8 Habits of Successful Business Owners

Last week the Roni Deutch Tax Center had another guest blog entry published on FranchiseBusinessReview.com. The new article explains 8 common habits of successful business owners. You can find a few items from the list below, or check out the full blog entry at FranchiseBusinessReview.com.

1. Always Motivated

Everyone knows that you need motivation and drive to be successful in life. However, it is important to remember that when you’re running a small business you need to be able to not only motivate yourself, but motivate your employees as well.

2. Goal Oriented

Successful business owners are goal oriented, they know what they want to achieve and how long it will take them to get there. Additionally, having clear goals for both yourself and your employees will help keep everyone motivated.

3. Time Management

When you own a small business, time equals money. If you want your business to be a success you will need to understand time management, and be able to plan how to best utilize your own time and the time your employees are on the clock.

4. Money Management

In addition to managing time, as a small business owner you also need to be able to properly manage your money. Although money should not be the only reason you open a business, you do need to be able to judge what is profitable and what is not. Fortunately, there are tons of accounting programs that can make money management a lot easier.

Oprah: “I'll Pay the Taxes for My Aussie Giveaway”

According to TMZ.com, the Oprah Winfrey Show will take care of the tax liabilities of her recent Australian giveaway. Oprah made headlines a few years ago when she gave away automobiles to her audience members, and then left them high and dry when the enormous tax bills arrived.

TMZ spoke with Larry Edema from Michigan -- who was selected to be in the audience on Monday for Oprah's big giveaway -- and dude tells us Winfrey had a certified public accountant on hand to address the tax issue right after the taping.

Edema says the CPA informed the group that all taxes associated with the trip would be "handled by the Oprah show," so the trip would truly be 100% free.

The CPA also explained that O would cover all sightseeing costs and travel-related expenses -- including passport costs for people who can't afford them.

Read more here

Government Could Seek Foreign Investors for GM

From Yahoo News:

Investment bankers handling the upcoming General Motors Co. stock sale are expected to court foreign investors as well as those in North America, according to a U.S. Treasury Department statement.

GM and the Treasury Department would not comment Sunday on reports that the automaker is in talks with its current partner in China, SAIC, about buying a stake in the Detroit company. SAIC is owned by the Chinese government.

The Treasury Department, in a statement issued late Friday, said investors in GM would be sought across "multiple geographies," with a focus on North America.

The U.S. Treasury loaned GM about $50 billion to help it through bankruptcy protection last year. GM has repaid $6.7 billion. The rest of the bailout money was converted to a 61 percent government stake in the company.

The government hopes to get the remaining $43 billion back with stock sales that could start in mid-November.

Foreign investment in U.S. automakers and other companies is common. Before the stock sale, GM will put on a two-week "road show" of presentations for investors, and several stops are expected to be in cities outside the U.S.

Senate Passes $30B Small Business Credit Measure

The Senate passed new legislation on Thursday that will offer new tax incentives to business owners. According to Forbes.com legislators passed the bill in a 61 to 38 vote, which will establish a government fund to open up lending to credit-starved small business owners.

The tally gives President Barack Obama and his besieged Democratic allies in Congress a much-sought - but relatively modest - political victory with less than seven weeks to go before Election Day.

Obama said Thursday that the bill will help millions of small business owners across the country grow and hire. "These tax breaks and loans are going to help create jobs in the short term," he said.

The new loan fund would be available to community banks to encourage lending to small businesses. Supporters say banks should be able to use the fund to leverage up to $300 billion in loans.

The loan fund is opposed, however, by most Republicans, who liken it to the 2008 bailout of the financial system. They warn it would encourage banks to make loans to borrowers who aren't good credit risks.

Continue reading at Forbes.com…

483 Million GM Dollars = 483 New Jobs

Earlier this week General Motors announced their plans to invest $483 million in to their Spring Hill, Tennessee plant, which they claim will create 483 jobs. GM also explained that employees who had been laid off will be brought back to work at the new plant.

