Saturday, December 31, 2011

Happy New Year

Everyone at Tax Prep & Accounting Services, Inc. wishes you and your family a happy, joyous, and prosperous new year.

Happy New Year

Thursday, December 29, 2011

The Bustle is Back

The holidays bring a double workload in the accounting profession. Organizers are all in the mail this week and clients are setting appointments. Part-time staff are back training on the new software and learning new office policies. Clients are calling about last minute tax maneuvers.

The holiday bustle is only the start. Soon, office activity will run 16-18 hours a day with everyone working overtime.

The hyper-activity feels good. There is no feeling like it in the world. That moment of excitement when life explodes with action. I am giddy. I already have an appointment on the New Year's holiday. May as well work. Can't sleep anyway.

Saturday, December 24, 2011

Merry Christmas Everyone

From the entire staff at Tax Prep & Accounting Services, Inc.

Merry Christmas

Saturday, December 17, 2011

Small Businesses Get Paid to Hire New Employees

As I write this, Congress is debating an extension of the payroll tax cut. Last I heard, Congress will extend the tax break for two months instead of for the entire year. The tax break will not encourage employers to hire more, but the extra money in people's pockets should help the economy, hence encourage employers to hire people to get the extra work done.

Small business owners are not left out. Several tax breaks exist to help defray the cost of hiring new employees and retain them. Credits are also available on health insurance premiums, pension plan start-up costs, Indian employment, and employer provided daycare. These and other credits are good discussion points with your accountant. If your accountant doesn't bring up these issues, ask. One credit, employer paid FICA on tips, is 100%.

Wednesday, December 7, 2011

Want Small Business to Start Hiring Again? Here's How.

Small business has traditionally been the driver of employment growth for more than thirty years. When small business people hire, the economy grows. Large business also hires, but spends significant sums on equipment and downsizing the workforce at every opportunity. Large businesses have also outsourced large portions of thier workforce to other countries.

In the United States we are suffering the slowest employment growth out of a recession since the 1982 recession. The expected driver of job growth, small business, is absent so far in the anemic recovery. Several imoediments discourage small business from hiring, preventing a real economic recovery from taking hold.

As I work with small business owners daily, I see recurrent facts that hold them back from hiring. I also reflect on my own businesses and what keeps me from hiring additional staff. In this post I want to share my finding what needs to happen for business owners to commit to the large expense of additional employees. If we are all lucky, someone in government will read this and take the "real" steps needed to spark hiring, and hence, economic growth. By understanding how the business owner thinks, it will better position you to get a job if you are looking for one.

Costs: Hiring additional employees is expensive and employers are reluctant to commit to the heavy burden if they are uncertain about the future. In my office it costs around $75,000 in wages and benefits to hire one full-time employee. Throw in another $5,000 to $10,000 in expense to find a qualified employee, train them, run background checks, and get them registered with the IRS before they can file one tax return. This does not include the expense of sifting through all the applications, resumes, and interviews.

Once an employee is hired more expenses follow fast and furious. Employers pay Worker's Comp insurance, unemployment insurance federal and state, FICA taxes, and benefits. Unless you are in the accounting field you have a larger bill at the accountant for the additional payroll processing.

Costs are a major concern of employers, but not an overriding factor. If the employer thinks their investment in training a new employee will be profitable for an extended period of time they hire.  When the horizon is clouded, employers hold back, sometimes even turning down new accounts to avoid the added overhead of more employees. The cloudy horizon is the main reason small businesses are holding off on hiring more staff. As I will discuss later, rugulation and gavernment manipulation cloud the horizon, forcing potential employers to wait and see before hiring.

In my small tax office my business clients have hired more people over the last three years. However, these business would have hired more if things were more clear. A common conversation with business clients is on how business is going. Without exception, every business client I have has seen an increase in business activity. Most of these employers are delaying as long as possible any additional employment. Uncertainties in taxation, regulation, and givernment manipulation make the decision to hire a difficult one. Laying off a new employee just finishing training is a massive waste of resources.

Taxation: Taxes play a large roll in business decisions. The continued threat of taxing S corporations and large tax law changes around Christmas each year make tax planning more a guessing game than planning. Taxing S corporations would double taxes for most small businesses. Even a micro business could see their taxes increase $5,000 or more if this change is enacted. Most employers can not afford that kind of tax increase and additional employees. Until Congress and The White House make it clear this will not happen jobs will grow slow in the small business sector. This one tax law change could lead to 10% or more of all small businesses closing. Probably more. Most businesses do not have the ability to survive that kind of bady blow financially.

Small business needs a plan. When Congress waits until the last second to pass a tax law each year, business is forced to make decisions based on guessing what the tax code will read come January 1. When Congress waits to clarrify the tax environment, employers wait to hire. Small tweeks are one thing, but massive changes to the Code each year are getting old. When I know what I owe the IRS, I'll decide if I can afford another employee. Until then, regardless of need, no new hires. And most other businesses feel the same whether they say it in so many words or not. They feel the stress and will take steps are self-preservation. What else would you expect.

The tax code has also become overwhelming and burdensome. Taxes touch every part of the employers life. You can get a credit for hiring people, but few know about it. Employers also know that once the credit is gone the expenses still remain, so we need clarity before we commit, regardless of the candy Congress dangles in front of us.

I joke in my office that 29 years ago I started a tax business. Then I became the welfare office with all the new credits from child tax credit to the earned income credit. Now I will also become the Social Services building with the new health care bill working its way into the economy. The government saves money by pushing the work on the tax preparers without any compensation to the people doing the work. Soon, tax preparers will need to ask even more questions about your health insurance. How can accountants charge for work that will only cost the client without any benefit?

Once upon a time if your income was low, you didn't file a tax return. Now, you show up at the tax preparers office and get thousands in credits (a refund) without paying a penny in tax. Nearly half of Americans pay no income tax. Half of Americans have no vested interest in the success of the nation. Half give nothing to the common good, only take. I agree taxes need to be very low for folks with low income. But a negative tax rate? Really?

Regulation: No matter what your field of business, you are in the financial planning, medical, and insurance business. If you are a roofer, good for you. You also better be good at financial planning since you provide retirement services to employees. You better be good at medicine and medicine insurance, too, since you provide health insurance to employees or will be required to shortly. When you should be spending time improving your business so you can hire more employees, you are tucked away in the side office trying to figure out what all the terminology in investments and medicine mean. Many employers don't hire more people because they don't need more work in insurance and financial planning.

Imagine, Monday morning you arrive at work and your boss tells you where you can bank. You can bank elsewhere if you like, but will face a penalty for doing so. How would you feel? Would you give your employer a piece of your mind? Maybe quit your job? I argue banking is less important than your families health or your entire retirement. And your employer tells you which doctors you can see, which hospitals you can get care from, and which investments you can choose from for your retirement plan. Your boss might be a plumber, but he makes a large part of your retirement/financial planning and medical decisions for you. He is an expert on these issues. Right? It is beyond me why unions don't strike demanding employers give their members the cash to buy their own benefits rather than the one-size-fits-all plan they now get.

Employers don't want to be in the medical business unless thay are a hospital. Why hire more people when it includes all these distractions. All the electrical contractor wants to do is electrical work. He prefers insurance, medical, and fiancial experts handle their work on their own without his involvement.

Government Manipulation: Government manipulation comes in two forms: taxations and regulation. Both forms of manipulation force employers big and small to wait for clarity before adding employees.

