Saturday, December 21, 2013

Tax Write-Offs For Security Professionals

Prepare for year-end taxes at the beginning of the year

Writing off expenses is incredibly helpful way to for a consultant or other self-employed security business entity to decrease the tax burden. As traditionally ethically minded professionals, we understand that we must pay what we owe. Understanding how to claim deductions or what to claim is a little trickier. However, it’s an important and sometimes time consuming part of doing business.

In all cases, consult the IRS and a tax accountant as often as necessary. I've found both resources very helpful and patient in leading me through what I thought were difficult questions. The challenge of collecting sales tax and reporting income tax is difficult at first, but it is part of doing business, and is a must for maintaining that business. Failure to do so could result in fines or worse. Doing the right thing will help you better sleep at night, and increase your business savvy.

What expenses can be “written off”

There are myriad expenses that self-employed professionals can right off. However, I would issue a word of caution: speak with the IRS, state and local sales tax representatives, and tax accountants. The laws are not always clear, so any research you do can only help to solidify your responsibilities while also dispelling any rumors you may be hearing concerning taxes.

I decided to increase my knowledge of what expenses I can write off after going to a new business orientation sponsored by our state and local tax office. The orientation was very helpful as it allowed me to ask specific questions concerning sales tax, who I should tax and how to do so. Though I initially engaged with fear and trepidation, I left with only some frustration about having to pay privilege business tax, but a whole lot of confidence in how to manage sales. This piqued my curiosity to discover what could actually be a write off expense to lower my tax burden. Since then, I've filed my sales taxes on time and with little difficulty and have learned what I can do to reduce my tax burden.

So, what can security professionals write-off?

Self-employed professionals can write of anything that justifiably supports the profit making business. Red Bike Publishing, my publishing company has many moving parts, which I have to maintain. Though I've written Get Rich in A Niche to teach publishing and marketing books for little or no expenses, there are costs that lead authors to book products that should be tracked and added as expenses during tax filing. These include research, business development, doing business, supplies, and equipment. The same write-offs may apply to those of you who are not self-employed, but work as full time company employees. Paying out of pocket to support career enhancement opportunities, training, business development, supporting charities or business development often qualifies as a tax deduction.


Certification is part of what may make your security business attractive. More and more security professionals are becoming certified. Certification requires preparation and final testing. The books, study resources, test fees, professional organization fees and other costs add up. However, these costs can be tax deductible in most circumstances.


I currently have a book idea that is maturing. I've been working on it for about a year and soon will have enough experience and know how to present this idea as a book. The topic is exercise and how to prepare to be competitive in popular race events called mud runs. In this book I demonstrate how I was able to shave off six minutes from my performance over five kilometers of mud and obstacles. I also update, a blog that supports the upcoming book and is packed full of exercises. Hopefully this book and blog will help people in average physical condition improve their performance and increase their personal record. This type of book requires preparation, going to events and other research, and that research requires resources. I am keeping track of my fuel, room and other expenses required to make it to the events.

Similarly as a self-employed security professional, you could be involved in career building research, such as NISPOM or ITAR training. You might attend conferences to improve your skills and keep current with the latest industry information. This is a necessary expense to remain cutting edge and relevant as you provide products and services to your customers. They demand the best and you want to meet that demand.  You can write off the cost of research.

Business Development Costs

In effort to increase sales, you might have to advertise, join subscription services that manage your communication, set up a booth at a professional conference, join a professional organization or network to get the word out. These expenses do help generate revenue, but can be deducted as they also chew into your profit. Entertaining clients such as potential customers can be written off as well. You should document these events with dates and receipts and be prepared to show a relationship to your business. You might also account for the cost of attending conferences, giving out pamphlets, capability demonstrations and etc. Businesses need a point of sale and this includes website development and hosting. Also, shopping carts are needed for taking payments online and these also have associated fees. Business cards, marketing efforts, client dinners and other business developing and marketing costs should also be captured.

Cost of Doing Business

Website maintenance, email, newsletter services, advertisement, supplies, printing costs are just a few costs authors and book sellers may face.


