Is getting a tax refund really a good Idea?....it depends.

   If that is the only way you can save you money then a tax refund is good idea.The problem is the IRS does not pay interest for holding your money for more that a year. (14 to 16  months to be more accurate). I don't think people realize that the refund money they get back is nothing more than them getting change back from paying to much in taxes. This is a normal practice for more than 85 million people averaging more than $2,200 back from the IRS (that's a lot of change). To give you an example of how crazy this really is lets look at this from a different perspective. If you go to grocery store every month to purchase your food and other items and you always over pay for the food. Instead of the cashier giving you back your change she/he keeps it. Now lets say you do this for 15 months and then on the 16th month the cashier gives you all your change, all 16 months worth. If you were to tell and friend or family member you did that. They would probably have you committed. Yet we think it is perfectly fine to allow the IRS to give us back our money when they feel like it.

How about getting a tax refund in your pay check every paycheck? Make some adjustments to your W-4. Look at your deductions, consider your circumstances and above all consult your tax professional/accountant.

It is your money shouldn't you decide when you get it?

         I would like to thank another one of my indirect mentors, Mr. Daniel J. Pilla. Because of his book "How to lick the IRS with postage stamp", I was able to handle my very first tax issue back in 1994 with an abatement letter.

Remember tax preparation is an annual event, plan accordingly and happy tax season.

 

http://taxhelponline.com/resources-and-publications/research-reports/reevaluate-tax-withholding.html

Did you accomplish your goals this week?

        For many of us that is an easy question to answer. Either yes or no. But the real question is did you set any goals for your business this week? If the goals you set are in your head and not recorded then you did not really set them. Why do I say that? Simple, there is no proof that you set them. I am sure you are a trust worthy individual. but, without the recorded proof their is always a shadow of doubt. Unnecessary doubts in business in not good business. Goals need to be set so you know what to expect to make sure you don't forget and minimize regret.
Did you ever wonder why basketball, Soccer,Hockey and football have goals? So the teams can have something to aim towards. I know that was weak but, you get the picture. Once you know what you are aiming towards,then you can adjust accordingly. Tracking your goals are just as important. Having the ability at the end of the week to see if you exceeded or  fell short of your goal gives you something to work on and prepare for.
                 Is all your tax information ready to be file or  turned over to your tax professional/accountant?
If so great.! If not you can set a goal to work on a system that will allow you to keep track of all your needed tax information. If you are not sure what you need to know. Just click on this blog link  http://knowtaxlawknowmoney.blogspot.com/2011/01/how-to-prepare-for-your-tax.html  it explains what you need to have and also leads to a link to down load the client organizer (its 8 pages in PDF format).
The better and more consistant you are at setting goals the smoother you business and your life will run.
Tax preparation is a year around endeavor, so happy tax season.

Mentoring ,...... Why it is equally important for business.

       This past Monday (MLK Day) I briefly mentioned one section on mentoring. Why is mentoring in Business important? Before I started seeking out mentoring I held the belief that "if it was to be it was up to me". I WAS VERY MISTAKEN. Anyone currently in business or aspiring to go into business must understand going solo limits you to your actions alone. The mindset of doing it on your own is like attempting to design something already perfected, like the wheel.
      Having a mentor is like having the smartest student in your class give you answers to all the test you will take in that class. Again over simplification on my part, however I can say from a personal experience my mentors have saved me years of aggravation, hundreds of thousands of dollars and have contributed to a much more pleasurable journey to success as an entrepreneur. Having a mentor in business is like having a guardian angel. Anyone associated with a thriving private franchise or Multi-Level Marketing Company (MLM) understands the importance of what I am talking about.
      One thing most successful business owners have in common is a mentor. My mentors have mentors. I stress seeking out a mentor because once the search begins, many doors open and opportunities come from some of the most unexpected places. My opportunity to own a tax franchise came from my financial mentor and accountant, MR. Daniels. He has opened many doors that would not have been available to me. Thank-you Mr. Daniels.
       Mentors can be direct or indirect. direct mentors are individuals you can reach out to in person or via phone conversation. Indirect mentors are those individuals that are in life where you want to be. They are typically your more famous or well established individuals that are not so easily accessible in person but,  conduct seminars, write books, post blogs or send out news letters. Those forms of communication can be considered a mentoring source. Two indirect mentors I have followed for a while are Robert Kyosaki (Author of Rich Dad Poor Dad) and Sandy Botkin (CPA and CEO of Tax Reduction Institute). Mr. Botkin also offers tax information and has a face book page that I have linked to this blog. Feel free to check him out.
        One last thing I would like to mention about mentors, is the process is more powerful when you decide to become a mentor. It also gives you a greater appreciation for your mentor. So seek mentoring and become a mentor. It will change your life for the better.


Happy Tax Season..
http://www.facebook.com/#!/loweryourtaxes

Business owners while you have time... Re-evaluate your deductions.