A short time ago the tax code provided an $8,000 tax credit for certain home buyers. The government manipulation of the real estate markets had two negative effects. First, home prices were about $8,000 higher as people paid more for a home due to the credit. When the credit disappeared, home prices fell by an amount near the credits value. Second, people now will wait to buy a home. You never know when the government will offer another incentive. This one simple tax credit I believe has extended the demise of the real estate market longer than real estate sales and prices would have suffered without the manipulation.

Employers are forced to wait on hiring more people (or put in a new machine instead) due to government manipulation. Why, as an employer, should you take on the risks of more employment when the government can change the rules at a whim, leaving you holding the bag? The government needs to stop paying tax dollars for big business to turn food (corn) into gas (ethenol). Due to this manipulation we now have energy and food inflation. We can all drive less, but how much less do you want to eat? Farmers know corn prices could drop in an instant if government manipulation ends. Why take the plunge when the risks are so high and an all-or-none proposition?

Some regulation is needed. Many of the new tax incentives and regulation has business owners sitting on thier hands. Without clarity, investment decisions are on hold. And employees are an investment decision. A long-term one.

Here is How You Can Get Hired: What can a potential employee do to get a job in a tough job market? As an employer myself I can honestly say most job applicants elliminate themselves from contention. Resumes with serious spelling and grammer errors hurt. Wanting a job with no experience, no training, and no effort by the applicant to understand the job applied for ends any chance of employment.

Formal training is required for some prospective jobs. Many jobs require reseach for a real shot at getting hired. If you are applying for a specialty job that requires licenses or degrees, have those degrees or licenses. Research the company you are applying for. The shotgun approach never works. I deny all applicants that performed no research on my company. Know what services we offer. Don't tell me you would like to give accounting a shot and would like $20 an hour while you test the field. I'll save myself the headaches and hassles by not hiring you.

Act professional. Dress appropriately for the job applying for. Be persistent. A true story will illistrate this best. A business client of mine was not hiring back in the early 1990s due to a soft economy. A young man with a dream of working for that particular company filled out a job application and submitted his resume. The job interview went well but was told the company was not hiring, but they would keep his application on file. The young man did his reseach and knew details on what the company did and how they performed. That is how he got a job interview in the first place. Turned down after the job interview, the young man arrived at the business early every morning a greeted the boss with a million dollar smile.He asked politely if anything opened up since their last meeting. He did this for about a week when the boss invited the young man in and gave him a job. Why? The employer, my client, told me he always has room for more quality employees. Learn this lesson and you will have a job in no time. All risks aside, employers can always use more quality employees that want a job and not just a paycheck. Some will even hire new employees when they officially are not hiring.

My Side of the Desk: With everything said above, I have not hired a new employee in three years. Business was down three years ago, but up the last two years. This year I will hire one new full-time or two part-time employees. The additional work coupled with the cutback in hours by a current employee (she is retirement age) is forcing my hand, however reluctant. I dread the process. Sifting through stacks of applications, most from unqualified appliacants that never even took the time to read the full discription of the job offered, gives me a head ache already. Most will not want a job, only a paycheck. I have enough bills. As an employer, I want to make money off your work. You gets paid and I get a little for my efforts. Otherwise, what incentive do I have to hire anyone at all?

The future is cloudy, but necessity requires I hire at least one part-time person. From the employers perspective, I pray nonstop it works out.

If you stop by my office say "hello" to Karen at the front desk. I turned her down for a job when I wasn't hiring. too. She kept returning with a gut full of enthusiasm, outlining her skills that are a direct fit and benefit to my business. She had the skills I needed in an employee. I relented and hired Karen. Must be ten years now. Good thing she didn't park outside my front door. I would have had to hire her two weeks sooner. Now I'm scared she will leave someday. Then what will I do?

Saturday, December 3, 2011

Free My Coke Rewards Codes-December 2011

It's that time again when I share my stash of free Coke rewards codes collected over the last month. Good luck everyone.

You can get more Coke codes at:

12 Can Case Coke Codes


1.25 Liter Coke


12 Can Case Coke Zero


12 Can Case Sprite


12 Cab Case Pibb

2 Liter Sprite
2 Liter Coke
12 Can Case Orange Fanta
1.25 Liter Sprite

Thursday, November 24, 2011

Happy Thanksgiving

Let us take one day and reflect on all we have to be thankful for. And we all have things to be thankful for.

Live life with an attitude of gratefulness.

Best wishes from my family to yours.

Sunday, November 20, 2011

Fixing the Deficit is Automatic

All the talk this week will center around the deficit committee entrusted to come up with a plan to shave $1.2 trillion or more of red ink over the next 10 years. That will not happen and if it does, Congress will not pass the measures.

The good news is that debt reduction is on automatic. Without action, automatic spending cuts are already law and will kick in in 2013. This will make the Reepublicans happy. Numerous tax cuts will expire at the end of 2012. This will raise even more revenue than the automatic tax cuts will save. This will make Democrats happy.

The automatic spending cuts and revenue raisers will start after the election. Under the automatic measures, spending and taxes will look more like the late 1990's when the economy boomed.

What do you think the chances are Congress will not mess with the automatic budget adjustments and tax laws? Me too.

Monday, November 7, 2011

Free My Coke Rewards Codes-November 2011

For everyone collecting My Coke Rewards codes, here is a nice batch from the soda in the office.

A few simple disclaimers: 1.) First come, first serve; 2.) I don't play favorites; 3.) I will not send you codes directly; 4.) Check back often to see if I listed more. I have a large stack of soda in the corner in preparation for tax season. I'll list them in bulk once we open the cases. 5.) If you have codes to share, do so in the comments section.

24 oz Bottle Coke


12 Can Case Coke


12 Pack Pib


12 Can Case Sprite Bonus Code


12 can Coke Zero


2 Liter Coke


2 Liter Sprite


2 Liter Coke Zero


12 Can Fanta Orange


Tuesday, November 1, 2011

IRS Screws Up, But Taxpayer Wins

They should make a reality show on the daily drama in a tax office. I volunteer to use my office as I think some of the garbage the IRS comes up with is a joke and I enjoy a good laugh.

Few of my regular clients get audited and for good reason. My team works hard at filing an accurate tax return the first time. We can get aggressive, but only if we have a nail to hang our hat on. No wingers. When audits do occur, they are usually short with a small or no change. The same cannot be said about audits that come from outside the firm.

A regular client received his audit notice recently and we went to work. Preparing a tax return and preparing for an audit are two different animals. Preparing a return requires numbers to be placed in the correct spot with consideration toward tax savings. An audit is the process of verifying those numbers. The audit in question stood the test when reviewed internally. The IRS disagreed.

The auditor, new to the job, disallowed all business miles. The taxpayer's mileage log was in perfect order. The IRS demanded that additional documentation not listed in the tax code for the deduction to be allowed. I told the auditor he was full of... (Sorry, this is a family blog.) After months of discussion and no progress, I filed suit in Tax Court. The auditor called when he received notice of the suit. I told him to get ready to look like an idiot in front of the judge, a real tax professional. The audit was dropped, no change.

All those resources wasted. And to think: Why does Congress want to cut the IRS's budget for 2012? If Revenue used their money more wisely they could cut their budget in half without sacrificing a thing. But then again, I don't run the IRS.

Sunday, October 30, 2011

Raising Cain and Obama

My job requires review of potential tax changes and how they will affect my clients. One of the most radical proposals to change the tax code is Herman Cain's 9-9-9 plan. Much has been said in the news about the plan, but nowhere is it mentioned which class of taxpayer will be affected.

Herman Cain's tax plan is almost the complete opposite of President Obama's plan. Obama proposed a tax increase on all taxpayers making more than $250,000 per year. The American people and Congress gave a loud, resounding NO to this idea.

