How Do You Keep Them Coming Back?

Right now a lot of small businesses are struggling to keep their customers. It’s tough out there, whether you run a retail business or a service business. In a New York Times article How Do You Keep Them Coming Back the author explains, “One of the most important aspects of retail marketing is to get the customer to think, ‘I love it here. I want to be here. I belong here.’ You want customers to take ownership of the store, which essentially means ownership of the brand.”

I couldn’t agree more. That’s exactly what our franchise owners of the Roni Deutch Tax Centers try to create—a brand experience. They work to create a unique “feel” when you walk into a Roni Deutch Tax Center; one that the customer will remember.

In order to get people coming back you need to make them feel special; treat people like V.I.P. The article points out some good examples of the ways a couple of stores created a “home” for customers, and a reason to come back. As the author puts it, “When you make people feel comfortable and at home, they will reward you with repeat business.”

Read the full article here for some inspirational ideas to keep your customers returning.

Writing Off Job-Related Moving Costs

Unfortunately, job-related moving expenses are amongst the more commonly forgotten tax write-offs. However, as Don’t Mess With Taxes—one of my favorite tax blogs—explained in a new entry, taking advantage of incentives for moves related to a new job are actually more straightforward then you might think.

Moving tax tips: One of the nice things about moving for a job is that you can deduct some of those costs. Even better, you don't have to itemize to claim these expenses.

You must, however, meet a couple of basic requirements.

The move has to be work related. You can't simply write off a change of scenery.

You also must meet the IRS' time and distance tests.

"Time" means you have to work at your new location for at least 39 weeks in the first year after your move.

"Distance" requires that your new job be at least 50 miles farther from your previous residence than your last office was from that home. Basically, the IRS isn't going to help pay for a move that simply provides you an easier commute.

If you're reentering the full-time workforce, you can claim the deduction even if you don't have a job when you move.

If you're married and file jointly, only one spouse needs to meet both the time and distance tests.

Filing basics: As for filing itself, you do have to fill out another piece of tax paperwork, Form 3903.

And, no surprise here, the IRS has plenty of moving deduction do's and don'ts. Here are some of the more interesting ones.

Costs to transport pets are deductible.

So is the cost to have your car hauled to your new home.

Leadership Advice for Current and Future Executive Women

Earlier today I came across this helpful article on one of my favorite blogs, the Glass Hammer, with leadership advice from various executive women. Being a woman in the business word can be difficult, to say the least. Fortunately, the bloggers at the Glass Hammer have gathered some simple and straightforward advice. Check out a clip of their article below.

Get Really, Really, Really Good at Your Job.
“I didn’t chart my career out,” said Sutton, “but I always had a good view of what I loved doing and what the next career step might be.” Sutton started her career in finance as a clerk with Wachovia and worked her way up through the organization over 35 years, until she left to establish the banking business for Morgan Stanley. She added, “I’ve given advice to people I’ve mentored that if you are too focused on the next step, you are not going to do a very good job in the job you are in. And I’ve seen that over and over again. Get really, really, really good at the job you are in because if you are and you’ve mastered it, you will move from the next role to the next role to the next role, but if you look too far ahead, you probably won’t… People who seem to be really successful are great operators. They get in the business and understand the business.”

Be Comfortable With Ambiguity.
Said Smith, who, after 14 years of brand management and executive roles at Kraft Foods, was brought to Avon by Andrea Jung to help her transform the company: “We are all taught that great leaders set the strategy and then set everybody off marching. But, right now, nothing is more important than a general agile leader who is comfortable with ambiguity. Let’s face it - it is going to be a bumpy and fascinating ride. We need people who are nimble and agile in their thinking who are, to some degree, comfortable with figuring it out as they go along. We [at Avon] look for people who can handle change, who can handle the curve balls…understanding that you can’t possibly have it all figured out and being open to that. Also, people that can communicate and inspire. That’s always been important in leadership but now more than ever because you have to communicate and be really transparent and take people along on the journey, to say, ‘This is uncharted territory but this is where we are going.’” Sutton agreed, adding that even her job at Morgan Stanley, which was created for her, changed shortly after she joined the company. “What I was hired to do changed in 6 months and that shifted because the environment changed. [But it was OK because of] the belief I could make a difference.”

Think of Your Career as a Jungle Gym Rather Than a Ladder.
Moderator Pattie Sellers advised the audience of MBA women: “Don’t think of your career as a ladder, think of it as a jungle gym. If you think of it as a ladder, you won’t have the peripheral vision to enable you see the lateral opportunities and especially today when you don’t know what the hot job is going to be tomorrow. You’ve got to keep yourself open and you’ve got to swing to the opportunities that come along.” Smith agreed, “I believe the greatest plans are restrictive instead of instructive. Figure it out as you go along. The only guiding principle I’ve had is to insist that my life and work have passion and purpose. When I think about the pivotal jobs I took [like her move to Kraft’s Callard & Bowser-Suchard to handle the then-unknown Altoids brand for Kraft or the jump from being Group Vice President and President of the U.S. Beverages and Grocery Sectors in Kraft to Brand President for Avon], they really made no sense on paper.” She continued: “Just go into everything saying – I’m going to be inspired and I’m never going to settle and go where that takes you. ” And Sellers added, “I’m struck by women on the Fortune’s Most Powerful who’ve taken lateral moves or even taken downward moves because they wanted to expand their experiences. And that’s what pays off in the long term.”

Everything you Need to Know About Taxes After Death

I am sure you have heard the famous Benjamin Franklin quote "nothing can be said to be certain except death and taxes". For some Americans, the two become truly intertwined as spouses and beneficiaries struggle to make sense of taxes after the death of a loved one. To educate my readers on the subject I have composed the following article explaining everything you will need to know about taxes after death.

