several unfortunate effects like making you ineligible for certain tax credits or phasing out some deductions. It also makes it more difficult to take deductions for your hobby expenses because…

       Second, your “business expenses” will not be allowed as business expenses. Since your business is considered a hobby, you have to take the expenses on Schedule A as an itemized deduction just like any other hobby expenses. These are considered miscellaneous deductions, which are subject to a floor of 2% of your AGI. This means you only get to start including the deductions after they exceed 2% of your AGI. Remember how you had to add your gross income above the line? Yeah, this is where it can hurt. Even worse, if your itemized deductions (these hobby expenses plus your other deductions like medical, taxes, charitable, etc.) aren’t more than your standard deduction, then you don’t get any benefit from your expenses at all.

       Finally, you’re not allowed to take a loss from your hobby activities. You can only offset all your income. Once you’ve done that, the rest of your hobby expenses are disallowed and cannot be used in future (or past) years. Tough luck.

Who Is Subject to the Hobby Loss Rule?

       Nearly every single type of business is subject to the hobby loss rule. If your business is structured as a sole proprietorship (individual using Schedule C), partnership, S corporation, an LLC taxed as any of those, or an estate or trust, then you need to be thinking about the hobby loss rule. The only business structures not subject to the rule are C corporations and LLCs that have elected to be taxed as a C corporation.

       So if you’ve started a little informal business on the side to earn some extra income, you need to be aware of the hobby loss rule and how to avoid breaking it.

How Can You Prove That You’re Running the Business to Make a Profit?

       There are two ways to prove that your business activity is actually for profit. First, there’s the presumption rule. If your business shows a profit for three out of five consecutive years, the IRS is required to presume that your business is for profit and not just designed to generate losses.

       So you can have losses for two years out of five and not have to worry about the hobby loss rule. If the IRS wants to make the case that your business is not for profit even though you meet this presumption rule, then the burden of proof is on them – not you. (And just to complicate things a bit…if your business primarily involves breeding, showing, training or racing horses, then you only need to show a profit in two out of seven years to meet the presumption rule.)

       I should add here that it is illegal to manipulate your income or expenses to try to meet the presumption rule. You are required to report all income and all eligible expenses for your business activities. This is something auditors will look for if you are audited and have reported business income on your tax returns. The reason you are required to report everything is because some people falsely report business income in an effort to manipulate their tax refunds (for things like the Earned Income Credit). The IRS doesn’t like this (because it’s illegal!) and specifically looks for people who might try that sort of thing…so just don’t do it. OK? :)

       The second way you can show your business is being run to make a profit is to prove it by the facts and circumstances. This comes in handy if you are honestly trying to make a profit but still end up showing losses in more than two years out of five. Here are the factors the IRS considers when determining whether you’re engaged in the business to make a profit:
 

  1. Are you running the business in a way that’s focused on making a profit? If you’re generating losses, have you been trying new methods to make a profit?
  2. Do you have the knowledge needed to make a profit in this business, or are you working with advisers who have that knowledge?
  3. Does the time and effort you’re putting into the activity show that you intend to make a profit?
  4. Do you have assets used in the business that can be expected to increase in value?
  5. Have you had success at making a profit in similar activities in the past?
  6. What does the history of your profits and losses look like for this business? Could it be considered suspicious or is it typical for this type of activity? Are the losses from the start-up phase? Are the losses due to circumstances beyond your control?
  7. Have you made a profit from the activity in some years?
  8. Do you depend on income from this activity for your finances?
  9. Is this activity purely for personal pleasure or recreation?

 
       No single factor controls whether your activity is for profit or not. The IRS has to weigh all the objective facts in making a determination, and they can’t make assumptions just because the number of factors showing your activity is not for profit outweighs the number showing it is for profit.

       It all comes down to the facts at hand, so the more you can do to show that it’s a legitimate business the less you have to worry about. Things like having a separate bank account, keeping good business records, advertising your business, tweaking your business to improve profitability, and spending a significant amount of time working on the business will all work to your advantage.

Public Service Announcement

       If you think you’re getting crafty with the IRS, don’t be so sure of yourself. I can assure you that they’ve seen just about everything by now, and their job is to make sure people are paying all their taxes according to the law. They’re not “out to get you,” but they aren’t going to let you cheat on your taxes either. Don’t try anything fishy, and you don’t need to worry.