Paper, pens, pencils, markers and other expendables associate with your writing should be annotated. These expenses should be tracked and documented for tax returns. Most professionals write and store files on the computer. A related expense is printer ink, so don't forget to add it. Fuel is also an expense for business related errands. Be sure to have a log that lists the distance driven and a date at the minimum. The IRS will give a cost per mile credit of 56.5 cents per mile.


Computers, printers, and publishing services are some relevant costs with getting a book to market. These are usually sunken costs that go into preparing a book for market. These expenses can be claimed for tax purposes both as an expense and as depreciation. Some printers have built in capability to fax, copy and scan. Be sure to keep receipts for any equipment that you use for book publishing purposes. Post office box fees should be itemized as well.

It's hard enough to make a living writing for a living or running any other type of business. Expenses add up quickly and taxes should be filed on time. The good news is that much of your hard spent expenses can be itemized for tax deduction. This article discusses but a few expenses you might write off. Be sure to check local laws as well as those that allow for deductions. It's worth the effort.

Jeffrey W. Bennett, ISP is the owner of Red Bike Publishing Red Bike Publishing . He regularly consults, presents security training, and recommends export compliance and intellectual property protection countermeasures. He is an accomplished writer of non-fiction books, novels and periodicals. Jeff is an expert in security and has written many security books including: "Insider's Guide to Security Clearances" and "DoD Security Clearances and Contracts Guidebook", "ISP Certification-The Industrial Security Professional Exam Manual", and NISPOM/FSO Training".

Security Self-Employed Business Structure and Sales Tax

When working on your business, be sure to make time for administrative tasks. Many of these tasks include filing quarterly estimated taxes. This quarterly estimated tax depends on your total income all your sources of income including full time jobs and businesses. This tax is also figuring FICA, Medicare and any profits your business earns (total sales minus expenses).  This applies for full time self-employment and if you have a side business in addition to a full time job

Managing taxes is sometimes and easier endeavor when filing as a sole proprietary entity, especially where state jurisdictions are concerned. Limited Liability Corporations (LLC) or other corporate entities are more complex and administrative tasks will pull you from your primary business role. In addition to consulting or providing other security products and services, you will have to handle mundane but important administrative responsibilities. So, as you form an LLC or other incorporated entity, do your research up front. For example, I just recently converted my business into an LLC. Red Bike Publishing, LLC has a new structure and is expected to maintain that structure according to our state sales tax laws. Tax and business entity rules vary according to where the business is formed as each state has its own requirements. In my state, a business must pay $100 per year, regardless of whether or not the business makes any money. This is called the business privilege tax (BPT). Yes, it's a tax assessed for allowing my company to perform business here.

Red Bike Publishing, LLC only has to pay $100 per year because it does not exceed the multimillion dollar sales threshold. If we did make that kind of money, we would have to pay $200 per year or a percentage of revenue, at least that's how the tax office justified it.  Also, LLCs and incorporated business entities must file sales taxes monthly or face a penalty, regardless of whether or not the business actually makes sales within the state. File late and a $50 penalty is incurred. It is the business' responsibility to track sales and collect local and state taxes. For internet businesses like Red Bike Publishing, LLC, our sales are out of state, but we still have to file “$0.00” or face penalties and fines.

Red Bike Publishing as a sole proprietor did not have to worry about the BPT. But as soon as the corporation was formed, Red Bike Publishing, LLC not only owed the tax, but also owed two months of late fees since it took two months to get records back from the state and set up an online tax account. By the time we filed our first $0 sales tax return, we owed almost $200 in fines. Fortunately the state was understanding and agreeable to waive the late fees. Another comparison is that LLCs are also responsible for filing property tax on all office equipment and supplies on hand; not a requirement for sole proprietorships.

When to charge sales tax

Any time you do business providing a service or product, you should pay sales tax to the local and state government. However, if your business is an online business, you may only have to pay sales tax to the local and state governments of where your business is addressed. Since this is not one size fits all law, get advice from your state about setting up an internet business. This is what Red Bike Publishing, LLC has done. When we sell products online, we make arrangement to pay state and local government sales tax for sales going to customers within the state and local government jurisdiction where our business is registered. Those in other states do not get charged sales tax.