The Taxpayer’s Estate

When a taxpayer passes away, a new entity known as the taxpayer’s estate is created to assure no taxes go unpaid. The taxpayer’s income will need to be included on their final tax return, which must be filed. If there is a beneficiary, then he or she may be able to pay the deceased’s income taxes on their own tax return. However, if the estate has a value of more then $600, then a tax return must be filed for the recently deceased taxpayer.

The Final Tax Return

The final tax return filing could fall in to the hands of several different persons, depending on your unique situation. If the estate had an executor or administrator, then they are typically responsible for making sure the return is filed. However, if there is none, then the closest surviving relatives must take care of it. There are no special forms that need to be filed for a taxpayer who has dies. Instead, the word "deceased" needs to be written after the person’s name on their standard return.

Due Dates

Many taxpayers trying to take care of recently deceased family member’s tax return might not think that the April 15^th deadline matters. However, this is a big mistake. Even with a deceased persons tax return, the IRS deadline is still April 15th. Remember though, if you are running behind then you can always request an automatic extension.

Deductions

After death, the rules regarding deductions are a little different. Any expenses that were paid before death in the tax year can as usual be deducted on the final return. Additionally, deductible medical bills that may have incurred in the final months can also be deducted, even if they were not paid until after death.

Property

If the property of the late taxpayer is to be inherited, a few things will change on it's value and taxes as well. After the death of the taxpayer, the value of their property will be adjusted to it current market price. This is helpful for the person who inherits the property, because if they decide to sell they would only owe tax on any appreciation of the property after the death. Therefore you need to validate the date of death value as soon as possible, which can make the process even more difficult.

Savings Bonds

United States savings bonds have their own set of special rules after the holders pass. When the bonds are passed on to a benefactor, the amounted interest will need to be treated as income by the person who inherited them. They would then become responsible for paying taxes on the bonds, which would usually not be due until said bonds were cashed out. Alternatively, you could report the accrued interest on the late taxpayers final tax return. However, if this option is chosen then the person who inherits the bonds will need to pay taxes on the amount of interest at that time.

IRAs and Retirement

A big misconception about inheritance taxes is that IRAs and retirement accounts are not subject to them. Unfortunately, this is not true. With IRA inheritance, you can choose to re-title it as an “inheritance account,” roll it over into your own IRA, or have it as your own separate account. The rules may be slightly different depending on your relationship to the recently deceased taxpayer. In most cases, taxes will still need to be paid on any distributions paid out of the IRA. However, it can get very complicated and I highly recommend speaking with a qualified attorney to make sure you are fully compliant with both federal and state tax laws.

8 Ways to Prevent an Audit

The RDTC Tax Help Blog recently posted an entry with advice on how to prevent an IRS audit. Below are the first three items, but you can read the full list by clicking here.

1. Keep Neat

One of the easiest ways to get audited is by simply not providing all the correct documentation. When doing your taxes, it can be easy to miss a step or forget to include a few things. Unfortunately, this looks like evasion to the IRS, so do everything you can to keep all your tax documents together before tax season. That way you can make sure that all of your returns are accurate before you file them.

2. Keep Business Separate

It's easy to get carried away when buying stuff for "the office". However, make sure that when you are buying anything for your business that it is a business expense allowed by the IRS. Additionally, too many write-offs for your business that seem suspicious are a big red flag for the IRS, so only write-off items that clearly serve a business function.

3. Check Your Income

Make sure the income you put on your return matches the income number on your income forms exactly. While this does not always make for an audit, it only takes a few things to raise suspicion. Listing an incorrect income is of the easiest ways to get audited, but can easily be avoided by double-checking your return before you file it.

Continued at RDTC.com…

Top 10 End of the Year Tax Tips

As the holidays approach and this long, but historical, year comes to a close, there is no better time to prepare early for next tax season. Our country’s economic outlook may seem dreary, but there are still plenty of ways to save money on your taxes. To help the readers of my blog better manage their bucks in both the present and the future, I have compiled the following list of the top 10 end of the year tax tips.

1. Charge It

Paying deductible expenses with a credit card before December 31st will allow you to claim the deduction this year. You can also wait until next year to pay off the charges. You also may qualify for credit card rewards.

2. DE-fer! DE-fer!

To keep your taxable income and liability down, try deferring some of your income until next year. This tip is easiest to for those of you who are self-employed, but many others can benefit from it as well.

3. Mortgage Payments

By making your next mortgage payment before the end of the year, you can take a higher interest deduction this year. However, remember that you will have one less mortgage payment to claim next year.

4. Get your Finances in Order

Conduct a thorough review of your income, expenses, deductions, and financial portfolio. You cannot reduce your income tax liability at all until you are crystal clear on just what your financial situation is. It can be helpful to get this done before the end of the year, that way you are not running around at the last minute looking for important financial documents.

5. Get Married, Already!

A lot of couples are planning on getting married in early 2009. However, if you decide to have the wedding in late 2008, you get to claim Married, Filing Jointly status on your 2008 return. This could lead to more favorable tax consequences (e.g. additional exemption, etc.)

6. Remember Retirement

Make “catch-up” 401(k) and IRA contributions if your contribution level is less than the maximum allowed (and if your plan will let you do it). This will not only benefit you in the long run with an ample retirement fund, but it will also lower your taxable income for this year.

7. The Season of Giving

Not only is it good for the heart to make charitable contributions, but it can also be good for your wallet! Make sure to collect all receipts for any charity contributions you have made this year, and if you have not made any yet then – well, ‘tis the season!

