Monday, November 30, 2009

Tax Tip

I will be in continuing education classes Monday and Tuesday. Between class and working late to keep up on regular work, I will post late over the next few days.

Today, I'll whet your appetite with a small tax tip for today's economic environment. The first $2,400 of unemployment insurance compensation is tax-free for 2009. Wisconsin is not following federal on this and is a Schedule I adjustment. Use the worksheet to determine the amount of your unemployment that is taxable. For other states, check your state taxing authority.

Wednesday, November 25, 2009

I Am Thankful For...

It is too easy to whine and complain about the inequalities and injustices of life, at least for me. In this short post I want to share what I am so very thankful for.

I, Keith Schroeder, am thankful for:
  • a wonderful, loving, kind, gentle, and compassionate wife,
  • the two most moral, respectful and respectable, and intelligent girls I've ever known,
  • a successful business,
  • the best clients ant tax guy could have,
  • the best group of employees any employer has had the honor of working with,
  • a nice home,
  • a nice farm with animals to work everyday,
  • a community second to none,
  • a nation second to none, where rights are still honored and respected,
  • great friends,
  • all the opportunities life has to offer,
  • food on the table,
  • good books to read,
  • good neighbors,
  • health, family and mine,
  • life,
  • libraries,
  • organizations that allow me to enrich my life with service (WRWA, FVWA, church),
  • a wonderful, upbeat, caring, kind, God-fearing pastor,
  • Thanksgiving Day, when I am reminded to always be thankful for what I have, family around the dinner table, and a good game of football and conversation afterwards,
  • and you, my dear friends. Your friendly accountant is grateful for the opportunity to share my thoughts with you, whoever you are, wherever you are. May you find as much to be thankful for as I have.

Go in peace my friends. I'll be back on Monday.

Tuesday, November 24, 2009

Thought For the Day

Zig Ziglar sent me an email yesterday with some of his famous quotes. The quote that tickled me reads as follows: Maybe it wasn't meant that way, but American ends with "I can."

What a powerful affirmation. It is too easy to get down with the economy and personal problems. Thanks Zig for the upbeat reminder "we can do anything we set our mind to." Or as Zig is most famous for saying, "You can have everything in life you want if you will help enough other people get what they want."

Monday, November 23, 2009

When To Say When

I'm late today because I just got back from Atlanta. Forgive me.

Today's topic: How far should you push back on an IRS assessment? There is no hard and fast rule, but there are guidelines. If the assessment is small, it could cost more to fight than to pay. In my opinion, cutting off your nose to spite your face is foolish and a waste of time. This is the first consideration when dealing with an IRS assessment.

When the assessment is meaningful, you have a tough decision to make. If the assessment is due to an audit, appeals is your first defense. Every audit in my office ends up in appeals if the IRS assesses additional taxes, unless it is really small. Auditors look at verifiable facts only. They will deny any deduction due to lost receipts, etc. In most cases, it all comes back in appeals. Even if you played fast and loose, appeals frequently reduces the assessment, depending on the circumstances.

Appeals usually gives you about as much as you'll get in tax court. However, if they don't give that much, file with the tax court. The IRS has people that will work hard to get you off the tax court calendar. Be reasonable when filing, but don't rule out this powerful tool.

Sometimes it makes sense to file for abatement. If a large part of the assessment is penalties, abatement can help. Unfortunately, it is an all or none proposition; you either get full abatement or none. Fortunately, a lot of abatement requests are granted.

A Due Process Hearing is another option if you feel the IRS took an incorrect position. This requires its own post at a future date. Stay tuned.

And, of course, the Offer in Compromise. You see the ads on TV about IRS debt; that is what they are talking about. I recommend a competent local accountant instead of the TV guys. The TV guys charge a lot, tell you the offer will fly when they haven't followed the formula the IRS will accept, and have a low success rate. Your friendly accountant should have experience in Offers in Compromise and should have a reasonable fee.

It must be noted that federal taxes due have a statute of limitation of 10 years. That means the IRS gets 10 years to swing at you after you file your tax return or the due date of the return, whichever is later. If you own real estate, the IRS will attach it and the statute is less a tool for you.

The Offer in Compromise, tax court filings, and Due Process Hearings stop the statute of limitation clock while your request is considered. If you are approaching the 10 years and don't own real estate, you may wish to sit tight for the tax to expire instead. The clock restarts after the IRS rules on your request.

It is a good idea to get an experienced accountant on your side when dealing with these issues. At least now you can discuss your options with your accountant from a position of knowledge.

Good luck.