CNNMoney.com reports

Mark Reuss, president of GM North America, said his company would invest the money in the powertrain factory through 2012.

"By coincidence, the result in new jobs is 483," he said, before a crowd of cheering auto workers. "No, we didn't plan it that way."

The additional investment and jobs are pending successful incentive negotiations with local and state officials, GM said in an announcement.

The additional employees will be brought back from among workers GM had earlier laid off. The plant already builds three versions of GM's Ecotec four-cylinder engine. The additional jobs are needed to add production of a next-generation variant of the engine which, GM said, is more fuel efficient and runs more smoothly.

"The engines made in Spring Hill will drive the success of GM to meet our customer demands for advanced powertrains which offer high fuel economy without sacrificing performance," said Reuss, in a corporate announcement.

Read more here

Consumer Prices Rise, but Underlying Trend Flat

From MSN Money.com:

Underlying inflation pressures were muted in August, keeping deflation fears alive, even though a rise in food and energy costs drove overall consumer prices higher.

The core consumer price index was flat last month, the Labor Department said on Friday, defying financial market expectations of a 0.1 percent gain. The core CPI, which excludes food and energy prices, rose 0.1 percent in July.

While the report strengthened the Federal Reserve's bias toward further monetary easing, the data was not so weak that the U.S. central bank is expected to announce new steps to ease monetary policy when it meets on Tuesday to assess the economy, analysts said.

"It keeps alive the possibility that the trend could turn negative over the next year or two, but the numbers are not weak enough to encourage them to start a new purchasing program next week," said Jim O'Sullivan, chief economist at MF Global in New York.

The overall CPI rose 0.3 percent, lifted by higher food and energy costs, after a similar gain in July. August's rise was a touch above expectations of a 0.2 percent increase.

Obama to Tap Warren to Help Set Up Consumer Agency

President Obama named Elizabeth Warren as an advisor to help create his consumer financial protection bureau. The agency will be in charge of regulating Wall Street and enforcing new, strict financial protection law. Bloomberg.com posted a great article explaining the new bureau, check out a portion of their story below or read the full text here.

Warren will be an assistant to the president and a special adviser to Treasury Secretary Timothy F. Geithner, the statement said. The White House expects her to start immediately setting up the agency, which was established by this year’s Wall Street financial regulatory overhaul, said an administration official who spoke on condition of anonymity.

“The Consumer Financial Protection Bureau will be a watchdog for the American consumer, charged with enforcing the toughest financial protections in history,” Obama will say at a 1:30 p.m. Washington time event in the Rose Garden announcing Warren’s position, according to prepared remarks released by the White House.

Warren will play a role in determining who will be the first director of the bureau when it becomes an independent agency housed at the Federal Reserve, a decision that isn’t expected for several months, perhaps not until 2011, the official said.

‘Same Vision’

“The president and I are committed to the same vision” for the consumer bureau, Warren’s statement said. “I am confident that I will have the tools I need to get the job done.”

Senate Fails to Cut Tax Provision in Health Law

According to the Associated Press, on Tuesday the Senate voted against repealing a new tax reporting provision in the new health care law. Even the White House backed the proposal by a Senator Bill Nelson to exempt companies with 25 or fewer workers and raise the reporting threshold for businesses with more than 25 employees.

It was an inconclusive ending to an early skirmish over repealing part of President Barack Obama's signature domestic policy achievement. But it signaled battles to come if Republicans gain control of Congress in the midterm elections this fall.

Tucked into the health law is a requirement that businesses file tax forms called 1099s with the Internal Revenue Service for every vendor that sells them more than $600 in goods. Business groups say it would create a paperwork nightmare for more than 40 million companies as they struggle to keep going in a weak economy.

But Nelson's amendment failed a 60-vote procedural test 56-42. That vote came shortly after the Senate also sidelined, by 46-52, an amendment by Sen. Mike Johanns, R-Neb., that would have repealed the reporting requirement.

"We're stuck on this issue of whether or not businesses are going to have to file these 1099s," Nelson said.