8. Prepay State and City Taxes

Remember, you can deduct all state and city taxes that you pay. So prepaying any state or local taxes you might owe before the end of the year means that you can deduct it from this year’s federal tax return.

9. Stock Up

If you own a business, or are self-employed, then now is the perfect time to stock up new supplies. You can deduct all of these expenses, plus at the time of the year many stores offer large holiday discounts. So by purchasing these items now you might be able to save a little money!

10. Check, Re-Check your Withholding

At the end of the year it’s a good idea to check, and double-check, your withholdings to assure that you are paying the exact amount you should be. It might not make an affect on your upcoming tax return, but it can get you on the right track for the next tax season.

10 Ways to Get Free Money from the Government

One of my favorite business blogs, GetEntrepreneural.com, posted this very informative entry titled “How to Get Free Government Money 101.” In the entry the blogger gives advice on how business owners can get money form the government to help make ends meet during times of economic uncertainty. Listed below is the author’s advice broken down into 10 tips.

1) Only 12% of Gov't Money goes to the poor

Most Americans think that government money programs are for everyone else... for instance only the poor, minorities or friends of the president.

But, only 12% of Government Handouts go to the poor. And only 25% of Government Programs have income requirements

The rich and famous, including Donald Trump, H. Ross Perot, Dick Cheney and George W. Bush, all made millions as private citizens with the help of government money programs. If they're eligible, you certainly should be too.

2) Only 20% of Free Money is called "Grants"

Most free money programs are not called “grants” by the government, they’re called “direct payments.” It is very easy for someone not to know all about government jargon, but just a little research can clear up quite a few misconceptions. Don't discourage yourself by focusing only on "grants" and dismissing the other 80%.

3) 50 Million people don't even know they're eligible

This is one of the most important points to keep in mind: The Government cannot and does not advertise programs that offer free money. But it's out there, lots of it. You just have to invest time finding the programs.

4) You can't make one phone call and just get a check in the mail

Getting government money is like looking for a job. When you knock on one door and ask about a job, and they tell you that you are not qualified, you don’t go home and wait for them to change their mind.

No Way. You would never hear back. You have to be persistent and go from one office to the next until you find a good fit.

5) Free Money keeps growing no matter who is sitting in the White House

We constantly hear about government budget cuts and that makes people believe that government money is going away or will soon be gone. But every year for the past 30 years the amount of free government money given out to individuals keeps growing. It keeps increasing no matter if it’s the republicans or the democrats who are in charge. With the new Obama administration especially, we will be seeing more offered to small business and entrepreneurs in the form of government money programs.

6) You certainly don't need a professional grant writer

Nine out of ten times you will not need help in filling out an application. Most free money programs to pay for your bills, education, health care, housing and even business require just a few pages of blanks to fill in.

If you have trouble filling out an application for money, don’t hire a consultant. Go to the office that is handing out the money. The are obligated to help you fill out your application and they are in the best position to know what should be included.

7) You can apply for as many programs as you like

Don’t worry about how many programs you can apply for. If you see a program that you think might work for you, apply to it. Sure there are some programs that give money for specific reasons and if you get accepted from 2 separate places you will have to refuse one of the offers, but that's still a nice position to be in.

8) It doesn't always matter if it sounds like you don't qualify

Here's an example: “All the money is given out by August 30th”: The end of the accounting year for most government agencies September 30, but the agency can start giving out more money beginning October 1, and you can be the first in line.

In all likelihood, you can wait another 30 days for your money.

9) Information can often times be out-of-date

Every day programs come and go. Every day people change their address, phone number and websites. It is just a fact that these things happen in our modern society.

But remember, if a listing leads you to a non-working number or website, it does not necessarily mean that the program is gone. Call the agency listed in the program description and ask.

10) Don't be intimidated by the idea that the applications are all long and confusing

Getting an application that is only one-page long is not unreasonable at all. Many of the government programs that give our grants really don’t need a lot of financial information because unlike a bank they are not worried if you don’t pay the money back. They don’t want it back. It’s free money.

5 Problems to Check for Before Buying a Foreclosed Home

Hundreds of families, and real estate investors, are purchasing more and more foreclosed homes as they can typically be purchased for a fraction of their value. However, you want to make sure to pay close attention to the following 5 potential problems thanks to Popular Mechanics.

1. MOLD

These organisms love water—so they love humid places like Florida, says Lee County property inspector and field services supervisor John Heaphy. Lee Country, home to Ft. Myers, has been one of the three counties in the U.S. hardest hit by foreclosures after the housing market collapse. When he goes in to inspect those homes, Heaphy said, mold is the number one enemy he finds. "We see walls black from ceiling to floor with mold."

Foreclosed or not, mold affects homes in muggy Florida or even arid Arizona, Grant said, though it is less common or severe in the desert. And not all mold cases are as drastic as the whole-wall growths in Florida. Sometimes, Grant said, the problem is hidden behind a wall or has just begun—that's why inspectors are so preoccupied with looking for leaks, the source of most mold infiltrations. Once mold takes hold on drywall, Heaphy said, there's usually no hope to slow it down; the new buyer would have to replace all the infested drywall.

2. VANDALISM & BREAK-INS

One of the reasons mold is such a problem in Florida foreclosures, Heaphy said, is that vandals steal air conditioning units so they can sell the copper tubing for scrap. With no air conditioning to keep down the humidity (and a gaping hole letting in humid air), mold flourishes. A/C window units aren't the only target, Lee County property inspector Ken Wilkinson said—thieves would grab dishwashers and other large appliances before banks and realtors got smart and pulled those expensive items out of unoccupied homes. Piping and electrical wire are also popular targets, according to realtor Jeff Staub, who works in foreclosure-ridden Riverside, Calif.