Cain's plan will give a tax cut to the people Obama wanted to tax more. Under Cain, people under $250,000 per year will pay more. A lot more. Half of all households pay no federal income tax. Cain's plan will introduce a 9% national sales tax that everyone will pay regardless of income. The second 9 is for the personal income tax rate. Since over half of all taxpayers pay less than 9%, most taxpayers will get a tax increase. Corporations will do well, however. Most regular corporations that pay at a 35% tax rate will now only pay 9%, the last of the three 9s. The idea is that the tax savings by businesses will get reinvested into the business to create jobs. That is why people start a business. To create jobs. Right?

Maybe we should be careful what we wish for.

I wonder what "Joe the Plumber" thinks about Cain's plan? He did say he would pay more taxes under Obama's plan. He should love the tax cut.

Saturday, October 22, 2011

Things Are Looking Up

I see more jobs than any time in my career. Fully half of all my business clients are hiring or have hired in the last few months. Tax Prep & Accounting Services hired three bookkeepers this summer, more tax preparers for tax season, and one or two more will be added this week to handle the phones and front desk duties. Either the national statistics are wrong, will soon reflect the growing economy, or my clients are the only ones experiencing economic expansion.

The only real explanation is the economy is finally gaining traction. Once the wheels start turning, the rust can get ground off, and America can be back in the saddle again.

It has been a long economic pullback. Even though the government says we are in a mild expansion for a few years now, it never felt like it was. Certain statistics tell me we are due for better days ahead. The average car on the road in nearly 10 years old, the oldest fleet on record. Households have reduced debt for several years. With lower debt and an old auto fleet, vehicle sales should continue to grow with all the jobs it requires. As old, worn out things need updating, either repair or remodeling is required or a new purchase.

I feel good for my clients. I feel good for their new employees. As people get jobs they can update old cars, furniture, or buy a home. The economy always works best when people feel good about themselves. We took a serious body blow in 2007 and 2008. When sentiment is crushed that hard it takes time to get back up and running again.

I hope we are all running again real soon.

Saturday, October 15, 2011

Who Needs a Job?

A few weeks ago I attended a four day weekend seminar on practice development. I am always looking for ways to increase my business, increase efficiency, and provide a better, more value added service, to my clients. The investment in time and money was well worth it.

Spending a long weekend in a hotel conference room for 12 hours a day is grueling work. The variety of topics required attention with a high level of concentration. The money investment was large and I wanted the most value for my dollar.

The first two days we covered acquiring clients and managing the work flow. Getting more work is the easy part. Getting the work done is the challenge. Since I had committed to adding a few more employees, I focused on the client acquisition methods taught with special attention toward moving work through the office in a timely manner without errors.

On day three we practiced what we learned. On day four, alternatives were offered. The one I want to talk about today is outsourcing in the accounting and tax industry. All during the presentation I wondered how America will ever produce jobs when even tax preparers and bookkeepers are looking to move work to India for a fraction of the cost. I listened to the details knowing I would never send my client information anywhere else. Many other accounting firms were far more interested in sending work abroad.

The company that presented their services touted the high level of education of their employees and security of data. The cost was around $12 per hour per employee. I would still be required to scan all documents into the system for the guys in India to do the work. It really is a turn-key service.

The cost of $12 an hour is only a mild advantage until you consider the additional costs of employment: worker's compensation, unemployment (federal and state), payroll taxes, and benefits. It is cheaper to hire someone to scan work in than to hire a professional. And other overhead, such as the space requirements for employees to do the work, adds up.

There are certainly advantages to outsourcing to another country. I will never do it in my office however. I want a personal relationship with my clients. If work is done in house, opportunities to save the client money increases. My profit margins are a little lower, but I hire Americans. It is worth the commitment.

And one more thing. Your accountant cannot send your social security number out of the country without your consent. Consent cannot be buried inside the engagement letter either. If your accountant/tax preparer asks you to sign such a form, get a new accountant. You want a tax/accounting professional committed to you.

The same rules do not apply to partnership and corporate tax returns. Bookkeeping either.

Sunday, October 9, 2011

Who Will Protect Us From the Better Business Bureau?

Shopping for a large purchase or service requires research. We ask friends where they bought and the experience; depending on the item, we check Consumer Reports; we scan the internet for information and reviews; and we check with the Better Business Bureau (BBB). But what do we know about our research sources? How unbiased is Consumer Reports? We all know to take online reviews with a grain of salt, but what about the BBB? Should we trust them?

The BBB has reputation as a trusted source of information on businesses. This trust comes from a history of providing consumers with reliable information on a wide variety of businesses. History, unfortunately, has nothing to do with the quality of information disseminated.

The BBB is funded by businesses that are members. Therefore, the BBB has an incentive to keep members looking good so the dues (money) keep rolling in.

A question never asked is: Who watches the BBB? What if the BBB used underhanded practices in the management of their organization? Would you trust the BBB if they spammed businesses or lied to get businesses to join? The bond of trust is fragile and destroyed by bad behavior. It takes a long time to build trust and only a moment to ruin it.

I can't speak toward internal policies at the BBB; I can share my experience with them and it is not flattering. Every year in January, just before tax season kicks off, the BBB in Milwaukee calls me with the good news someone inquired about my company. They refuse to tell me who made the inquiry. I am assured the inquiry is not a complaint, but if I joined the BBB they could provide more and better information on my business. The first year I thought nothing of the event; the second year I knew the gig was up. My thoughts: I only get one inquiry a year and just before tax time? Why is someone inquiring about my business with the Milwaukee BBB, a two hour drive away, when the Appleton BBB is only a few minutes away?

The answers are clear to me. The BBB lied to get at my checkbook. Trust is destroyed. I am not, and never will be, a member of the BBB. The values and ethics the BBB practices are unacceptable in my office. The BBB has every right to try recruiting me as a member. Doing so using underhanded procedures is not.

I no longer use the BBB as a research tool in my purchases as all trust is gone. I cannot help but wonder what other underhanded practices they employ. Would they tell me about bad reports about one of their members? Probably. But I really don't trust them anymore. I trust internet reviews more because there is an understanding the reviews are slanted to the writer's opinion and companies may pay for positive reviews. The BBB wants me to believe they are a more trusted resource when in my mind they are not. Since I don't trust anything the BBB says anymore, why bother looking to the BBB for information.

So I ask again: Who will protect us from the BBB?

Monday, September 26, 2011

Paper Losses

I visited one of my print shop clients recently to finish some tax reports and pick up bookkeeping papers. As he refilled his copier for the third time with 800 sheets, holding a ream of paper, he said, "And each pack of paper is short." My eyes glossed until the weight of his words sunk in.


"Yeah. Each ream is short. The average ream has 493 sheets instead of the 500 listed on the package."

I asked him how he knew this, knowing he would never sit down and count how many sheets are in a pack.

He pointed to his printer. "The machine prints the customer the right amount."

Argument settled and a lesson learned. Consumers of paper are suffering a paper loss and don't know it. And even though we are a paperless office, we still use enough paper to make the shortage count (pun intended.)

The 7 page average shortage is 1.4%. A small office may spend $10,000 a year on paper (accounting offices, at least.) This adds up to around $140 per year in losses. I don't know about you, but $140 means a lot to me. I feel violated. And now that you know, you do, too.

Welcome to my world.

Sunday, September 11, 2011

Where Were You?

Every generation has that moment where everyone remembers where they were and what they were doing. My grandfather's moment was the attack on Pearl Harbor; my father's, President Kennedy's assassination; for the current generation, 9/11, or to be more accurate, the planes hitting the World Trade Center towers. The plane crashing in Pennsylvania and into the Pentagon do not light our memories like the Twin Towers. The courageous efforts of those on United Airlines Flight 93 made the ultimate sacrifice by crashing the aircraft in Pennsylvania, saving another target from destruction. They should not be forgotten. The Pentagon is a military target and had less impact on people further from the destruction and not personally affected. They also shall never be forgotten.