       And if you’re trying to be honest and just didn’t realize these laws applied, then you might want to consider hiring someone to help you with your taxes. At the very least, you need to sit down with someone knowledgeable in this area so they can help you understand what you should know. The IRS doesn’t take “I didn’t know.” as an excuse. You’re responsible for understanding which tax rules you’re subject to and making sure you pay the taxes you owe. Failing to due so is known as negligence and doesn’t exempt you from penalties and fees.

       If you have any questions, let me know in the comments below and I’ll try to help you!

(photo credit: lucyfrench123 on Flickr)

This article was included in the Carnival of Personal Finance.

       God wants us to rest not only to remember Him but also because we need to rest. He knows it’s good for our bodies and minds to rest – especially after a period of hard work. God wants us to be ready for His work when the time comes, and that requires regular periods of rest from our work.

In the Image of God

       After creating the universe and all that is within it, God rested from His work:

       2 On the seventh day God finished his work which he had made; and he rested on the seventh day from all his work which he had made. 3 God blessed the seventh day, and made it holy, because he rested in it from all his work which he had created and made.

Genesis 2:2-3 (WEB)



       In light of God’s actions, it makes perfect sense that our bodies and minds require rest after periods of hard work. We are created in the image of God, and we, as Christians, are called to be holy as He is holy. We are to copy what we see God doing. When we rest after working hard, we are not being lazy. We are doing what God created us to do. It is for our own good that God gave us His example of resting and even commanded us to rest.

For Our Own Good

       God wants us to rest so we’ll be refreshed. But He commands us to rest for our own good. He knows that it’s easy for our work to overtake our lives to the point that we neglect Him and our families. His command to rest is an important reminder that we need to rest.

       Six days you shall work, but on the seventh day you shall rest: in plowing time and in harvest you shall rest.

Exodus 34:21 (WEB)



       I live in a very agricultural area, and I’ve seen firsthand why God added the “in plowing time and in harvest you shall rest” part to His command. When it’s time to plant, farmers have all their regular work to do on top of plowing or getting the fields ready, fertilizing, and planting seeds. And when it’s time to harvest, farmers usually need to harvest the entire crop in a short period of time – again, in addition to their regular work. It’s easy to feel like you’ve got to keep working all the time during planting time and harvest time because there is so much work to do.

       And farmers aren’t the only ones who have busy times like this. We all experience times in our work when there’s more work to be done than the days will allow. But God tells us that it doesn’t matter how much work we have to do, we need to take time to rest – to refresh ourselves and to remember Him. As long as we are fulfilling God’s call to work hard, rest is necessary to ensure that we stay healthy and sane, continue to do a good job, and don’t let our work overshadow God.

Working Too Hard

       It’s very important for us to remember that while God wants us to work hard He also wants us to rest. We can work too hard. When we work so much that we forsake God and believe our success is completely in our hands, we are working too hard. God wants us to maintain a healthy balance between working hard and resting when needed. We sometimes think that if we just work harder we’ll find the success we seek. But God wants to bless us if we’ll just rely on Him. Part of relying on God is doing the hard work He calls us to, but the other part is taking the rest He wants us to.

       It is vain for you to rise up early, to stay up late, eating the bread of toil; for he gives sleep to his loved ones.

Psalm 127:2 (WEB)



       When we work hard and rest as God wants us to, God promises to bless us and meet our needs. When we start to doubt God’s promises and begin to work ourselves to exhaustion in an attempt to do it all ourselves, we wear ourselves out for nothing.

Jesus’ Examples

       During His time on Earth, Jesus gave us many examples of our need for rest. When the Twelve disciples returned after Jesus had sent them out to preach, there were so many people coming and going that they didn’t even have time to eat. Jesus told them to go away and rest for a while:

       31 He said to them, “You come apart into a deserted place, and rest awhile.” For there were many coming and going, and they had no leisure so much as to eat. 32 They went away in the boat to a deserted place by themselves.

Mark 6:31-32 (WEB)



       The disciples had done the work that Jesus had asked of them, and now He wanted them to rest and refresh themselves. Jesus had more work for the disciples, but He needed them to rest so they could be ready for the work. In our secular work or church work, we must take time to rest. It’s clear that if Jesus told His disciples to take time to rest, He’d want us to do the same.