Abandoned homes are ripe for random acts of vandalism as well. But, Heaphy said, some of the worst damage comes from the former homeowners, who deface their own house when they know they're going to lose it. Grant has seen the same thing—some people trash the house, or even punch holes in the walls. Staub said he once entered a home in which someone had taken a baseball bat to the walls. But what may have shocked him more, he said, was the time he entered a house where the old owners had left their home perfectly clean, even vacuuming the floors on their way out. "You never know what you're going to see when you walk through that door," he said.

3. PARTING GIFTS

Besides damaging the house in frustration, Grant said, some foreclosed homeowners try to take whatever they can along with them. He said that he and other inspectors have gone into houses where the former owners grabbed anything they could get loose—light fixtures, ceiling fans, even kitchen cabinets and entire toilets taken from the house. Staub said he found a foreclosure where the former owners had ripped out all the carpeting. And while some foreclosed homeowners loot their own home, Riverside, Calif., realtor Mike Novak-Smith told PM they often leave things behind, too—usually lots of trash and junk. So if you're looking for a foreclosed home, anticipate that extra costs for appliance replacement or trash removal might cut into the savings from buying an inexpensive property.

4. WILD ANIMALS

Nature abhors a vacuum, and often wild animals will find an abandoned house and make it their home. Heaphy said that all kinds of Florida wildlife like to take over in the absence of a homeowner—when the grass gets hip-high at an abandoned house, it's a haven for snakes. And he and his agents have stumbled into other animals, including panthers and wild boars. Typically, Heaphy said, those big mammals are more scared of us than we of them, but that's not always the case. "If you find a mother boar with piglets, you don't want to get in her way," he said.

Grant said he'd seen hundreds of bats in an attic before, and a beehive so well developed that honey was dripping off and coming out of the bottom of a wall. Inspectors in Arizona sometimes run into skunks living in ventilation systems. He said probably not all of those instances happened in foreclosures, but they show how a neglected home can become host to just about anything. You can get rid of larger mammals, Heaphy said, at least once you get over the shock of finding a panther in the living room. But some infestations—like the fire ants he sees often in Florida—are harder to exterminate.

5. NEGLECTED MAINTENANCE

"Most maintenance stops when the payments are no longer being made," Novak-Smith told PM. Grant said people who know they're losing their house don't typically care whether they keep a fresh coat of paint on the walls or if tiny roof leaks are sealed. Mechanical systems frequently suffer in a foreclosed home because they need a fair amount of care, he said—foreclosures frequently have heating systems at the end of their lives, often prematurely so because the homeowner neglected routine maintenance, like cleaning the filters or bleeding the radiators. The ventilation systems are often forgotten, too, he said, which can lead to mold problems. Home buyers looking at foreclosures need to bear these facts in mind, Grant said—they could be inheriting a much larger and costlier repair job than they first expect.

The 10 Best Places in the World for Surfing

Anyone who knows me will tell you that my two greatest loves are taxes, and surfing. Although I love riding the waves in Hawaii, surfing is an international hobby and half the fun in the sport is finding new spots to surf at. With thousands of great spots all over the world and more being found all the time, it is hard to know which ones are worth visiting. To help the readers of my blog with their own surfing adventures, I have gathered the following list of the 10 best beaches in the world for surfing.

1. Fuerteventura, Spain

Weather conditions are perfect in Fuerteventura. Of the coast of Morocco, it sits on the same latitude as Florida and Mexico. Known for its year-round good surfing and beautiful surroundings, it is the second largest of the Canary Islands. Because its large size, the island hosts multiple beaches that all make for great surfing.

2. Gold Coast City, Australia

Australia is known across the world for their excellent surfing conditions. With four main breaks and sunny skies, Gold Coast City has been named the “surfers paradise”. It features nearby shopping, entertainment, and tourist attractions that are convenient for surfers looking to have some more fun after hitting the waves.

3. Kandahar, Mexico

Surfers of every level can enjoy the waves of Kandahar. A wide variety of surf breaks allow surfers to advance their skills and have a fun relaxing surf all in one day. The beach is not overly crowded, but is known by surfers for it’s great weather year-round. But if you are looking for 15 feet waves then I suggest visiting Kandahar in either May or June.

4. Jeffery’s Bay, South Africa

Jeffery’s Bay is so popular among surfers that it hosts the annual Billabong Pro World Champion Tour on its beach Supertubes. Jefferey’s Bay is world famous for great surfing and great fun. The surrounding mountains and wildlife will leave you breathless, while the waves will shock you with their sustainability and variety.

5. Half Moon Bay, California

With infamous waves ranging between 25 and 50 feet, Half Moon Bay is a mecca for surfers and ocean lovers alike. Rock formations cause the wave phenomenon from underneath the water, making the spot all the more amazing to visit. Although the waves are not the biggest in the world, they are certainly the biggest in California!

6. Banzai Pipeline, O’ahu

The Pipeline has both some of the best and most dangerous waves in the world. It is definitely no place for a beginner as their waves are so intense that even some pros shy away from. Although it is one of the most coveted and loved surf spots, the danger should not be ignored. More surfers have died surfing at the Pipeline than any other surf spot.

7. “Cloud 9” Siargao Island, Philippines

Well known for its perfect tubes, cloud 9 is a relatively newly discovered hot spot for surfers looking for a fun challenge. It is also the host of the annual Siargao Cup, a domestic and international surfing competition. Although many surfers love Cloud 9, it has recently been referred to as “crowd 9”, as it is has become quite popular over the past few years.