Thursday, November 19, 2009


A non-client business owner stopped in today for forms. I sent him to the local IRS office.

He was surprised we don't carry forms. Well, we don't; haven't for years. Everything we file is on the computer and filed electronically.

Regular clients allow me to plug the data into my computer and print clean copy. I don't have time to waste printing forms for non-clients.

Do not consider me rude. Time is money and I get about 200 requests per year. The IRS will provide forms online or at a local office for free. The government has the resources to hand out free forms, I don't.

The businessman went on to inform me he is currently working through an audit on his own and the IRS just opened several more years of returns. I told him he really needs a tax pro. He thought differently. I was a nice guy, however. As he explained the audit, I told him he will need to file an appeal to get the assessed tax reduced.

He smiled. I know he has no clue on how to file an appeal. The IRS will help reduce the tax burden for the rest of us on his dime. Too bad. He seemed like a nice guy. The IRS is taking him for a ride. I forgot to ask which auditor he has. I have a pretty good idea, anyway. Twenty-six years on the job and I have a pretty good feel for the way each auditor works.

The moral of the story: Spending a few bucks with your friendly accountant can save serious coin with the IRS. Oh, and you can order free forms from the IRS here, employers here, and state forms here.

Wednesday, November 18, 2009

Words to Ponder

At church this weekend a question was posed: What is the difference between knowledge and wisdom?

Several attempts were made before the answer that silenced the sanctuary was said: "Knowledge is what we take with us; wisdom is doing/knowing what leads to the most good and avoids the most evil/bad."

Isn't that beautiful?

Words can be a powerful builder, motivator; or, a dangerous weapon. I keep a collection of wise words I've heard through my years. When I hear words like those above, I am moved to live my life in a better way.

May we all know the meaning of wisdom and granted the strength to practice it.

Sunday, November 15, 2009


My day started at 4:30 this morning and I am tired. As a result, this post will be short.

Friday night I surprised the girls. I offered to take them to Funset Boulevard for pizza, games, and a movie. They were allowed to bring a friend. They chose a neighbor girl.

The girls had a lot of fun. Brooke ran wild from game to game. I was exhausted just following her. Sue needed paddles after an hour.

The girls decided to watch 2012. It has been years since I watched a movie in a theater. 2012 disappointed. The science was all wrong; nearly everything that happened stretched the imagination to the breaking point. The movie lacked plot and leaned on special effects and apocalyptic imagery completely.

Here is an example of the stupidity in 2012. A wealthy Russian needs to get from Las Vegas to a rescue ark in China. They need to stop in Hawaii to refuel. Of course, Hawaii is a mound of molten lava. They continue, acknowledging they will run out of fuel over the South China Sea. While enroute to China, the Earth's crust shifted over 1,500 miles and in the perfect direction to get them to within a mile or so of their destination. As crazy as this sounds, the Earth's crust shifting 1,500 miles in a matter of hours is only one in a litany of errors that beg the watcher to turn off the brain and accept any idiocy they dish out.

I enjoy a good movie and I love special effects, but give me a real story. Stretch the rules to make a better story if you must. But, please, please, don't expect me to be a complete idiot. I know more about science than the average person. Regardless, I think any layman will find 2012 too much to accept. I dislike movies that assume only idiots will watch. It will be a long time before I lay down hard earned dollars on such drivel again.

Wednesday, November 11, 2009


The amount of email I receive grows every day, spam excluded. The length of email messages keeps growing, too. It feels like people want to ramble on when writing an email.

There is a downside to writing a long email: I don’t read them. To be more precise, I skim. If I read every email received, my day would be nothing but reading email.

Another habit I see growing is the long email response to a short email request. Example: I inform a business client I need more information to complete a project. The client then has four or five people within the organization send me emails as long as 3,000 words. You know what happens when I get email bombed? I send it to a folder for later review, unread. Do you know what the chances are I’ll ever have the time to go back and read all those emails? Sure you do.

Writing an email is not the same as writing a novel. Brevity is a must when communicating. Otherwise, you get tuned out.

Most posts on this blog range from 300 – 500 words. Do you know why? Because after 250 words, half the readers are already skimming or clicking elsewhere. Don’t believe me. This post is just over 200 words. Are you looking to click on another post or link?

Reading email is different than reading a book. I read a book to relax and dig in deep. I read email for quick pieces of information. If the email rambles, I leave. In the few instances I weathered the storm to the end, I find the email continued to ramble and never accomplished anything.