The votes were a sidelight in a debate over broader legislation to help small businesses, but nonetheless they underscored the difficulty of making any substantial changes to the health care law.

Continue reading at Google.com…

Obama Won’t Re-Nominate Former DOJ Tax Division Choice

From Main Justice.com

President Barack Obama will not re-nominate his former choice for the Justice Department Tax Division, whose nomination the Senate most recently sent back to the White House in August, a White House official told Main Justice on Tuesday.

Mary L. Smith, whose nomination was returned to the president twice by the Senate, will “pursue other opportunities,” the official said. She is currently Senior Counsel to Assistant Attorney General Tony West of the Civil Division. Smith, a Cherokee Nation member, would have been the highest-ranking American Indian ever to work at the DOJ.

The former nominee faced resistance from Republicans who were concerned about her lack of tax law experience. Smith was a partner at the Schoeman, Updike & Kaufman LLP and former in-house counsel to Tyco International Ltd., the international security products and services conglomerate.

The president first tapped Smith for the post in April 2009. The Senate Judiciary Committee initially endorsed her in June 2009 without any backing from Republicans. Her nomination was returned to the White House for the first time in December. Obama re-nominated her in January, and she was reported out of committee again in February with no Republican support.

Smith was the last Obama administration Assistant Attorney General nominee waiting for a vote in the Senate when her name was returned to the White House in August. Indiana University law professor Dawn Johnsen, who had faced similar opposition to her nomination to head the DOJ’s Office of Legal Counsel, withdrew from consideration in April.

IRS to Hold Open House Sept. 25 for Veterans and Persons with Disabilities

In their newest press release the Internal Revenue Service announced a nationwide open house to be held on September 25 to help veterans and taxpayers with disabilities solve tax problems and respond to IRS notices.

One hundred offices, at least one in every state, will be open from 9 a.m. to 2 p.m. local time. IRS staff will be available on site or by telephone to help taxpayers work through issues and leave with solutions.

In many locations, the IRS will partner with organizations that serve veterans and the disabled to offer additional help and information to people in these communities. Partner organizations include the National Disability Institute (NDI), Vets First, Department of Veterans Affairs, National Council on Independent Living and the American Legion.

“Taxpayers have tremendous success solving their tax issues at our open houses,” IRS Commissioner Doug Shulman said. “I want to encourage veterans and people with disabilities to come in on Sept. 25. Just like we reached out earlier this year to small businesses and victims of the Gulf Oil Spill, we want to help other taxpayers put their toughest problems behind them.”

IRS locations will be equipped to handle issues involving notices and payments, return preparation, audits and a variety of other issues. At a previous IRS open house on June 5, over 6,700 taxpayers sought and received assistance and 96 percent had their issues resolved the same day.

At the Sept. 25 open house, anyone who has a tax question or has received a notice can speak with an IRS employee to get an answer to their question or a clear explanation of what is necessary to satisfy the request. A taxpayer who cannot pay a balance due can find out whether an installment agreement is appropriate and, if so, fill out the paperwork then and there. Assistance with offers-in-compromise — an agreement between a taxpayer and the IRS that settles the taxpayer’s debt for less than the full amount owed — will also be available. Likewise, a taxpayer struggling to complete a certain IRS form or schedule can work directly with IRS staff to get the job done.

Census: 1 in 7 Americans Live in Poverty

Earlier today the U.S. Census Bureau published its annual report on the economic well-being of American households. According to their data, 43.6 million people – or 1 in 7 taxpayers – lived in poverty last year. This represents the highest poverty levels since the 1960’s.

The Washington Post reports:

The poverty rate climbed from 13.2 percent, or 39.8 million people, in 2008.

The share of Americans without health coverage rose from 15.4 percent to 16.7 percent - or 50.7 million people - mostly because of the loss of employer-provided health insurance during the recession. Congress passed a health overhaul this year to address rising numbers of the uninsured, but the main provisions will not take effect until 2014.

The new figures come at a politically sensitive time, just weeks before the Nov. 2 congressional elections, when voters restive about high unemployment and the slow pace of economic improvement will decide whether to keep Democrats in power or turn to Republicans.