I remember where I was and what I was doing when the news broke. I was watching CNBC as I dressed for work when newsanchor, Mark Hanes, inturupted the discussion to report a plane hit the North Tower of the World Trade Center. Live video of the smoking building filled the screen. I had two thoughts: How the h*%$ could a pilot hit a building in a city center, and, How will they (firefighters) ever get up there to rescue people and put out the fire. After a few moments I began to wonder how repairs are made in such a situation. At this point it seemed nothing more than a serious and unfortunate accident.

The horror was about to grow as reports came in this may be a terrorist attack. A short while later it was confirmed as the world watched live as Flight 175 crashed into the South Tower. I sat on the edge of my couch too numb to weep.

I stayed home that day and watched the horror unfold. My emotions ranged from angry, to sad, to depressed. My heart went out to the dead and their families, injured, and scared. The United States has not been the same since.

I have no cute remarks to end this post. There is nothing funny about the events on September 11, 2001. As the day ended ten years ago, I thought, Welcome to the Twenty First Century. The science fiction writers never told us it could be like this.

Use the comments section to share your story.

Monday, August 29, 2011

World's Best Investment

A common question in the office surrounds investment choices and returns. Where the client wants to discuss stocks, bonds, mutual funds, and gold, I want to encourage clients to make the best investment on the planet: an investment in themselves. All investments have risks, except the investment in one's self. Even government bonds can lose value to inflation and opportunity cost, even if the bonds are held to maturity.

There are several ways to invest in yourself. Night classes at the local tech school and the numerous seminars on every subject imaginable are a good start. Employers need educated employees and demand it in the current economy. A large number of office jobs require proficiency in Microsoft Word and Excel, plus QuickBooks. The investment to learn these programs well is low; the payoff is huge. A small amount of time and money can lead to a long-term job with good wages and benefits.

You can also pay off debt and build a retirement account. But leads back to stocks, bonds...

A story for another day.

Tuesday, August 9, 2011

Stealth Tax Increases

Just like 2008, the Republicans are getting everything they want, and asset values (stock market and housing) are dropping fast. The Democrats do not have clean hands either. Neither party focused on jobs and as a result, we have no job growth. Go figure.

But this blog post is not about jobs or spending; it is about taxes: should they go up, down, or stay the same. Republicans in Congress say raising taxes kills jobs. Ahhh, dummies... so does cutting spending. Less demand, no matter where it comes from, will not create jobs.

The GOP has worked very hard to raise your tax burden and you never knew they were in your pocket. When the policies of Congress destroy the value of your 401(k), IRA, and home value, this is a real and hidden tax. The brinkmanship with the debt ceiling was a colossal waste of time and created no jobs. Zero. Yet, the stock market dropped 15% in two weeks and housing prices look like they may start down again as economic activity stalls because there is no demand (government cutbacks) and hence, no jobs.

I don't know about you, but I would take a higher tax rate if I didn't have to watch my saving earn .1% in the bank, my retirement funds shrivel in the stock market (the Dow closed on December 31, 1999 at 11497.69), my home drop 40% in value, and felt secure in my job. Maybe I am nuts, but all this adds to a real tax increase. The only difference is who gets the money. If the government taxed a small amount more at least it would help lower the deficit. Instead, we just get to bleed more with no doctor in sight.

Can someone please lead? Real leadership. Please.

Wednesday, August 3, 2011

Free My Coke Rewards Codes-August 2011

I know a few of you collect My Coke Rewards Codes for prizes. I don't have the time or temperment to chase such corporate gimmicks. But I understand why other do. Below is a list of a few codes. If people like, I'll add more from time to time.

If you have extra codes you want to share, include them in the comments area.

Monday, August 1, 2011

Create Your Own Job

As the economy grows at a slow pace and jobs are scarce, a certain group of people have discovered the secret of previous recessions when applying for a job. These job opportunities are offered to anyone that applies. Unlike the past, fewer people are taking advantage of these jobs. These "create your own job" offers are called "starting your own business."

I have been in the tax business since the early 1980s and see business creation accelerate as a recession ends every time, until now. For some reason (maybe government interference and lack of a clear policy) people are creating jobs at a slower pace this time. When current employers refuse to hire, smart people find an unfilled demand and fill it.

Several of my clients have started a new business. Business ownership has its risks, but the rewards are really good, too. Starting a business as the economy leaves a recession has fewer risks as demand is increasing and there are ample opportunities to fill space vacated by businesses that closed during the recession.

Owning a business is not for everyone and has unique issues related to it. Still, nothing beats business ownership. Yes, the hours are long and risks abound. But losing one client does not break the company where losing the one and only job you have is a severe body blow.

The people that started businesses over the last year in my office have done well. It seems to me there is significant unfilled demand waiting to be filled. Some of these businesses may fail in the future, but for now things look all roses.

You can beat the odds when starting a business by following a few simple rules:
  1. Use little or no debt.
  2. Hire professionals to help you start and run the business (accountant, attorney).
  3. Start small, if possible, and build from there.
  4. Plan each step of the way. Have a business plan.
No debt and professional help go a long way in assuring the success of the business. The challenges of business can be overcome with hard work, perseverance, and planning. It is a great pleasure to see clients starting and growing their own business. It is good for my business, good for the economy, and good for the community.

Sunday, July 24, 2011

Will Higher Taxes Cost Jobs?

The debate about taxes in Washington is always the same: raising taxes will cost jobs. But what does history say about the subject? Will higher taxes cost jobs? Is there empirical evidence to support the claim?

Before we dig in too far I must point out I am not supporting one political party over the other, nor am I advocating for higher taxes. I merely point out historical facts on how tax increases affect job growth. No nasty emails, please. Respectful comments can be added below.

Income taxes in the United States began with the Civil War and were declared unconstitutional shortly after the war. World War I brought heavy financial demands on the Treasury, so an amendment was added to the Constitution allowing income taxes as we know them today. Income taxes started in 1913 and have continued unabated to today.

The first real opportunity to reduce income taxes significantly was after WWI. Major tax cuts to the top marginal tax rates in the mid 1920's lead to rapid growth in the economy. In a few years the over-heated, over-producing nation suffered a hangover called The Great Depression. The lesson learned is that lower top marginal tax rates provide a short-term boost to the economy followed by significant economic pain caused by the encouraged ramp-up in production. The lower rates encouraged current demand and sucked up future demand until a long recession was needed to work through the excesses.

Closer to home, President Kennedy reduced the top tax bracket from 90% to 70%. The 1960's were mostly good economic times. The economic issues of the 1970's were more related to demographics, expansion of the money supply during the Vietnam War, and oil shocks. Lowering marginal tax brackets that are very high seem to work long and short term.

President Reagan lowered top marginal tax brackets, too. Heavy emphasis was placed on encouraging supply by allowing fast expensing of assets for businesses. The economy boomed as employment increased and inflation dropped. The federal government ran large budget deficits during the entire period. If Social Security had the lower surpluses of today, President Reagan's deficit spending would have exceeded the rate of today's as a percent of GDP. The stock market crashed in 1987 by 22% in one day, the largest percentage drop on record. The economy only slowed without a recession and accelerated into the end of the decade before giving way to a real recession.