       Jesus also took time to rest and refresh Himself. Various times during His ministry, Jesus would try to go away to a secluded place to take rest. But because the people heard of His teachings and miracles, He could not escape the crowds. Here’s just one example:

       From there he arose, and went away into the borders of Tyre and Sidon. He entered into a house, and didn’t want anyone to know it, but he couldn’t escape notice.

Mark 7:24 (WEB)



       There are several other examples where Jesus tried to get away from the crowds and take time to rest and pray. His example clearly demonstrates that it would be wise for us to do the same. We need to take time away from our work, no matter what it is, to rest and refresh ourselves and to spend time in prayer and reflection.

       We’ve looked at how God has called us to work hard, the value of hard work, the dangers of laziness, and our need for rest. We’re going to finish up this Bible study on work by looking at God’s business values and ethics. What are the principles that should guide our work? The next five parts of this series will look at the answers to that question.

Crunching Numbers for Your Small Business       Recently, I had a client ask me for a spreadsheet to help her track her business expenses. I put together an Excel spreadsheet with columns for all the information you need to track business expenses for Schedule C. I also put together a guide to help her know which categories to choose for each item so it’ll correspond to the tax return. I made all of this general enough so I can use it with other clients, and I thought some of you might find it useful for your own businesses.

       Before I get into explaining the spreadsheet, let me just add that you’ll still need to have records like receipts and bank statements to back up the expenses you claim. If you want to learn more about recordkeeping requirements, I’d recommend reading IRS Publication 583 and Publication 463.

Free Spreadsheet for Tracking Your Business Expenses

       To use the spreadsheet, you’ll need to have Microsoft Excel, Microsoft Office, or Open Office (which is free!). I thought about uploading it to ZohoSheets, but I’m not sure if the conditional formatting will work on there.

       You can download my free spreadsheet for tracking your business expenses by clicking here or on the picture below. (Try right clicking and selecting “Save as…” if it tries to open inside your browser.)
 

Free Spreadsheet to Track Income and Expenses for Schedule C

 
       You’ll see three tabs. Ignore the “Categories” tab. I used it simply for formatting the drop down list on the “Income and Expenses” tab. The other two tabs are pretty straightforward. “Income and Expenses” is for tracking…income and expenses. “Mileage” is for mileage.

       There are 365 rows in each of the tabs you’ll be using. If you want to add more on the “Income and Expenses” tab, simply highlight the entire last empty row and hit Ctrl+c. Then highlight the rows you’d like to copy it to. From the ‘Edit’ menu select ‘Paste Special’. Be sure ‘All’ is selected, then click ‘OK’. The reason you need to do it this way is so the conditional formatting will be copied over.

Income & Expenses

       To track your income and expenses, list each item/transaction separately on the “Income and Expenses” tab. If you buy several different things at a store, group them by category rather than lumping them together. Put the date in column A. Choose a category for each item in column B (according to the definitions below).

       If you choose “Other Expenses”, then column C will change from black to white. You’ll then want to type in a subcategory for that item in column C. Try to use the same subcategories for similar items as much as possible and don’t make them too specific (just enough to make it clear what it is) – it will make tax time easier. You can use the other categories as an example for how broad/narrow to make your subcategories.

       In column D, enter a more detailed description of the item so you will be able to match it up to a bank statement or receipt if necessary. Finally, enter the total in column E if it’s income or column F if it’s an expense. The final column will update automatically.

       Here are descriptions of how you should use each category. It’s long, but it will help you track your expenses in a way that will fit right into your tax return. That will save you time and money, so take a little time to understand these categories.
 