8. Tavarua, Fiji

Fun because of its “secret” element, Tavarua has 2 world-class breaks, beautiful scenery, and a breathtaking coral reef. Unfortunately, a private surf camp manages this island and only allows visitors by invitation. Fortunately, the island hosts multiple surf competitions each year that can be watched on television or online.

9. Teahupoo, Tahiti

Another site of the annual Billabong World Championship Tour, Teahupoo lets experienced surfers live out their dreams. Their beaches have waves reaching past 10 feet, a heavy current, and perfect barrels. Because of their perfect conditions nearly every professional surfer has been to Teahupoo at least once, and almost every amateur dreams to.

10. Mundaka, Spain

One of the most famous surf spots in Europe and the world, Mundaka offers the waves and speed that every surfer craves. The current is strong, making your ride more smooth and fun but also adding some danger. Only experienced surfers should head to Mundaka, as the tide is so strong it can only be surfed in shallow waters.

10 Easy Ways to Increase your Gas Mileage

Although gas prices dropped a little over the past week, they are still high. Luckily, there are dozens of easy ways you can save gas and money by increasing your gas mileage. With just a few adjustments and a little patience you can save yourself hundreds of dollars every year in fuel. In today’s economy, who could not use a little more money?

1. Cruise When Possible
Cruise control works effectively in two ways. First, it keeps the car running smoothly and efficiently without jumps or sudden acceleration. Second, it has been proven to put people in a calmer state of mind, which reduces erratic, gas guzzling, driving habits.

2. Keep It Light
Having heavy objects, or just a lot of junk in your car can put a big toll on your mileage. By simply cleaning out your car, you will not only save fuel, but you will have a nice clean car!

3. Oil Changes
Checking and changing the oil in your car on a regular basis saves you more gas than you would imagine. Having clean oil in your engine helps the whole vehicle run smoother, making your vehicle more fuel-efficient.

4. Plan Ahead
Try planning errands in the same part of town around each other, so that you do not have to make multiple trips. By arranging your errands and appointments around each other will save you hundreds in gasoline every year.

5. Slow Down
The EPA estimates you pay about 20 cents more per gallon for every 5 miles you go over 60 mph. Although going 80 down the highway may get you some where quick, you will be paying much more per mile for the speedy trip.

6. Check Your Wheels
Poorly inflated tires waste a lot of gas. Studies show that keeping your tires at maximum pressure at all times can save you as much as 10 cents per gallon. It is a good idea to gauge your tires for pressure at least once a month.

7. Let Your Car Breathe
The air filter in your car is what lets it breathe, and a clogged filter will add drag to your car and waste gas. Check and maintain your air filter as you would your oil, to prevent this from happening.

8. Close Windows
Even if the weather is nice, having even one window down in your car while driving at highway or freeway seeds causes major drag. Believe it or not, studies show that using your A/C at speeds over 55 mph is actually more fuel-efficient than having your window down.

9. Take Advantage of Cool Weather
Gasoline is denser in cool temperatures, and since it is measured by volume and not density, buying fuel during cooler times of the day will let you get a little more gasoline for your money.

10. No Top-Offs
"Topping off", or overfilling your gas tank almost always wastes money and fuel. To avoid gasoline from splashing and getting wasted, stop adding more fuel after the pump stops the first time.

Top 10 Tips for New Entrepreneurs

As most of you may know, I am the founder and CEO of both a nationwide tax resolution law firm, and a tax preparation franchise. I opened my law firm from a one-bedroom apartment and built it up into a large corporation that allowed me to also open the tax preparation franchise.

People always ask me what advice I would give to new entrepreneurs looking to achieve success. Although everyone is different, and every business will require it’s own plan, below are the top 10 tips I have found helpful in my entrepreneurial experiences.

1. Do something you are passionate about
When you are deciding on the type and style of business you aspire to run, make sure it is something you are truly passionate about. Starting up a company can require long hours, 7-day workweeks, and a ton of energy. If you are not passionate about it then you can lose your drive quickly.

2. Always be original
Do something that will set your business apart from the competitors. There is no use in competing against a well-established competitor with a carbon copy of their products or services. In order to get interest in your business you need to set it apart from the competition and offer additional benefits.

3. Prepare a business plan & write it down
Even if you do not plan to get a business loan, you should still prepare a well-written business plan. Think about it – would you want to invest your hard-earned money in a new company that does not even have a written business plan?

4. Triple your anticipated startup costs
One of the biggest problems new entrepreneurs encounter is not properly anticipating start-up costs. It can take weeks, even months to begin generating revenue and you need to make sure you have ample funds to establish your company.

5. Do not even think about profits
When you think about opening a business, do not even begin to think about profits. When you prepare your business plan you obviously want to create a structure that produces a profit, but it should not be the main reason you open a business. You need to focus on generating capital for your business, not adding money to your personal bank account.

6. Live & learn, live & lean
Everyone makes mistakes, but it is important turn these into opportunities to learn. Do not spend time being depressed because your business is slow to take off, or you lose your first major client. Learn your lesson and move on.

7. Set goals and work towards them
It is one of my strongest opinions that in order to achieve success you need to have goals. You need to look forward to the future, and envision where you want your business to be in 3, 5, or even 10 years. Then you will have something to work towards.

8. Build professional relationships
Networking with other business owners is important as it can help your form professional relationships that can generate business for both parties. These alliances, such as exchanges of work or services, client referral systems, etc., can be highly valuable to new business owners with a tight budget.

9. Get help from others
You cannot try to do everything on your own. There are only 24 hours in a day, and only so much work you can complete in that time. If you have too much business then you should consider hiring employees to help or seeking help from a professional service.