Like today, the 1990's saw a Democratic president and a Republican Congress from President Clinton's first midterm elections. Deficit spending that was acceptable to the Republicans under Reagan and Bush were untenable under Clinton. A tax increase coupled with spending cuts set the federal government up for the largest budget surpluses ever. But higher taxes did not kill the economy. Rather, the economy boomed with job growth, corporate profits, and the stock market walking hand in hand. Tax increases did not kill jobs in the 1990's because the top marginal tax rate was increased to 39.6%, a historically low top marginal tax rate.

Once Clinton left office, the newest Bush presidency set out to lower taxes by a massive amount. Deficit spending was back in place. More tax cuts over the first six years of George W. Bush created only a modest number of new jobs while expanding debt, public and private. By the end of the first decade of the Twenty-First Century the economy was in shambles, government receipts declining, job losses exceeding those created over the previous six years, and  nothing seemed to shake the sluggishness that set in.

Lower taxes did not help create jobs in the 2000's; slightly higher taxes gave us a job creating juggernaut in the 1990's. The tax code today has so many moving parts no one person understand the entire beast. Deductions and credits exist for every possible activity. Raising taxes by reducing deductions and credits should reduce the cost of complying with the tax code for individuals and businesses.

So the question remains: If we raise taxes will it cost jobs? It seems to me that a modest tax increase or a reduction in certain tax credits could actually encourage job growth. Any real effort to reduce Washington's red ink will require spending cuts and revenue increases.

Simplification of the tax code would provide real encouragement for businesses to hire. Businesses and individuals spend too much unproductive time gaming the tax system. A simpler tax code with fewer deductions and credits would allow certain tax rates to decline, especially for the middle class.

Remember, raising taxes are the thing to do as long as it is not my taxes being raised.

Wednesday, July 13, 2011

It's the Jobs, Stupid

I could have titled this post Wasted Opportunity, but elected for the more in your face approach. For two and a half months (or longer) Washington has focused all its attention toward the spending limit on their credit card when the real issue is jobs. Balancing the budget on spending cuts or tax increases will only slow an already comatose economy.

If anyone is serious about bringing the national debt under control it will require tremendous effort on the jobs front. More jobs also means a better economy. In a recent article I argued that government regulation and interference is holding back job creation. The other half of the story is what the government can do to jump start the economy via job creation.

Governments around the country are cutting jobs while the private sector is adding a small number of jobs. I agree with selective downsizing of government payroll. The government should not create jobs by hiring more people. Washington can create jobs by providing focused funding. A large part of our electric grid was built in the 1930's and is in need of an upgrade; out road look like a page out of a developing country and our bridges collapse from time to time; our transportation system is outdated and more efficient, high-speed alternatives, need investment. Honing spending to targeted areas of infrastructure is the fastest way to create jobs without installing another permanent level of government spending/bureaucracy.

All the debate on the spending limit, spending cuts, and/or tax increases has created no jobs and never will. When unemployment is over 9%, why are we talking about anything other than jobs?

If we had jobs and a better economy the budget problems would largely vanish. One third of the deficit is from lower tax revenues directly related to the slow economy. Unemployed people pay few taxes, payroll or otherwise. Another third of the deficit comes from increased spending on food stamps, unemployment, and other social programs to help the people harmed by the economic conditions. The remaining third of the budget shortfall will require attention in the future when jobs are on the upswing.

Every politician in Washington that is debating the budget when jobs are the real issue should be fired. Both political parties are at fault. The only time jobs are considered is when it is used as an argument to further a political agenda.

Stop talking about the debt limit. It creates no jobs. Raising taxes or reduced spending creates no jobs. If we spent the last three months talking jobs the way we talk credit limits our economy would be humming. Our trade deficit was over $50 billion in May. There is work to do. Now we need to get out of our way and start hiring.

Tuesday, July 12, 2011

Why the Post Office is Broke

The call is out: The U.S. Post Office is running at a deficit. The red ink is piling up at a rapid pace so it is time to raise postage rates to cover the shortfall. You would think under the current environment the Post Office would grasp at any stream of additional revenue. The Internet and electronic bill pay has reduced mail volumes with only one notable growth area: Netflix. Even with streaming, Netflix still provides a steady and massive volume of mail.

A few days ago I put a Netflix movie in my mailbox and raised the flag. When I returned home that evening the movie was still there and the flag still up. I called the post office to complain and was informed that if I have no inbound mail the mail carrier is not required to pickup outbound mail.

And now you know why the Post Office is broke. They drive past easy business.

Wednesday, July 6, 2011

Blame It On the Unions

In case you have not noticed, we have labor union issues here in Wisconsin. It started when Governor Scott Walker stripping collective bargaining rights from public employee's unions. Teachers (and others) went on the offensive and have 6 Republican and 3 Democrats facing recall elections.

I do not belong, nor ever belonged, to a labor union. I have been self-employed at some level my entire adult life with the exception of 18 months early on. I believe unions have good and bad points. Nothing is all good or all bad. The truth lies somewhere in the middle.

With the above disclaimer said, I want to posit a few facts. I intend no fights; I only want people to think about it. When labor unions were on the rise and later very powerful in the United States, the United States won two world wars and lead the planet economically, in standard of living, militarily, and with a vibrant middle class. As labor unions have declined, so have middle class living standards and our standing in the world on all fronts save debt accumulation.

If unions are so bad, why is this? If unions are so good, why are they in decline? Think about it.

Wednesday, June 15, 2011

I Don't Have to Pay My Loans Either

My wife and I have an ongoing spat. (OK, I am making it up to make a point.) The argument is centered around how much we should spend on certain items in our family budget. I think we should fill the fridge with food, fund the retirement accounts, and invest for the kid's college fund. I am willing to work a few more hours to pay for these things.

My wife thinks I'm an idiot. She can't wait to move my tail out of the house and bring in a husband that thinks like she does. She says we should work even fewer hours and cut spending. Who cares about college and retirement so far in the future. As for the leaking roof, my wife thinks a patch is better than replacement. Since she holds the checkbook, she refuses to pay the credit card bill and mortgage until I agree with her and cut our income and spending. I tell her she is nuts. She says she called the mortgage and credit card company and they were fine with us paying late if it helped us get out financial house in order.

The above example is exactly how Congress is acting with the debt ceiling limit. Wisconsin Rep. Paul Ryan says he talked with U.S. debt holders and was told a late payment is fine, especially if it leads to more fiscal responsibility later.

Back to our example. The due date for the credit card comes and goes without payment. Two weeks later the wife and I kiss and make up. The credit card is paid. No harm, no foul. Right?

Wrong! The bank now knows we are willing to leave bills unpaid even when we have the money to pay. The money was available to pay the credit card. We just chose not to pay it until we agreed to get along. The bank IS okay with the late payment because the interest rate was hiked from 8% to 18%. It will stay that way for years even with no future late payments.

Back to the real world. Do you really think U.S. debt holders will be fine with a missed or late interest payment? To a point, maybe. But really? No. Debt holders will now need a higher rate to compensate for the risk. Not just the risk of hard economic times, but lover's spats, too. Treasurys will no longer be the premium cash management tool they once were. All Americans will pay the price then for the stupidity of Congress and for a long time.

The Republicans and Democrats in Congress need to stop acting like an old married couple with an ax to grind and start acting like the professionals the American people thought they hired to run the country. Americans, and the world, are counting on it.

Sunday, June 5, 2011

Gus What?

Now that tax season is finally winding down I have the time to reflect on what I want to do with the extra three or four free minutes I get each day. (Yes, I know it is June. I'll explain later.) This blog post will help you understand how your friendly accountant thinks. It is insightful because I see a lot of people over the year and how they manage their money, time, and lives. I recently had a brainstorm that can help you in your life if you open your mind to the possibilities.