  • Income – Assign this category to all sources of income. Although there are some types of income that would be considered “other income” on Schedule C, you’re likely going to need help from a professional if that’s an issue for you. I’d recommend reading through the instructions for Schedule C (particularly page 4) for more information. Actually, you should read through it anyway.
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  • Advertising – Include advertising and promotional costs like print or media ads, business cards, mailers, brochures, signs, pens, and give-away items with the company name, samples, or freebies to promote your business in this category. Also, include any sponsorships like buying an ad in a high school sports program to promote your business.
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  • Car & Truck Expenses – You can deduct actual costs for operating your car or truck in your business, or you can take the standard mileage rate ($0.50/mile in 2010). If you choose to take the standard mileage right (and you’re eligible to do that), then the only thing you’ll include here are your parking fees and tolls. If you want to deduct actual costs, then include the cost of gas, oil, repairs, insurance, depreciation, or your tags here. For most people, it’s simpler and better to just go with the standard mileage rate.
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  • Commissions & Fees – If you pay any commissions or fees to non-employees, include them here. Things like sales commissions or finder’s fees would be most typical.
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  • Contract Labor – If you hire a contractor to handle something for your business, put the cost in this category. The key is that they can’t be considered an employee. This depends on the nature of your relationship with the person and relative control over their work. Get advice if you’re not sure how to handle this.
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  • Depletion – This probably won’t apply to many people. It relates to using natural resources within your business (like timber or minerals).
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  • Depreciation & Section 179 Expense Deduction – If you buy a major item for your business, you can write off some of the cost each year (depreciation) or write it off all at once (Section 179) with limitations. Keep good records of what you buy and how much business use it gets. This area can also get tricky, so read those instructions for Schedule C and get help if you need it.
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  • Employee Benefits – This only applies if you hire employees. In that case, you’d include things like health, life, or accident insurance premiums here. You’d also include dependent care, education assistance, adoption assistance, employee rewards, and any other benefits you pay your employees. It would not include benefits for yourself.
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  • Insurance – This covers insurance for your business and for the operation of your business – not your personal insurance. Examples would be liability, fire, theft, robbery, flood, hail, volcano, etc. Also, note that it doesn’t include your health insurance as that goes under adjustments to income if you’re eligible.
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  • Interest (Mortgage or Other) – This includes interest on loans to finance your business, credit card interest and fee charges for business expenses, and interest on a loan for property used in your business. Separate it out depending on whether it’s mortgage interest or other (anything else).
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  • Legal & Professional Services – Fees for tax advice, tax preparation, legal advice, and so on go here. But for tax prep you can only include the cost of preparing the Schedule C, C-EZ, SE, 4562, 8829, and accompanying worksheets because they are directly rated to your business. Your tax preparer can help you figure this out if you use one.
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  • Office Expenses – This covers office supplies for your business: ink, paper, toner, pens, staplers and staples, paper clips, folders, postage, and so on.
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  • Pensions & Profit-sharing Plans – This will only apply if you have employees and offer these benefits. If you do, then you should already know what’s required. If not, you need to hire a professional.
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  • Rent or Lease – You have two choices here. One is for leasing a “vehicle, machinery, equipment” and an option for “other” (like payments for an office rental, rental of other spaces for storage, and anything else that doesn’t fit in the first choice). These can get complicated depending on what you’re renting or leasing. Be sure you know the rules or get help.
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  • Repairs & Maintenance – This one refers to cost of labor, supplies, and any other items that do not increase the value or life of your business property (stuff you use in the business). So you’d included the cost of fixing something that broke or the costs of maintaining it. If you did it yourself, you cannot pay yourself and then deduct the labor. If you replaced whatever broke with something new, you need to put that under a new purchase – depreciation/section 179 for a big item, office expenses or supplies for a small item.
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  • Supplies – Use this to cover other small items you use in the business that don’t fit in office expenses. If it’s a higher ticket item or something you’ll use for more than a year, it will need to go in the depreciation/section 179 category.
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  • Taxes & Licenses – This category includes certain sales taxes, real estate and personal property taxes on business assets, licenses and regulatory fees for your business, the employer’s share of Social Security and Medicare taxes for your employees, federal unemployment taxes, federal highway use taxes, and state unemployment or disability taxes. This can also get complicated so be sure to check on the rules if this applies to your business.
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  • Travel OR Meals & Entertainment – Travel means you were away for business purposes at least overnight. it could apply to something like a convention, seminar, or visiting a client as long as it’s business related. It can even include cruises if they meet certain requirements (still has to be business related like a conference or something). Meals and Entertainment must have a business related purpose, and entertainment can only count if you’re actually able to get some business done with the client (it can’t be so distracting as to make doing business impossible). There are some other specifics you need to understand before claiming any of these, so definitely read up on the rules here.
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  • Utilities – You can only deduct utilities directly related to your business. The full cost of a cell phone for business use only or the portion of your cell phone bill attributable to business use would go under this category. Any other utility expenses would also go here (gas, electric, oil, etc.).
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  • Wages – If you have employees, you’ll put their salaries and wages in this category. Do not include your own wages/salary here. Also, you have to reduce this amount by any employment credits you claim. If you’re going to hire employees, you better know what you’re doing or be ready to hire a professional to help you.
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  • Other Expenses – Anything that doesn’t fit in one of the above categories goes here. Assign a subcategory that is not too broad or too specific (see any of the others for examples). Items here have to be spent for your business, and they need to be things that are ordinary and necessary (useful) in your particular business. As long as it’s reasonable, you don’t need to worry too much about it. But if you’re going to push the envelope, then make sure you can prove its business use or seek help from a tax professional for verification.