The 14.3 percent poverty rate, which covers all ages, was the highest since 1994. Still, it was lower than estimates of many demographers who were bracing for a record gain based on last year's skyrocketing unemployment. Many had predicted a range of 14.7 percent to 15 percent.

Read more here

Tax Education: Why it matters, and what should be done

Yesterday I read an interesting blog post about the consequences of tax education deficiency. In the post, the author uses the current estate tax debate to illustrate how easy it is for media and political pundits to mislead the public simply because most people simply have no idea how our entire tax system works.

It’s true. Think back to high school; did you have a class called “Taxes in America?” I’m willing to bet the answer is no. Even the required economics classes barely touch on taxes, let alone how they function and what that means to us as taxpayers. Unless your major in college was accounting, odds are pretty good you didn’t take any coursework in taxes at all. So, what does that mean?

There are a number of consequences.

The first being: we have no idea how to do our own taxes. This means we miss deductions and credits, we are not confident with what we put on our tax returns, and suffer from a general sense of panic at our tax situation.

Second: we make less tax-savvy choices with our money all year long. We over withhold our income taxes, which costs us money; we do not save for our retirement in tax-friendly ways, and we pay way too much in taxes as a result.

Third (and the original post’s point): we are vulnerable to being misled by the talking heads so prevalent in news today. Because we are lack education in taxes, we don’t know enough to question what is being shouted at us from the TV. The end result, we may be manipulated into voting in ways that are not in keeping with our true political ideologies. Simply put, we just don’t know when the truth is being stretched.

Of course I encourage every single taxpayer to take the initiative and learn about how taxes impact his or her own life. The big question is, is that enough? What would it take to educate our nation on taxes? Tell me what you think on Facebook and Twitter #taxeducation.

(hat tip: Mauled Again)

Bankrupt, USA: Why Our Cities Aren't Too Big to Fail

Although President Obama and Congress have assured taxpayers that financial giants will no longer receive bailouts, many economists are worrying that local governments may be in need of federal funds. Cities across the country, including Harrisburg PA, Central Falls RI are facing serious financial troubles.

According to CNN Money, Harrisburg’s city government was scheduled to default on a $3.3 million bond payment. Fortunately Pennsylvania's governor, Ed Rendell, pledged $4.4 million in state funds to help the struggling city.

This gives Harrisburg a chance to fight again another day. But its problems are far from over, and that's bad news for investors in the $2.8 trillion muni-bond market.

States from California to Illinois have been in deep crisis since the recession began, hammered by drastic cuts in tax revenue and inflexible spending demands for things like health care, debt service and pension plans. Forty-eight states grappled with fiscal shortfalls in their 2010 fiscal budgets. Totaling $200 billion, or 30% of state budgets, this fiscal shortfall is the largest gap on record, according to the DC-based Center on Budget and Policy Priorities, which sees at least 46 states facing shortfalls this fiscal year.

Some cities are in even worse shape than Harrisburg. Central Falls, Rhode Island, recently went into receivership when it couldn't pay its bills. San Diego is said to be considering bankruptcy to get out from under its pension obligations. Miami's city council, hoping to avoid Harrisburg's fate, recently used emergency powers to slash city salaries and pensions and is now instituting hefty traffic fines and garbage fees. This year, ratings agencies have cut the debt in several cities -- including Littlefield, Tex., Detroit, Mich. and Bell, Calif. -- to junk.

Continue reading at CNN.com…

Where Are They Now? Seven Villains of the Financial Crisis

After the financial crisis, a lot of people were looking for someone to point the finger of blame at, but as this article from Daily Finance, there are multiple individuals that contributed to the bank collapse.

In 2008, as the economy seemed to be in free-fall, pundits, politicians and the public cast about in search of the ultimate villain, the Wall Street weasel who could assume the blame for massive foreclosures, skyrocketing unemployment, and plummeting stock values. While the disaster was too big to pin on any single schemer, a handful of likely candidates quickly emerged.