First some background. Tax season does NOT end on April 15th; it ends around Memorial Day. Tax season begins around mid-December with setting up tax software and mailing calendars and pre-appointments to clients. Between Christmas and New Year's Day the office is fully staffed with all non-tax preparing employees and additional part-time help. Pre-appointments take a lot of time to set up in the computer. Happy Holidays guys!

January is flush with year-end payroll reports, 1099s, and W-2s. All regular full- and part-time employees begin their tax season schedule the first workday of January. A few small tax returns straggle in by mid-January with a rapid influx the last few days of the month and escalating to season heights in early February.

With a large number of smaller tax returns done, March puts the rush on corporate returns due March 15th. By now the entire office is living on caffeine to keep going. But there is no time to lollygag. The April 15th deadline is fast approaching.

All this time, from mid-December to mid-April, I promise people I'll get to my other work as soon as tax season is over. And, like clock work, the phone rings 926 times with 23, 439 emails on April 16th. Every phone call and email starts with, "Getting ready to enjoy your vacation time?" I smile, but my teeth are grinding. I roll up my sleeves and dig in hot and heavy. By about June 1st I am reasonably caught up. Then I sit back, crack open a cold one and sleep the day away until next December. Oh wait! That last bit was my fantasy. Sorry about that.

I know what you are thinking. You think I am a lucky stiff that works half the year and takes it easy the other half playing golf and other assorted distractions. Well, I am sorry to burst your bubble, but, things only slow down from the hectic to the barely manageable for the last half of the year. What the slow down does allow is for some time for personal interests.

Accountants make their money (virtually all of it) in the first half of the year. It is common to work for six months at a loss to make a nice income in the spring. Accountants are also tight with a dollar. We have to be. The paycheck we get in late April needs to last until January. Compared to most accountants, I am even tighter. My wife says it takes the Jaws of Life to open my wallet. She also says Washington and Lincoln squint when my wallet is opened from the rare glimpse of sunlight.

Accountants are practical people. At least I like to tell myself such. That extra three or four minutes a day allows me to have a nice garden. I am up to four this year and am proud to tell you I should break the 1000 pound mark for harvested potatoes this year. I also added three varieties of grapes and raspberries this year. This fall we should can 50 or more quarts of pears and another 30 of plums. I make home-made wine (dandelion, red clover, current, and grape are my favorite), can and freeze hundreds of pounds of beans carrots, cauliflower, broccoli, and anything else I was crazy enough to plant. We also dehydrate hundred of onions, pears and apples.

I tell you these things so you understand where I am and how my thought processes work. You see, I like to extend the period of time I make money. I need something to add to the garden that takes only a modest amount of work, makes good money, and takes time outside tax season only. And that leads to today's topic: Gus What?

I have a small asparagus patch that has kept me satisfied for years. But this year I bought a few more crowns and propagated what I already have. Next year my production should skyrocket over 400%; the year after should exceed 2,000% of this year's take. Within five years I hope to harvest asparagus (which I affectionately call gusses) by the ton. Asparagus sells for $3-4 a pound in local grocery stores. One acre well tended can produce between 3 and 8 tones of asparagus. It takes an hour or so to pick an acre of asparagus. Asparagus picking season is one month where I live (from mid May to mid June). Asparagus keeps well if the cut ends are placed in cold water and kept in the fridge. Asparagus can remain fresh months this way. I can see a nice new side business developing.

This morning for breakfast I enjoyed gusses cut into one inch pieces, sautéed in olive oil, mixed with scrambled eggs until completely done, and covered in Tabasco. My god, I was in heaven.

Oh! I gotta go. My wife is coming and she doesn't like me talking these fantasies. She knows I'm just crazy enough to do it.

Friday, May 27, 2011

Sprint Rip-Off Report

On the advice of another, I switched my cell phone to Sprint. Great customer service was the main reason for the switch with better prices a close second. Let me explain how it worked out.

First, the service sucked. Call quality is poor on good days and worse the rest of the time. When I called Sprint customer service they told me if I didn't like the service I could switch back to where I came from. I live in a rural area where Internet is hard to get. I use the cell phone as my Internet portal for modest speed. Sprint says they provide unlimited Internet without throttling. Two point here:
  1. Sprint can't throttle you back when they are so slow to start with. On multiple speed tests they run at only a third of what they promise. Dial up is only an inch away.
  2. Unlimited access means little when it is near impossible to download at any reasonable speed. How much can you download in a month at .08 Mbps?
If all this were not bad enough, Sprint now adds a $10 per month mandatory charge called the "Premium Data add-on Charge." This is pure rip-off. I was never informed of the Premium Data Add-on Charge when I switched. Since I did not see the charge until the first bill a cancellation fee will apply if I switch back now. Considering the quality, the $10 is 100% rip-off. Consider it $120 wasted every year. It does make the cancellation fee look cheap compared.

The Premium Date Add-on Charge is mandatory on all new accounts with smart phones with 3G/4G capabilities. Most areas do not get 4G. My Sprint 3G works less than half the time, including when I am at work in town. Current customers will get hosed with this rip-off fee when they upgrade their phone. I recommend you upgrade to a real telecommunications company instead.

Save yourself the high blood pressure and aggravation. Avoid Sprint.

Monday, May 23, 2011

If You Have a Good-Paying Job You're an #$@%$#!

Where did it all begin? When as a society did we decided anyone with a good job and salary is the enemy? There has been loathing of doctors for a long time over pay issues. Loathing for other top-earners has been less intense until now. Now, anyone making more than $30,000 a year is the problem vexing our economy and society. But are they really the pariahs we make them out to be?

Over the weekend I read an article on Yahoo (I will not provide a link as it will be a broken link before long) that shouted a small town in California is up in arms over lifeguards making over $200,000 per year. The reality is far from the headline. Exactly two people in the entire department made over $200K in wages and benefits. These two people worked there for over 20 years and were in management, not sitting on the lifeguard towers. However, people interviewed thought lifeguards should work for free since they get to watch girls in bikinis all day long. Really! The lifeguards make in the mid-teens per hour. They are trained and work long hours, getting overtime pay on a regular basis. Is it really a crime to pay people for working a job? Especially if they enjoy the work?

Earlier this year the teachers got kicked around by the state of Wisconsin due to the perceived excess wages and benefits teachers receive. So it is wrong to make a good living teaching our children? I think it more productive to work on education solutions preparing our children for our high tech economy. Does it make more sense to keep our best teachers, pay them well, and work together toward solutions everyone can live with?

What is the psychology behind this "hate the well-paid people" movement? The message is clear. When you despise someone for making more money you are in effect telling your own mind you also deserve less no matter how hard you work. There are people that are overpaid. There are underpaid people, too. Shooting the rich will not make the poor better off; it will not lower unemployment or balance the budget. It will just make everyone afraid to get that better paying job for fear of being shot next. Sounds like radical socialism to me. How did that work out for the Soviets?

Friday, May 20, 2011

Bartering and the IRS

Bartering is making a comeback. The current economic condition has a lot to do with it. The number of questions I field on bartering in a year would be covered by the number of fingers on one hand with fingers to spare until this year.

Certain bartering is not taxable or reportable income. Incidental exchanges, such as carpooling or buying someone lunch is not a real barter transaction. Even if you and a friend go to lunch once a week and take turns paying the bill, there is no obligation for either to continue picking up the tab. Giving a neighbor a hand once in a while is also not bartering.

The kind of bartering the IRS is interested in is commercial in nature. Example: I prepare your taxes without a fee if you clip my lawn. The value of the preparation is reportable income. Barter exchanges are growing in popularity and are required to issue an 1099-B to members that barter through the club. Any exchange of services of a business nature is bartering and reportable income.