10. Continue to educate yourself
You can never know everything about running a business, so continually educate yourself by reading books or business blogs. You may even consider writing a blog of your own, as writing entries on topics you are not familiar with can present excellent learning opportunities.

Top 10 Things to do in Hawaii

As some of you may already know, I “heart” Hawaii. However, like most other people working in the tax industry I have not been able to get away since tax season begun. So to help all the tax professionals and accounts that are planning their post-tax season vacation, I compiled the following list of the top 10 things to do in Hawaii.

However, just because you do not work in the tax industry do not think this article does not apply to you. May is just a few days away, and that means the IRS is going to begin sending economic stimulus checks shortly. If you are wondering what to do with this “free money,” or if you have not yet spent your tax refund, then consider taking a relaxing vacation to one of the most relaxing places in the world.

1. Go Surfing
It is probably no surprise to anyone who has seen my Halloween costume that I love surfing! Hawaii is the perfect place to surf as all of the islands get decent waves and some can be as large as 30 feet.

2. Relax on a Beach
Hawaii is known around the world for it’s beautiful sandy beaches and sapphire water. Although some of the beaches may get crowded during peak seasons, if you do a little hunting then you can probably find a quite place to relax on the beach.

3. Attend a Polynesian Luau
No trip to Hawaii is complete without attending an authentic Polynesian luau. Even if you do not like kālua pork, a luau is still an exciting experience as they often feature music and dancing in addition to a wide variety of authentic foods.

4. Go Snorkeling
When planning your trip to Hawaii, make sure you bring your snorkel and fins! Molokini is considered the most popular snorkeling site in Hawaii as it has clear water with swarms of beautiful fish. However, there are dozens of other good snorkeling sites if your prefer something more exclusive.

5. Play Golf
Hawaii is known all over the world for their top-notch golf courses. There are nearly 100 different courses on the Hawaiian Islands, with locations ranging from deep in the rainforest to coral sea cliffs.

6. Go Volcano Watching
The Hawaiian Islands are filled with both dormant and active volcanoes that are beautiful see and exciting to visit. The Volcanoes National Park is located on the Big Island and features the most active volcanoes and dozens of tour opportunities.

7. Take a Helicopter Tour
By taking a helicopter tour of one of the islands you will be able to experience it in an all-new way, from hundreds of feet above. You will be overwhelmed by the beautiful the scenery is and how much of the island you can see in a relatively short amount of time.

8. Visit Pearl Harbor
Honoring the lives of those who were lost during the attack on Pearl Harbor is a must for any one who visits the Hawaiian Islands. You can view the USS Arizona in her final resting place by visiting the museum and monument that allows you to look through the glass floor to view the sunken ship.

9. Dolphin Convocation
During the first week of May each year, large amounts of dolphins gather near Oahu Island, swimming in a gigantic wheel or spiral pattern. No one knows exactly why this happens. You can join Hawaiian marine biologists this spring as they venture out to observe and research this strange phenomenon.

10. Take a Bike Ride
There are plenty of good bike trails throughout the Hawaiian Islands and places you can easily rent a bike for a few hours. But always remember to pack ample water and diluted juices as the heat and physical activity can easily dehydrate the novice biker.

For more information, check out Go Hawaii.com.

We all Make Mistakes – Even the Government

Today is the fourth day of taxes, and the featured topic on 12DaysOfTaxes is the covered the top 10 mistakes people make on their tax returns.



Below is a list of the top 10 mistakes, to check out the summary of each mistake head over to 12DaysOfTaxes.com.

1. Math Errors
2. Sign and Date Your Return
3. Attach Forms
4. Social Security Number
5. Check Subject
6. Verify Check Amount
7. List all Dependents
8. File Form 8606
9. Save Copies
10. File on Time

10 Ways to Avoid Back Taxes this Tax Season

Follow these 10 simple steps to make sure you do not owe IRS back taxes after you file your tax returns this tax season.

1. Claim the right filing status

Make sure that you claim the correct filing status. Do not claim something different in order to get a bigger refund such as claiming "Head of Household" when you really should file as "Single". Alternatively, if you are married you should consider filing jointly to lower your total liability.

2. Make sure your math is correct

Always triple check the math in your income tax returns, even if you have them professionally prepared. For the most part the IRS will fix all simple math errors, but problems can arise if you have the wrong numbers listed for income or deductions that lead to an artificially inflated refund.

3. Include income from ALL sources

Make sure that you include income from all sources on your tax return. This includes regular wages, self-employment earnings, tips, independent contract work, child support, alimony, etc. Trying to hide income from the IRS is a big mistake as they have access to mass amounts of information and can determine your exact earnings for each year.

4. Remember winnings from gambling

All the money you win from gambling must be treated as income. However, you can deduct any money you lost at gambling from your total. For more information on taxes and gambling, check out “How to Accurately Reporting Gambling Profits & Losses To The IRS” on the RDTC Tax Help Blog.

5. Do not over exaggerate charitable contributions

In recent years, the IRS has been cracking down on taxpayers that abuse the charitable contribution deductions. Make sure that you only claim contributions that you can document with some type of proof. Also, do not over inflate the donation amount as excessive donations send a huge red flag to the IRS’s audit department.

6. Mail to the correct address, or e-file

Before popping your tax return in the mailbox, make sure that you are sending it to the correct address. If you mail your return to the wrong address it can get lost and result in unnecessary IRS fees or penalties. Fortunately you can avoid this potential problem completely by e-filing your return.

7. File on time, or request an extension

It is essential that you file your tax return on time or at least request an extension from the IRS. If you just ignore tax day then you will be unhappy when you realize what it will cost you. If you cannot file on time, visit “Need More Time to File?” on IRS.gov.