As a self-employed entity, you might be established to conduct business in state and pay the privilege of doing business tax. Even though you might not have physical store, your responsibility is to collect state and local taxes from local customers and those located in state.  For example, you might be set up to sell security cameras. Customers within your state and local area must pay sales tax. To apply appropriate sales tax, simply select the sales tax options on your online shopping carts or other payment collection options. Some shopping cart software will allow you to charge varying rates based on selected zip codes. For example, for anyone in my area of zip codes who buys my security books online, I must charge county tax, city and state tax. Anyone from outside of the local area, but within the state, is only required to pay state tax. Anyone purchasing from outside of the state do not pay sales taxes.

However, if your products also include performing a service in another state, you will have to charge taxes for that state. For example, if you sell security cameras installation services online, but travel to another state to do the installation, you will have to apply the appropriate sales tax to where the service is performed. It’s tricky to figure out, so be sure to know state tax laws.  In another example, I asked state tax employees about providing security training in another state and whether or not I would have to charge sales tax for that state.  For example, if I travel to Los Angeles, California to teach NISPOM training I would need to charge sales tax to applicable students.

For those of you experienced in self-employment, this may not be news to you. I hope this has been a refresher. For those of you new to self employment or are contemplating such a move, make sure you are prepared. There is a lot of opportunity for security related business. Just make sure you do the research to avoid fines, penalties and sleepless nights.

Jeffrey W. Bennett, ISP is the owner of Red Bike Publishing Red Bike Publishing . He regularly consults, presents security training, and recommends export compliance and intellectual property protection countermeasures. He is an accomplished writer of non-fiction books, novels and periodicals. Jeff is an expert in security and has written many security books including: "Insider's Guide to Security Clearances" and "DoD Security Clearances and Contracts Guidebook", "ISP Certification-The Industrial Security Professional Exam Manual", and NISPOM/FSO Training".

Tuesday, December 17, 2013

NCMS’ Industrial Security Professional (ISP®) Certification Achieves ANSI Accreditation

NCMS’ Industrial Security Professional (ISP®) Certification Achieves ANSI Accreditation Wayne, PA, 23 October, 2013: Leonard Moss, Jr., President of The Society of Industrial Security Professionals (known as NCMS), announced today that NCMS’ Industrial Security Professional (ISP®) Certification has earned accreditation from the American National Standards Institute Personnel Certification Accreditation Program.

The ISP® Certification is available to qualified candidates who work within the U.S. National Industrial Security Program (NISP). The intent of the ISP® designation is to
award professional certification and recognition to qualified candidates who demonstrate the knowledge, skills, and abilities their profession demands. The basis for the examination is primarily the National Industrial Security Program Operating Manual (NISPOM), the supplements, and other information security concomitant rules and regulations to include Operations Security, proprietary information, etc. Successfully completing the examination signifies the overall competence of the candidate on NISPOM requirements, so current and prospective employers will have a recognized criterion to evaluate their performance.

“ANSI commends NCMS for achieving accreditation and demonstrating its commitment to the continual improvement of its certification program,” said Dr. Roy Swift, Senior Director of Personnel Credentialing Accreditation Programs at ANSI. “Accreditation by ANSI demonstrates compliance to a rigorous internationally recognized  accreditation process and creates a valuable market distinction for these NCMS credentials.”

This ANSI accreditation process – based on the ANSI/ISO/IEC 17024 standard – is designed to increase the integrity, confidence, and mobility of certified professionals.
Since the launch of ANSI’s Personnel Certification Accreditation Program in 2003, the Institute has accredited 43 personnel certification bodies across a range of industry
sectors involving more than 5 million workers.

ANSI’s personnel certification accreditation program was the first such program in the United States to fulfill the requirements of ISO/IEC 17011, Conformity assessment ‐
General requirements for accreditation bodies accrediting conformity assessment bodies, which represents the global benchmark for accreditation body practice. Accordingly, ANSI’s accreditation program is recognized as a world‐renowned leader in personnel credentialing.