Bartering income is reported on Schedule C for most taxpayers. You may have expenses to reduce the profit subject to income and self-employment taxes.

Bartering is fun and rewarding. Remember to observe all tax laws so it remains an enjoyable pastime.

Wednesday, May 11, 2011

Get a Pay Raise By the Minute

It is possible to determine the class a person comes from by their attitude toward money. You can spot a spendthrift a mile away before they spend a single penny. The same is true of frugal folks. You should also note that wealthy people are more frugal than middle class families. There are exceptions to the rules, but they are rare. Frugal people gather a million dollar plus liquid net worth in a relatively short time and no one knows it by the way they act. Poor folks spend what they can to look richer and the middle class spendthrift lives beyond his means on borrowed money ( and borrowed time) exuding the illusion of wealth.

I know people that carry a card in their shirt pocket that lists what they earn at their job by the year, month, week, day, hour, minute, and second. Tell said person to buy a soda from a vending machine and you will get a quick answer that they need to work just over two minutes for that one soda.

Here is what the card looks like:


The example is a hypothetical person, not a real person or client. However, a lot of people make $60,000 per year. Adjust the numbers to fit your personal situation.

These experiences pushed front and center as I started reading Jeff Yeager's latest book, The Cheapskate Next Door. When he states in chapter one that he knows people that carry an income card in their pocket a few clients came to mind. Every one of these clients is well off or wealthy with a liquid net worth of seven figures or higher.

My dad always said, "Son, it is not what you make; it is what you do with what you make." It took me forty years to figure it out. It is easier deciding if you want to spend money when you can equate it with how much time you will spend at work earning it. Spend $50 and you need to work another two hours.

The slow economic recovery has people thinking about money in ways not done for decades. It is survival mode for many. When unemployment is about to run out it takes desperate measures. Why wait. Take the necessary steps now so desperation is averted later.

It is always a good idea to wait before making a purchase. Think through what it will really cost you in life spent at work paying for it. And heaven forbid you pay interest to pay for a toy. Many folks pay a third or more of their income on their home. That means you spend nearly three hours at work every day just to pay the loan. Is it worth considering a smaller home and taking those extra hours with family? The choice is yours.

Try this for a week only. I do not want a lawsuit if someone goes into septic shock on my advice. Write down your income by year, month, week, day, hour, minute, and second. Keep it with you at all times. Before every purchase anything, check your chart to see how long you need to work to pay for the purchase. I bet you will put several items back on the shelf. Then you can cut your hours at work or retire years or decades early. Like I said, the choice is yours.

Tuesday, May 10, 2011

The Cost of Working and the Myth of Inflation

As an accountant I like to chop things into little bits to understand the data. A balance sheet or profit and loss statement provides valuable information about a business. Chopping the financial statements into bits gives me a better view and understanding of the inner working of the firm; comparing earning from month-to-month or year-over-year shows if the business is growing and if profitability is on track.

Individuals face the same financial decisions businesses do. The income and expense categories are different, as they are from business to business. Let me illustrate a different way of reviewing your personal finances. You drive to work daily and fill the car up with gas every week or so. Most people would view this expense as a $50 fill-up when the expense takes place. This gives a broad and deceptive overview of the cost of going to work. If we chop the data we get this: gas is around $4 a gallon as I write and if you drive 30 miles round-trip to work and your vehicle gets 30 miles to the gallon, it costs you $4 a day just to drive to work. If you drive an SUV it gets very expensive fast. (I used easy numbers. Here is the formula: price of gas/vehicles MPG=cost of gas per mile driven x miles driven=cost of trip.)

We can break this down even further. Four dollar gas in a vehicle that gets 30 MPG used 13.3 cents of gas per mile. This cost excludes all other auto expenses (depreciation, insurance, tires, oil changes and repairs). If you had to drop 13 cents into a jar every mile you drove, would you view gas price differently? Would you change your driving habits? Maybe drive the speed limit, coast into stops, and accelerate slowly? Hard research proves doing so increases fuel efficiency by 20% or more. That would cut the cost of gas per mile by 2.66 cents or about $200 per year just driving to work. Two hundred dollars is a small sum, but added to multiple area of living expenses grows to a tidy tax-free sum. (You do not pay taxes on reduced personal costs.)

What does inflation have to do with this? First, inflation is difficult to calculate. If car prices remain stable but the new models contain extra features, is this not deflation? Your new iPhone has more apps or more free minutes than the last cell plan for 10% more. Is this inflation or more purchased stuff in the form of a package deal?

Inflation in a single product in theory changes people's behaviors. Gas price goes up so the vacation in closer to home or cancelled. The drive to work is slower. Conservative driving can increase gas mileage 20% which equates to an 80 cents drop in the gas price for you with $4 at the pump prices. Higher beef prices leads people to buy more chicken. It works with most products. If one price goes up a replacement or substitute is found.

Thinking about what things really cost in the most basic units provides additional information to manage your finances. With the economy struggling and inflation in food and energy, it is a good idea to manage money better than ever. You will reach your goals quicker when you know where you started, where you are, and where you are going. It is a good idea to understand what each step costs.

Sunday, May 1, 2011

All Good Things

It was easy to see when it was Friday afternoon in my office for a long time. The boss, me, had an extra lively bounce in his step as the week approached end. And everyone knew why. It was card night.

"Playing cards with grandpa tonight?" I was asked by everyone. You bet I am. In my home, in my dining room, my grandfather, dad, two nephews, friends, neighbors, and I would gather for a night of sheepshead, the best card game ever played. My daughters watched four generations of Schroeder's sit at the same table week after week and play an old German game of cards, tell stories, and laugh. But all good things must end.

For years I deluded myself, wanting to believe it would last forever. This tax season lost that bounce as my grandfather felt the weight of the timekeeper. In mid-March he played his last game of cards at my daughter's birthday party before heading to the hospital and then nursing home. I visited often, watching a strong man yield to ninety years of life. Then, around 3:30 Good Friday afternoon, the card game ended forever. Easter Monday the family gathered one last time to honor our patriarch.

Last Friday we gathered for cards again without grandpa. It was a quiet night. It felt wrong. In honor of grandpa, we will continue on, enjoying the company of friends and family. All will remember in their own way.

I stopped writing for months as the workload of tax season and the desire to spend quality time with family left me without time to write. I'll get back in the saddle and write more. Grandpa would have wanted that. Next tax season should be happier.

I have no regrets spending time with family all these years. At times my workload left me so tired I could hardly think; I still made time for family. I do not regret one moment of it.

One his deathbed, my grandfather never once talked about money or work. He talked nonstop about family and that game of cards. He was the hardest working man I ever knew, but what he found most valuable was family and the time he spent with us. There is a lesson in there for all of us.

Sunday, March 20, 2011

The Power of Focus

Recently I wrote about the power of momentum. Today I want to talk about momentum's close cousin, focus. Focus and momentum walk hand in hand. The quality of life equation includes many variables and focus in one of the important ones.

In my line of work focus is very important, it is required to get anything done and to have any quality of life. It is too easy to worry about work when at home and too easy to feel guilty when at work when I would rather be with family. Of course, this is a recipe for getting nothing done and feeling terrible all the time.

There are no magic bullets to hone focus. Focus is a muscle that needs regular exercise to function well. We have all experienced the "zone"; that place where we are hyper productive and focused on the task at hand. For me this is more than a feeling; it is an emotional place. Usually I require quiet time and a closed door to reach this place and focus my attention. Sometimes I play loud music as a mental closed door (Stephen King writes to loud music as his way of shutting out the world while he focuses on his work). You need to look inside yourself to find this "zone."