8. Forgetting to pay taxes on time

If you do owe money to the IRS then you must pay it before the April 15 deadline. Not paying does not mean your debt will magically go away. Instead it will begin accruing fees and penalties. To pay your taxes enclose a check with your tax return and write your Social Security number, tax form number and tax year on it.

9. If you notice any errors, re-file immediately!

If you notice an error on your tax return, you should file an amended return as soon as possible. If you wait for the IRS to catch your error then you will likely be faced with fees and penalties in addition to the owed back taxes.

10. Make immediate adjustments to withholding or estimated tax payments

Okay, okay, I will admit, this has more to do with 2008 than this year. However, after preparing, filing, and paying your 2007 federal income taxes, you need to take the information from the return and put it to immediate use. If you ended-up owing taxes, you need to adjust your withholdings and/or start making larger estimated tax payments. If you end-up with a very large refund, again, you may need to adjust your withholdings or estimated tax payments. That way you will receive that refund immediately in your regular paychecks. You could then take that money and put it to good use in wise investments or replenish your savings.

Also, if you do owe for 2007 and will need to work with the IRS at resolving your IRS tax debt (instead of paying in one lump sum), you will be required to make adjustments to your withholding and/or estimated tax payments. That is because the IRS is unwilling to work with taxpayers until they have taken steps to ensure that they will not owe again in the future. Higher withholding taxes and/or estimated tax payments are also allowable expenses, which is important in qualifying for some forms of IRS tax debt resolution (i.e. Offer in Compromise, Installment Agreements, Currently Not Collectible status, etc.).

Advice on Internal Revenue Service Audits

With the internal Revenue Service (IRS) making recent headlines about increasing the number of audits, it’s important for taxpayers to do what they can to avoid being audited. Although many experts point to the IRS’s public relations campaign on the new audits as reason to think it’s a scare tactic aimed at increasing voluntary compliance, getting audited by the IRS is never a pleasant experience and avoiding one in the first place is definitely the best option.
Having to pay more money isn’t the only unpleasant part of an IRS audit. Typically audits are a time consuming and aggravating process. An IRS audit isn’t like a criminal trial where some one is presumed to be innocent; the burden of proof lies on a taxpayer to prove there are innocent and filed an accurate tax return.

It is important to note that the IRS computer system selects the returns that are audited. No human employee reviews returns until they are selected for audit by the computer system. The computer system selects returns that are likely to yield the most money to the government. The computer system makes this decision by reviewing returns for “red flag” characteristics. Red flag characteristics are those income, deduction, and credit types that have historically seen the most imprecise calculations and abuse by taxpayers.

A taxpayer is more likely to get audited if he or she generates income from any source other than regular employment wages. Persons who file Form 1099 are up to three times more likely to receive an audit then some one who only files Form 1040. A 1997 IRS press release claimed more then three percent of taxpayers filing Form 1099 reporting between $25,000 and $50,000 of income were audited, compared with under one percent of 1040 returns that were audited.

Although the IRS offers hundreds of possible deductions and credits to help taxpayers lower their income tax liability, taking an excessively large amount will send a very clear red flag to the IRS. But how does a taxpayer know what’s excessive? That’s a tricky question. There is no all-applying rule because the IRS determines the allowable number of deductions for a taxpayer mostly based on their income. For example, if a person making $30,000 per year claims $15,000 in charitable contributions, then this will send a red flag to the IRS.

Although there are many tax laws allowing self-employed individuals to lower their liabilities by using home office deductions, taxpayers taking home office deductions are probably the most frequently contested by IRS because they are easy for a taxpayer to bend the truth on. In order to claim a home office deduction a taxpayer’s home office must be the principal place of business, meaning they perform most of their work in the home office. Also, the space must be used exclusively for running the business and not for personal use as well. Otherwise the space can’t be considered a home office and may not be deducted. The rules for home offices are very specific, so please be sure to read the IRS’s rules and regulations if your considering claiming a home office deduction.

Losses from a business can also be another red flag for the IRS. If an individual starts their own businesses for the purpose of generating excessive tax deductions, the IRS will catch on quickly. Businesses must be profitable in at least three of the past five years in order to be considered a legitimate business for tax purposes. Otherwise the IRS will realize the business is functioning as a tax shelter.

If there are big inconsistencies between your previous tax returns and your current return then you could be sending a red flag to the IRS. The most common examples are name changes (i.e. your name or the name of one of your dependents), claiming new deductions and credits, or a significant change in income. For example, if a taxpayer earned $75,000 one year, then only $15,000 the next, the IRS is going to wonder what happened.

If there are differences in the income you reported to your state treasury and to the IRS then the IRS will investigate as to why the information reported is inconsistent. Not only do federal and state authorities receive records of all sources of income and financial information for every taxpayer – the IRS does as well. If they notice any errors that point to misrepresentation of income then you can expect to receive a letter informing you of an audit.

If your reported income seems suspiciously low for your given life style, then the IRS will see this inconsistency and may request an audit. Remember that the IRS has access to all your financial records and will notice if you are making a $5,000 monthly mortgage payment but only receiving $2,000 a month in reported wages. They are going to know you must be receiving income from another source and will investigate.

If your tax returns are incomplete or sloppily prepared then this might also get the attention of the IRS. If there are blanks where there should be numbers or if most of the numbers you claim are round numbers (like $2,500 or $10,000) then this will also send up a red flag to the IRS.
There is no way to guarantee a taxpayer won’t be audited. However, if a taxpayer files an accurate tax return and avoid the IRS’s red flags their chances of being selected for an audit are much lower. Even if they are selected, having a clean and accurate tax return will help make the audit less cumbersome and intrusive.