Some, like Ken Lewis and Jimmy Cayne, seemed merely inattentive and inept, while others like Angelo Mozilo and Fabrice Tourre appeared to be actively involved in cheating the public. Yet, whether their position was in Wall Street or Washington, the CEOs office or the analyst's desk, all seven of the people on our list carried some measure of the blame for the events of 2008.

Two years later, most members of the class of 2008 have moved on to new jobs, cushy retirements or fresh challenges -- often involving the Securities & Exchange Commission. Yet, regardless of where they go, all seven will continue to carry the marks of 2008, the end of a ride that gave them billions in salary, yet cost them their reputations.

Jimmy Cayne: Playing Bridge While Bear Burned

In the two and a half years since Bear Stearns went belly up, the company's chairman of the board James E. "Jimmy" Cayne has become famous -- indeed, notorious -- for two things: smoking weed and playing cards.

Winner of 13 national championships, Cayne is among the world's top masters at the game. In 1969, he was playing bridge professionally in New York when fellow player Alan "Ace" Greenberg hired him to be a stock broker at Bear Stearns. Over the next 32 years, Cayne rose to become president, CEO, and ultimately chairman of the company; along the way, he continued to play bridge, becoming famous both for his playing style and for the rumor that he smokes marijuana after tournaments.

Regulator Says Banks Slow to Buy Back Bad Loans

From the Associated Press:

A federal regulator is criticizing banks for failing to take back bad mortgages sold to giant mortgage buyers Fannie Mae and Freddie Mac.

Edward DeMarco, acting director of the Federal Housing Finance Agency, says in testimony prepared for a House subcommittee hearing Thursday that the two government-controlled companies had tried to send more than $11 billion in bad loans back to lenders as of this summer, but have met resistance.

A third of those requests have been outstanding for at least three months. DeMarco said delays by lenders in repurchasing these loans are a "significant concern."

Investors who buy loans from banks have the right to force lenders to repurchase them if they later discover fraudulent statements on loan applications.

Fannie and Freddie buy mortgages and package them into securities with a guarantee against default. They have ensured that millions of Americans can get home loans — even after the housing market collapsed.

Bank Makes Rewards Harder to Earn With Card Changes

Although credit card companies try to promote their reward programs as valuable benefits to their customers, new reports suggest they less benefits to consumers then you would think. Earlier today WalletPop.com put together a consumer warning post about CitiGroup and how they are making it difficult for their customers to take advantage of their so called “rewards” program. Check out a section of their article below.

We've written recently about some tricky things credit card companies do that can whittle away at the value of your hard-earned rewards, and recent news reported in the Consumer Reports blog illustrates that banks are still trying -- and trying very hard, in some cases -- to keep you from getting those perks.

Consumer Reports says that Citigroup recently switched most holders of its Dividend Platinum Select MasterCard over to its Citi Dividend World MasterCard. One major difference between the two cards is that the Platinum Select offered 2% cash back in several commonly used retail categories like supermarkets, gas stations and drugstores. The World has a different rewards structure that puts the onus on the customer to keep earning their rewards.

With the World rewards program, users can earn 5% cash back on hotels and rental cars. This blog post says most of the new rewards are travel related, which is in line with the new card's enhanced benefits of trip insurance, lost-baggage reimbursement and the like. But if you got the card hoping to earn a nice cash-back bonus at the grocery store, you're out of luck. But there's an even bigger caveat: The reward categories change every quarter, some have lower redemption rates (in line with the old 2% rate) and - here's the kicker - customers have to remember to sign up for them every three months. No sign-up, no rewards.

Linda Sherry, director of national priorities for advocacy group Consumer Action, blasts the practice. "The idea of having to contact the company at quarterly intervals to continue your rewards is inconvenient and seems designed to avoid paying rewards," she told WalletPop via e-mail. What's more, she added, there's nothing in the CARD Act that prevents card issuers from pulling these kinds of switcharoos after you've already gotten established with your card. "This is precisely the reason we believe restrictions on one-sided contractual agreements is so important," Sherry said. "The current practice leaves consumers as sitting ducks."