So, what did we learn in today’s lesson? Keep emails brief or they’ll end up in the “worry about it later” folder. We also learned that once you set a pattern of useless, wordy emails, future emails are never opened until everything else is done.

Look at that. Just over 300 words and only one sentence fragment.

Tuesday, November 10, 2009

Have Problems? Read On.

Below is an email I received today from Zig Ziglar's son, Tom. For those who don't know, Zig Ziglar fell down stairs two years ago and is struggling back from the injury. He just turned 83. What a remarkable man; what a remarkable life.


It has been an incredible few weeks for the Ziglar family. Dad just turned 83, Mom and Dad will be celebrating their 63rd wedding anniversary later this month, and Julie and Dad's new book, Embrace The Struggle just came out. We are thrilled with the results of the book. So many are facing their own struggles and when they see how Dad is embracing his struggle they find hope and encouragement.

To see a short movie showing Dad's struggle, click here.

I know that Dad has made an impact in your life, and in the lives of thousands of others. As a family, as hard as this struggle has been on a personal level for us, we all agree that God is using it in an amazing way. We believe this message will impact more people than anything Dad has ever done.

Join Zig Ziglar for a special evening as he discusses how he has learned to embrace and even thrive during a time of struggle. Julie and I will join Dad as we discuss how anyone can survive during tough times. I think you are going to love hearing directly from Zig how he is doing.
If you could help us get the word out it would mean a great deal to us and to the people who attend the webcast. In addition to signing up to attend this webcast you will also want to forward this to all your friends and post it on your Facebook, Twitter, etc.
Embrace the Struggle

Featuring Zig Ziglar, Julie Ziglar Norman and Tom Ziglar November 17, 2009, 7:00-8:15 PM CSTRegister HERE

Tom Ziglar
Proud son of Zig Ziglar

P. S. If you want to purchase a copy of the book, click here.

Ziglar, Inc.5055 W. Park Blvd, Suite 700Plano, Texas 75093

Monday, November 9, 2009

Volunteer When to Pay Your Taxes

You can choose when to pay some of your taxes. I touched on this issue last week Thursday when discussing bonus depreciation for businesses. Individuals need to think hard about tax planning, too, with future individual tax rates likely to rise.

For many years, the mantra was to defer taxable income and accelerate expenses. Except for those hit by the Alternative Minimum Tax (AMT), the theory worked well. You have control on when certain items (property tax, contributions to charity) are paid and are thus, deductible. Time value of money says to take your cash now, so we happily deferred our tax bill with a little planning.

Depending on your tax bracket, deferring taxes is not the default choice anymore. You now need to consider future tax increases into your tax plan. Today’s savings could cost you dearly the next year. Think of poor tax planning as a high interest loan on foolishness.

I can not give specific advice in a blog. The tax code is changing too much for me to give blanket advice. You can keep your tax bill within reason if you take steps to protect yourself. Talking to your friendly accountant April 10th is not taking appropriate steps. The time for action is now. I don’t care who your tax pro is; call them now and set an appointment to review your tax status. You would be amazed at the things I come up with to help clients that come in now. Come spring, you just pay the revenuer.

Friday, November 6, 2009


It should be illegal to engage in serious thought on Fridays; serious tax thought, at any rate. Next week I’ll present more tax saving tips. So today I will discuss an important habit of successful people: training.

I have the enviable position of working with people at various levels of success in their personal and business life. Certain traits highlight each group. As an optimist, I’ll focus on the winners.

One of the most common traits of the successful person is training. Profitable and growing business owners, even in tough economic times, almost always spend time training with seminars, audio tapes, and videos. The winners never stop looking for good ideas and implementing them.

It is interesting how winners train. A roofer may listen to regular doses of motivational tapes in addition to classes on new industry products and procedures. Your friendly accountant takes insurance classes, tax and accounting seminars, listens to motivational, spiritual, and business audio and video programs. Winners consider it wise to build a solid base of knowledge for the inevitable day when unforeseen difficulties arise.

And the one thing successful people do less than any other demographic is watch TV. Of the TV they do watch, much of it is viewing training and personal or business development videos. In their car they listen to tapes that further their career, build their business, or motivate.

Turning off the TV is not enough. Taking action is the one necessary key to get anything done. Success is a result of actions taken. You might fail. But as Wayne Gretzky said, “You miss one hundred percent of the shots you never take.” And if you are well trained, you will make a good number of those shots.