 
       Got all that?! You’ll probably need to read over it a couple times and think about your situation to see what you need to remember the most. If you really get stuck, don’t be afraid to hire a good tax professional for help. It’ll be more than worth the penalties you could face if you’re wrong!

Mileage

       Tracking your mileage is a little more straightforward. Enter the starting mileage on your car in cell C1 at the beginning of the year. At the end of the year, you’ll enter the ending mileages. If you use two different cars, keep track of the starting and ending mileages for each car.

       Record each trip separately. You can combine round trips into a single entry if you like – just make it clear in the description. Enter the date in column A. Enter the total mileage driven for business purposes in column B. Enter your destination in column C and make it specific enough that you can recalculate the mileage in the future if needed. It’s a good idea to enter the starting point and destination to make this easy.

       If you make multiple stops in one trip, I’d separate out each leg of the trip. For instance, you go from your home (where you run your business) to Bob’s house, then from Bob’s house to Susie’s house, and then from Susie’s house back to your home. Assuming Bob and Susie are both clients/customers, I’d do three separate entries:
 

  1. Mileage from my home to Bob’s house
  2. Mileage from Bob’s house to Susie’s house
  3. Mileage from Susie’s house to my home

 
       It might seem silly, but it will be a better set of records than a single entry that says “home, Bob’s, Susie’s, home”.

       Finally, include the business purpose of the trip in column D. It doesn’t need to be extremely detailed, but it needs to be clear enough to show that it’s business related. This will vary depending on your particular business, but it should be pretty simple to figure out. Don’t forget to include trips to pick up supplies for your business. You don’t have to be earning income to count the trip.

Using This Spreadsheet for Your Taxes

       By using this spreadsheet to track your income and expenses by category, you’ll make tax time a lot easier (for you or your tax preparer). Easier means less errors, less time, and less money to spend. With a little Excel know-how, you can easily sort your income and expenses by category and quickly come up with the grand totals needed for your tax return (using a copy of your original file, of course…). Keep this spreadsheet along with copies of your bank statements, receipts, and invoices, and you should have easy access to your records if you ever need them.

Business Use of Your Home (Home Office Expenses)

       I didn’t cover the expenses you can deduct for the business use of your home (home office expenses) or include it in my spreadsheet. The reason is that this can get complicated and the rules are very specific. In fact, unless the area you use for your business is exclusively used for business, you don’t need to be thinking about taking this deduction. You won’t qualify. If you can take this deduction, you’ll need to read up on Form 8829 and the requirements elsewhere.

Complicated Businesses

       If your business is complicated, this free spreadsheet probably won’t work well for you. If you keep an inventory and sell stuff you produce, you’ll need to track cost of goods sold as well. I didn’t include that here because that adds even more complications. It’s not a difficult concept to grasp or item to track, but I just didn’t include it here. You can easily add another tab to track that if you need to.

       But honestly, if your business is more than slightly complex, you can really benefit from hiring a tax professional to help you out – at least for the first couple of years. Study your tax returns, read the laws and rules, and you might be able to handle everything yourself. But be sure you really understand it because the penalties can be severe if you try something fishy.

Questions?

       If you’ve got any questions, leave them here in the comments and I’ll try to help you. If it’s an insanely complex question, don’t be surprised if I tell you to go hire a professional. And finally, please remember that this is all general advice. Your particular situation could require a different approach and I can’t know that without having all the relevant information.

(photo credit: Crispin Semmens on Flickr)

This article was included in the Best of Money Carnival.

This article was also included in the Festival of Frugality.