     While driving into the office this morning the news reminded me that the IRS will not be allowing itemizing tax payers and business owners to file their taxes until Mid February at the earliest. It appears the IRS will not be really ready until 1 March 2011 based on my IRS updates. This gives us procrastinators a little more breathing room. For those that have been ready since January this is the perfect opportunity to go back and take a look at any deductions that were left on the table. Take a look At your receipts. Did you discuss business while you were eating out with your friends And associates? Did you know that if your local ( key word being local). dining out with prospects and potential clients can be written off with out a receipt if the total (not including tip) was under $75.00 dollars. Yes you read correctly. But it has to be documented properly. How? You must answer who, what, when, and where.
Who were you with ( you can only include your spouse if your potential clients were accompanied by a guest.) what was the intended purpose of meeting? (To get a client referrals, lead etc). when did the event take place and Where did you go?
Go back over your office deductions. Did you have any repairs to the home? A percent of the repairs can be written off in addition to the credit you are already receiving. What about your home interest. Just some things to think about that you may have either forgotten or not considered. As always please consult with your accountant or tax Professional for details and information.
Remember Tax Preparation is at least a once a month endeavor, so have a happy tax season.

Why is having a financial team good for business?

       If following in the footsteps of successful people is a determining factor of future success. Then it can’t be ignored of having mentors in the same field you wish to be successful in. What do I mean by that? If a you want to be a huge success in sports then you would find a person that you best relate with in that sport. Do the things the successful athelte did so you can have what that athlete has.
     Mentors are very important (but that’s a blog for a later date). How does this relate to having a good financial team? If you do the research on some of the most successful business owners you will see that they have a financial team. Financial team is the term I use because it encompasses the lawyer, accountant/tax professional and financial planner to name a few. If you want to have a successful business you need a financial planner to help you plan how to allocate your money, an accountant/tax professional to show you how to keep your tax liability legally low and a lawyer to help you keep your money. This all sounds great but what can you do provided there are no funds allocated for such a financial team? The first thing to do is start interviewing firms or other small businesses in Law, Accounting/Tax Professional and Financial Planning. Interviewing, what do you mean? Ask business owners you know whom they use. Look the businesses up on the Internet. Do some research to find out prices for initial visits and consultations?  If you find the team you like but can only afford one or none what do you do then?

Read books they have written. find out if they have newsletter you can subscribe. See if they post a blog. If they don’t ask them would they consider posting a blog. (That’s how I got started). There are a number of ways to have your financial team before you physically have a financial team. It is only limited to the amount of work and imagination you are willing to invest. The only question you really need to ask yourself is, what is it worth to me?

Remember Tax Season is at least a once a month endeavor, so have a happy tax season. 

What can a business legitimately write off?.......It Depends.

     Please for give me for not acknowledging the day of one of the Greatest leaders of the 20th Century, Dr. Marting Luther King JR. Giving his life for his dream allows me to enjoy the freedom I as a Business owner enjoy.Thank-you.

   It can be argued whether or not we live in the greatest country, (traveling to a few foreign counties while serving in the United States Army I would say so).  What cannot be argued is the benefit of owning a business. What a business can write off (deductions and credits) is different depending on the type business. With large amounts of write offs afforded to a business, it is a wonder why more people don’t own a business. I would chalk it up to lack of knowledge. Well let’s see if we can fix that. It would take me less time to tell you what a business couldn't write off, but that wouldn’t be any fun. Below is a very small list of what can be legally deducted for business expenses.
         Any educational investment directly associated with the business can be deducted. Travel (with limitations of course) directly or indirectly associated with business can be written off. Entertainment (golf outings ,eating out, football ,futbol,(for soccer fans) baseball ,tennis ….you get the picture. Home Office expenses, car expenses just to name a few.   As always there is a catch. You must have proper documentation and the deductions have to be supported by the IRS guidelines. Your tax attorney, tax professional or accountant should be able to assist you with the who, what when where and why of the business deductions. I encourage you business owners to aggressively go after the business deductions that are legally yours.

In many cases it could be the difference between paying a large sum in taxes or getting a significant refund.

How to prepare for your tax preparer....even if the preparer is you

     One of the first questions a potential client ask me (After they inquire about the price) is what do I need to bring with me? So I send them a client organizer. A what? A client organizer is a form (between 4 to 49 pages thick) listing items or information needed to help the preparer prepare your taxes. Most clients fill out the list and the interview is brief and their taxes are processed quicker. A select few either don't fill it out or leave it at home.   The client organizer to your tax prepare is like the medical and insurance information to your doctor or the car maintenance history for your mechanic. With that information readily available the process goes faster and that is a win win situation for everyone. Believe it or not your tax preparer may charge you more for having to organize your paper work.(example a box full if receipts in no particular order).
If you prepare your own taxes, the client organizer can help you start gathering the information as soon as you get it and keep track of it. This keeps you from scrambling for your documentation.
             A simple list of things to bring to your tax preparer are but, are not limited to: dates of birth and SSN for spouse and dependence.W2 and 1099 paperwork for income reporting. Dividends received and interest paid to the banks. Receipts (more preferable copies of receipts) of your expenses for the job and or business.....better yet I will send you to my page with a link so you can download  a copy of the client organizer I send my clients( don't worry it's only 8 pages.)  Hopefully you will look it over and send responses and questions. One thing I want you to remember is that tax preparation is an annual and not a season endeavor. Enjoy and happy tax season. http://www.mytmhglobal.com/Tmhglobal_Accountable_prepairs_taxes_for_everyone.html