Enjoying a fulfilling marriage and raising intelligent, moral, decent kids takes work. I know work is a four letter word, but not all four letter words are dirty. Work is a good word. To have a marriage second to none and to raise successful kids requires more than a piece of paper (marriage license or birth certificate). Modeling marriages that last the duration and families with kids that grow up as valuable citizens of the community is important. There is nothing wrong with taking classes on being a better parent, husband, or wife. You don’t need to wait for disaster to attend a seminar on building and maintaining a wonderful marriage. You don’t need to wait for your kids to try drugs before talking with them about these issues and listening to self-development programs for teens. Doing these things is not an admission of defeat, rather a commitment to a great family life.

Challenges will arise. You need to be prepared. And if things always go well for you, you still had the opportunity to learn, grow, and enjoy.

Thursday, November 5, 2009

Home-Buyer credit Extended, Expanded

All that is left is for the President to sign the bill and the $8000 new home-buyers credit is extended to April 30, 2010. The credit is expanded to include a $6,500 credit for those owning thier home for at least five years.

Plan accordingly.

Wednesday, November 4, 2009

Tax Tip: Standard Deduction Increasers

It’s that time of year to get serious about tax planning. With nine weeks before year-end, time is running short to reduce your tax burden for 2009. I’ll rapid fire tax tips over the next few weeks, so check in often.

Today, we will discuss the additions to the standard deduction.

There are three things that will increase your standard deduction for 2009. 1.) Property taxes up to $500, $1,000 for married filing joint returns. 2.) Casualty loses in a federal disaster area. 3.) Sales tax on a new vehicle purchased after February 16, 2009 up to a $49,500 purchase price. Multiple vehicles qualify. Phase-out begins at $125,000 for singles, $250,000 for joint filers.

Issues to keep in mind: Alternative Minimum Tax and phase-outs. Normal tax planning goes out the window if you pay AMT. I’ll cover AMT in another post. Your deduction gets reduced (phased-out) after your AGI exceeds a certain level. Note: The personal exemption and itemized deduction phase-outs disappear in 2010, something to consider when building your tax plan.

Contributions to charity, elective medical and state taxes can be planned to take full advantage of the new rules, allowing for maximum tax savings between the standard deduction and itemization. By bunching deductions every other year, it is possible to itemize some years, taking the standard deduction in alternate years.

Any tax plan must consider future tax years. Keep 2010 taxes in mind when planning.

With all the new tax changes this year, I recommend you sit down with your friendly accountant and plan your tax strategy. The tax savings should be well worth your time.

Tuesday, November 3, 2009

New Clients

New clients always get me excited. I get the largest tax reductions when a client comes in the first time. Below is a list of some things I need to see on your first visit (for businesses):
  • Previous two years tax returns.
  • Do you work out of your home? Have a shop? Office?
  • Are you a sole prop, partnership, corporation, LLC?
  • Future plans for business.

There are so many ways to reduce taxes for business. Individuals can save, too, but it is more difficult.

I set a goal to bring in 100 new business clients by the end of 2010. I have 6 since setting the goal. It isn’t hard or unusual to save $3000 - $5000 for a new business client. If I use the low end number, my new business clients will save $300,000 in taxes over the first year. Not bad.

Regular clients can save, as well. I send out letters each year inviting clients to review their tax situation. A handful of individuals and a quarter of my businesses take me up on the offer. That is too bad, since only those that take my offer reap the benefits.

Here is the offer I make my clients: I’ll charge $100 for the consultation. It will take 1-2 hours. If I can’t save you money, the consult is on me. If you don’t like my ideas, the consult is on me. The cost is low to start and if you feel you gained nothing, you owe me nothing. I think that is fair.

New client get their first consult free regardless. I need to know my client before I invoice for services. What do you think of my on-going offer?

Monday, November 2, 2009

More Censorship Stupidity

It seems that certain areas of college football don’t understand proper behavior. I’m talking about fines levied against players and coaches for disagreeing with referees.

Can you imagine people in authority demanding that all comments must be nice and agreeable under threat of sanction? Politicians would love this, so would business leaders (think Enron). Our world would be such a nice place if we held no one responsible for their actions. Wouldn’t we?

Our founding fathers felt it important to include freedom of speech in our highest law, the Bill of Rights of our Constitution. We should be teaching these kinds of things in our higher education institutions. Instead, we see a group of people that think they are above reproach. It never ends well. Once a group of people is able to work without criticism, failure is sure to follow. Others will want the same opportunity to work without responsibility.

There is only one reason for such a rule to be instituted by college football: they know they are wrong, they don’t want to change their wrong behavior, so they threaten those that would call them out and hold them accountable. If any referee has any honor at all, he would scream out against such a stupid rule.