Guilt destroys focus faster than anything else. When I prepare tax returns or perform other accounting tasks I shut out the world and do not worry about home, family, health, neighbors, world events, and so on. I refuse to feel guilty or complain about my time away from family and friends. Long ago I decided I choose to work. I can live on a lot less if I really do not want to work as an accountant.

The same applies in my private life. I could care less about the office when at home with family. If work blows up, so it goes (as Kurt Vonnegut says). I enjoy and experience the moment at hand. It is all any of us have.

The real trick lay at the borderline. Sometimes I work from home. I never feel any obligation to do so, but when I really want to complete a large task I will log into the office and tackle a job. I write from home. This blog post is evolving less than two hours before a family social gathering. However, I am focused on writing this piece while I write it and will not give it a thought when with family. I have a few projects I could log into the office for this weekend, but opted to spend my free time with family. My grandfather is very ill and the clock is reaching its end. It is challenging to focus with issues so large and important. But I get better at it with age.

If you desire for better things, being a better father or mother, a better husband or wife, a better employee or boss, a better friend or neighbor, a better writer, a better accountant or any occupation of your choosing, better at anything, focus. Find that place where momentum takes place and quality of life grows.

Taxes are important. Deal with the issues and move on. Taxes are not life; taxes are a fact of life. Spend the required time each week or month gathering the information you need to manage your finances and taxes. Then move on to the important things. Focus on the task at hand so the remaining 99% of your life can be an exercise in enjoyment.

That's my story and I'm sticking to it. Now what was I doing?

Saturday, March 12, 2011

My Heart Goes Out To the People of Japan

If only we lived in a world without suffering.

Sunday, February 20, 2011

When You Must Absolutely File Married Filing Separately

Most married taxpayers should file a joint return as it is rare to cut your taxes by filing separately. Another overlooked reason for married taxpayers to file a separate return is to protect from spousal liability. This week a perfect example arose in the office on when to file a separate return.

A client informed me a family member of theirs had embezzled money from his employer. I had to tell the client that the legal issues are only the beginning of his problems. Once convicted or a plea agreement is reached, the IRS reviews the public documents and sends the taxpayer a bill for the unreported income. Yes, embezzled money is reportable and taxable income. Then the state will follow-up with their tax bill.

If the tax return with unreported income is a joint return, both spouses are fully liable. If the spouse that committed the crime ends up in jail, the other spouse will owe the entire tax bill. Since the criminal charges were already filed when the tax return was signed by both spouses, neither innocent nor injured spouse protection applies.

I feel bad for this family. They filed their tax return a few weeks prior to my knowledge of the situation. The wife will owe a lot of taxes her husband is guilty of creating.

If you suspect your spouse is gambling, or partaking in questionable business activities, or embezzling, file a separate tax return. You can always amend a “married filing separately” tax return to a joint return, but you cannot amend a joint return to a separate one.

Since these tax issues usually end up in the tens of thousands of dollars, think long and hard before you sign any tax return. It is very difficult to convince the IRS or courts you had no knowledge of the illegal act. When in doubt, pay the extra tax, and file your own “separate” return.

Monday, February 14, 2011

The IRS Will Accept All E-filed Returns Today

The IRS has completed its computer updates accounting for the tax law changes Congess made in mid-December. You can e-file your return after 11:00 a.m. local time today if you prepared your own return. If you paper file the delay will be significantly longer. If we prepared your return you do not need to do anything. I will file your warehoused return during the first available IRS drain. My office will call you to confirm IRS acceptance of your e-filed return. If you provided us with your email address, my tax software company will email you acknowledgement of your accepted return.

Friday, January 28, 2011

The Power of Momentum

Everyone has experienced the moments when things go right. It starts with something small going your way and continuing with repeated successes. The older we get the more we recognize the pattern. We fear the reverse when all goes wrong and work to prolong the moments that go right.

It is important to recognize any success as the possible beginning of a long period of wins. Deep inside we know that the wins are coincidence. We also know we personally have a lot to do with the series of positive outcomes. Once we recognize a win we kick in the after-burners and attempt to leverage our perceived advantage.

Then the inevitable happens. The string is broken. A setback slams us back into our seat. These moments allow us to reflect and learn. The sooner we jump out of the chair and start another string of wins the better.

Too many people allow a bad event to freeze them like a deer in the headlights. Taxes have the ability to destroy a lifetime with inaction. FEAR (False Evidence Appearing Real) keeps some folks locked in their own secluded world. Do not become a victim of your own FEAR.

Gather all your tax materials together. Take them to the accountant or assemble for self-preparation. Begin a new wave of momentum. Big things going your way are like a tidal wave of positive momentum.

The earlier you start your tax preparation, the sooner you have solid numbers to work with. Then your can tackle the issues and get on with life. Life is too short to waste months fretting about a potential tax bill. Get it done. Deal with the outcome. Then go and enjoy life.

Momentum, my friends. Momentum.

Saturday, January 15, 2011

Wisconsin Governor Walker Calls Illinois Businesses and Residents Idiots

Are people from Illinois idiots? I don’t think so. But Wisconsin’s new governor, Scott Walker, thinks so.

It all started a few weeks ago when Walker took office. He made the bold promise of adding 250,000 jobs in his first term. I admire the goal, but am concerned about the delivery. If the goal is not reached it almost guarantees he is a one-term governor.

It gets worse. Before his bold jobs claim he took the one action that would cost Wisconsin thousands of jobs. Governor Walker sent over $800 million to California as a gift. I understand California has greater economic issues than Wisconsin, but jeez. California will now get Wisconsin’s high-speed train. Will the governor include the California jobs created toward his promise?

Not only will Wisconsin lose the jobs building and operating the train, Wisconsin will also lose businesses. Several businesses that needed a better, faster, and more cost efficient transportation hub are now planning their departure from Madison, and to a significantly greater extent, Milwaukee. Governor Walker promised more jobs and all I see are jobs leaving.

Illinois has serious budget problems. To fill the gap, Illinois raised their top income tax bracket 66%. Governor Walker couldn’t contain himself. He brought back an old advertising champagne from years back called “Escape to Wisconsin.” He wanted all the folks from Illinois to know that they can escape to Wisconsin after the big tax increase in Illinois. Problem is Illinois’ top tax bracket went from 3% to 5%; Wisconsin’s top tax bracket is 7.75% and is assessed on lower income than Illinois’ top tax bracket. What Governor Walker wants the folks in Illinois to do is take another 50%+ tax hike over the 66% hike they already suffered. Really?

People in Illinois are not stupid. They know that 5% is less than 7.75%. Why doesn’t Governor Walker know this? Is he stupid? What Governor Walker really did was remind Wisconsin businesses that they can escape high taxes by leaving Wisconsin. Dumb, just dumb.

I know Walker has only been governor for a few weeks and that he did not create Madison’s budget mess. But jeez, Walker, you are not making things better.

I had high hopes our new governor would take the bull by the horns and solve some of Wisconsin’s budget problems. Now, after only two weeks, I would be glad if we just held steady.

Tuesday, January 11, 2011

Busy Bee

I would blog more, but my schedule is tight with year-end tax forms and my work over on Hubpages. HubPages has a financial planning writing contest and I am submitting each day on the subject proposed. I won 2 day this past week. Check it out.

Financial Planning Basics

Business and Hobby Losses

Alternatives to Bankruptcy Contest daily winner


Auto Loan Modification Scam Contest daily winner

Taxes, Student Loan Forgiveness and Bankruptcy

Use PayPal to Accept Credit Cards

Choosing the Best Accountant