Perhaps even more frustrating to the changes in the reward program is the fact that Citi issued new card numbers for every customer. In other words, if you had the old card and had any auto-bills or recurring payments set up, you'll have to tell all of those

Continue reading at WalletPop.com…

Senate Takes Up 'Job Killing' IRS Rule

The Senate is back in session this week after returning from recess, and the members have a lot of hotly debated issues to vote on. They are scheduled to decide on expiring tax cuts, and the health care law that would require small businesses to file more forms.

CNNMoney.com reports:

Lawmakers return to Capitol Hill this week after the summer recess and small business tops their to-do list.

Their goal: Help small business, and boost the economy. The Senate will consider two proposals right off the bat.

The broader measure is the Small Business Jobs Act, which includes a $30 billion fund to spur lending and $12 billion worth of tax breaks. The Senate will also decide whether to repeal a law enacted as part of health care reform that will require small businesses to file millions of new tax forms -- a provision a top Republican calls "job killing."

Main Street needs the help: Credit remains hard to come by, and without it hiring is suffering. In fact, small business hiring has been on a downward slide for the past two and a half years.

And both the number of small business loans and the total value of those loans have declined, according to data from the FDIC. The number of loans has dropped by 17.8% since the second quarter of 2008 and the total value of those loans plunged by $60 billion to $650 billion.

Read more here

Taxes & Identity Theft

Last week my YouTube team put together another episode in our tax tips video series. In the new video embedded below, host Edward Lester explains taxes and identity theft. If you enjoy the new episode then be sure to visit my YouTube channel for our archive of tax tip videos.

Worries Over Tax Hikes Coloring Business Decisions

From the Wall Street Journal:

The uncertainty over looming tax increases is starting to affect both investing and corporate decision-making.

The economy remains the biggest factor in many investors' and businesses' decisions. But worries over whether Congress will extend some of the expiring Bush-era tax breaks are emerging as another important one.

Stock prices of utilities, for example, recently have appeared to be factoring in the possibility of significantly higher dividend taxes next year, several analysts say. Some companies are pumping up dividend payments this year to beat the possible 2011 tax increase, and their shares have rallied.

Small-business owners say unease about tax policy, along with the economy, has led them to hold off on hiring and investment. And many advisers are encouraging well-to-do clients to sell appreciated assets to avoid higher capital-gains taxes.

Congress hasn't decided how to address the tax cuts from the George W. Bush administration, which are set to expire Dec. 31. President Barack Obama proposes to allow taxes on dividends and capital gains to rise to 20% from the current 15% for higher earners, defined as families with incomes of more than $250,000.

But many congressional Democrats want to let dividend tax rates, along with ordinary income rates, rise next year for higher earners to as much as 39.6%.

Top 10 Reasons To Visit IRS.gov

Finding updated and reliable tax information is not always easy. These days any one can publish an article online, and it does not necessarily mean the information is based in fact. However, the IRS’ official website has pages and pages of up to date content. NJToday.net even put together list of the top 10 reasons to visit IRS.gov. You can find a few items from their list below, or check out the full article here.

1. Unlimited access – get answers 24 hours a day seven days a week. There’s no need to wait to get a tax form or an answer to a tax question – visit the IRS website anytime. IRS.gov is accessible all day, every day.

2. Find out all about electronic filing. You can e-file your 2009 federal income tax return through October 15, 2010 from the comfort of your home. Available in English or Spanish, E-file is fast, easy and there are free options for everyone.

3. Check the status of your tax refund. Whether you chose direct deposit or asked IRS to mail you a check, you can check the status of your refund through Where’s my Refund? at IRS.gov.

4. Find out how to make payments electronically. You can authorize an electronic funds withdrawal, use a credit or debit card, or enroll in the U.S. Treasury’s Electronic Federal Tax Payment System to pay your federal taxes. Electronic payment options are a convenient, safe and secure way to pay taxes.

Continue reading at NJToday.net…