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Money Buzz 08/04

Tax code help, community-minded VCs and more
August 1, 2004
URL: http://www.entrepreneur.com/article/71774

Cracking the Code

You've got everything you need to run your business well-except a family member with the accounting know-how to advise you on navigating the tax code. Never fear. Your Uncle Sam has stepped up to the plate with the Taxpayer Education Communication (TEC) Small Business/Self-Employed Operating Division, a catch-all resource designed to demystify the tax code and what it means to your business.

With ample content on its Web site, the TEC isn't shy on information. Log on, and you'll gain access to such resources as business tax forms, along with a series of free instructional CDs and video workshops on issues like record-keeping, business use of the home, employment tax and electronic tax filing. That's the kind of help that may come in handy for those of you lacking the accounting expertise and resources you need to meet your tax obligations efficiently.

Feeling a bit Web-shy? You can also submit your tax questions by e-mail or by phone through the toll-free Business and Specialty Tax Line (800-829-4933). Maybe that tax code doesn't look so daunting after all.

Won't You Be My Neighbor?

Feeling shut out by the rapid-growth-obsessed VC circuit? Never fear, there's another breed of venture funding on the rise-and for these investors, the social benefit a venture will yield is just as key as financial returns.

Unlike traditional VC funds, community development funds (CDFs) seek first and foremost to invest in companies that will ben-efit low-income workers in distressed communities, explains Kerwin Tesdell, president of the New York City-based Community Development Venture Capital Alliance (CDVCA), which runs a community fund and also serves as a trade association for funds nationwide and internationally. "Fifty years ago, you could support your family and get benefits working for a manufacturing plant, but those jobs are disappearing," he explains. "CDFs invest in companies that will produce those jobs in the new economy."

While criteria and amounts vary, CDFs typically focus on a specific geographic region and invest from $50,000 to more than $1 million. The CDVCA Web site offers a list of funds by state, as well as each fund's mission and investment criteria.

CDFs are not to be confused with charities, however, says Tesdell. "Prospective ventures must also [have] a strong management team, a clear financial plan and an exit strategy," he says. "A lot of VC funds look for high-tech firms that produce jobs for three Ph.D.s and a secretary. Those aren't the kinds of businesses we look for."


The number of 401(k) plans offered by small businesses will rise
6.5%
this year to 410,285.
SOURCE: Cerulli Associates

87%
of small businesses expect travel and entertainment spending to increase or remain steady over the next 12 months.
SOURCE: MasterCard's "Small Business Economic and Spend Outlook Survey"



is a freelance writer in New York City specializing in business and finance.