IRS to Begin Increasing Amount of Audits

Because of increasing pressure from Congress and the Executive Branch, the IRS has began an effort the drastically increase the number of audits they perform to help lower the ever growing tax gap. Eliminating the tax gap – estimated to be $312 billion to $353 per year – would provide enough money for the federal government to pay for Medicaid’s entire 2007 budget. Montana Senator Max Baucus, the top tax writer in Congress, has publicly demanded the IRS conduct more audits in order to continue to help lower the tax gap.

As a result, the IRS has announced that it plans to do more random audits in the next few years than it has in the past. In addition, the IRS announced plans to conduct more audits of high-risk groups. The Government Accountability Office recently concluded a detailed study on the tax gap and informed the IRS on which high-risk groups have the highest percent of misreporting on their tax returns.

With help from congress, The Government Accountability Office has identified the following groups of taxpayers to have the highest rates of misreporting on their tax returns:

• Sole proprietors reporting on Schedule C forms
• S corporations where owners aren’t taking enough wages in an effort to minimize payroll taxes
• Taxpayers who gamble and underreport their winnings
• Taxpayers who own a farm or are involved in farming
• Taxpayers who take advantage of the Earned Income Tax Credit when they don’t qualify
• Taxpayers who incorrectly report capital gains from sales of investments
• Taxpayers who take itemized deductions on Schedule A for medical expenses, charitable contributions, and non-reimbursed job expenses

However, being in one of these groups does not mean a taxpayer will necessarily be audited. Based on 2005 statistics, a taxpayer’s average likelihood of being audited was around 1%. But if a taxpayer falls into one of the groups listed above their likely hood of being audited increases to above 5%.

The IRS had discontinued its random audit process five years ago in an effort to be seen as a kinder and gentler agency of the government. However, under pressure to increase revenue to offset the tax gap, the IRS has decided to once again target not only returns that raise red flags, but to also select taxpayers to audit at random. Beginning in October, it’s expected that the IRS will target approximately 50,000 income tax returns from 2006. The IRS is warning that not all taxpayers audited will be subject to a scrupulous line by line audit though. Out of the 50,000 returns the IRS aims to audit, they estimate that 8,000 will just be examined by the IRS requiring no action on the part of the taxpayer, and 9,000 of the taxpayers audited will be able to respond to audit inquiries via mail. The remaining 30,000 taxpayers will be required to make face-to-face meetings though. Many of these audits are to be conducted even if the IRS doesn’t suspect a problem, but the IRS is claiming they hope to use the audits to gather information about taxpayer norms.

Shortly after the IRS’s announcement of their plan to increase audits, National Taxpayer Advocate Nina E. Olson delivered a report to Congress identifying the priority issues the Office of the Taxpayer Advocate will address in the coming year. One important aspect of the report was the battle the IRS is facing because of all the pressure being placed on them to lower the tax gap quickly.

"For fiscal year 2008, both the IRS and the Taxpayer Advocate Service (TAS) face similar challenges," Olson claimed. "The IRS is under scrutiny for its efforts to close the tax gap, while TAS is struggling to address taxpayer difficulties that arise as a result of these very efforts."

In multiple prior reports to Congress, Olson has identified the tax gap as one of the most serious challenges in tax administration. She has put together numerous proposals to try and help address it, but nothing has come from her proposals. She has expressed concern that the pressure on the IRS to reduce the tax gap could result in the IRS excessively cutting corners in it’s treatment of taxpayers. She emphasized that Congress needs to play an important role in helping to achieve an appropriate balance.

"IRS oversight should not just be limited to urging the IRS to collect more tax revenue," Olson continued. "Even as Congress directs the IRS to address specific areas of noncompliance, Congress should require the IRS to adopt a long-term research strategy that focuses not only on "closing the tax gap" but also on understanding what it takes to encourage taxpayers to be voluntarily compliant and how to change taxpayer behavior."

Sources
IRS to start auditing more tax returns?
Congress Instructs IRS to Conduct More Audits
More Audits Are Coming; How Can You Cope?
IRS targeting certain deductions in effort to close tax gap
They're back! IRS resurrects random audits

5 Mistakes That Can Tax Your 401(k)

These day’s it is essential to put into a 401(k), or some other type of retirement plan, if you want to be able to comfortably retire. The problem, however, is that people don’t take the time or effort to fully understand their plan to ensure maximum benefits. "Too many workers set up their 401(k) plan and then just forget about it," claims Glenn Kautt, a financial planner. USA Today.com has an interesting article on the five most common mistakes people make with their 401(k) that can result in a tax liability. The five mistakes include: rejecting free money, loading up on company stock, chasing performance, investing too conservatively, and failing to fine-tune.

Advice On Being Audited

CNN Money has an article from Gerri Willis on what to do if you get an audit notice from the IRS. In October the IRS will begin reviewing over 13,000 tax returns form 2006 and will continue with similar audits throughout the next few years. The article give more details on what do if you are audited, but the main points are to hire a professional, get organized, and stay calm.

Small Business Deductions

Do you own a small business? Nolo.com has compiled a list of the fourteen most important small business tax deductions, as well as another list of other easily overlooked deductions. You can check out the list by visiting Nolo.com.

IRS Urges Taxpayers To Check Returns

Last week the IRS released statistics on the tax returns that they have received this tax season, and many people are not claiming the phone tax refund. Out of the thirty million tax returns that were filed before February 16th nearly 10 million did not claim the refund. Even more shocking, nearly half of the returns were prepared by a tax preparation office. The IRS is now encouraging taxpayers to check their returns to make sure they are aware of the one time phone tax refund, even if a tax preparation company prepared it. For more details on claiming your phone tax refund visit the IRS’s official site.