tag:blogger.com,1999:blog-6364211701773389912024-02-21T03:10:10.261-06:00Tax Prep & Accounting Services, Inc.Cutting Taxes One Client at a TimeKeithTaxhttp://www.blogger.com/profile/00224167617509338587noreply@blogger.comBlogger229125tag:blogger.com,1999:blog-636421170177338991.post-74896877787690233242012-03-05T09:08:00.001-06:002013-01-31T11:54:49.770-06:00Wisconsin's Child and Dependent Care DeductionMost tax software gets this one right without any additional entries. If you prepare your tax return by hand you need to remember to claim this deduction if you qualify for the federal child care and dependent deduction. <br />
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Wisconsin added the child care and dependent deduction for 2011 tax returns and is simple to claim. All you do is take the amount on Line 6 of federal Form 2441 as your starting point.. You can claim this amount as a deduction on your Wisconsin tax return, limited to $750 for one qualifying person and $1,500 for two or more qualifying persons. Use Code 28 on Line 11 of Wisconsin Form 1. <br />
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Note: If your expenses are all covered by your employer, you do not qualify for the deduction.KeithTaxhttp://www.blogger.com/profile/00224167617509338587noreply@blogger.com5tag:blogger.com,1999:blog-636421170177338991.post-78912837410887227072012-02-12T13:35:00.000-06:002012-02-12T13:35:36.737-06:00Wisconsin's Job Creation DeductionUpon reviewing tax returns from other accounting firms and self-prepared tax returns, certain deductions and credits are missed on a regular basis. New deductions top the list along with state specific credits. When a new deduction shows up on the state tax return, opportunities are often overlooked. <br />
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Wisconsin's new Job Creation Deduction (Schedule JC) allows most employers a $4,000 deduction per full-time employee added in 2011. Large businesses (over $5,000,000 in revenue) only get a $2,000 deduction per new full-time employee equivalent. <br />
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Schedule JC is easy to prepare. Most software does a good job handling the deduction with problems coming from flow-through entities and calculating the full-time employee equivalent. These problems are solved with a manual entry. Even if a business added employees later in the year, it is still possible to get the deduction. The hardest part is determining what a full-time employee equivalent is. Simply stated, a full-time employee equivalent is an employee that is required to work 2080 hours per year, including hours from holidays and vacation. The employee may work fewer hours as long as they are required to work the required hours. Employees can be terminated for any reason and the deductions still applies while they worked. New employees are accounted for pro-rata.<br />
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You will need your unemployment reports for 2010 and 2011 for calculate the deduction. Schedule JC is a short form with few entries. Follow the instructions for determining how many full-time equivalent employees you have. If you have more in 2011 than 2010, you get a deduction.KeithTaxhttp://www.blogger.com/profile/00224167617509338587noreply@blogger.com1tag:blogger.com,1999:blog-636421170177338991.post-20277059114559307482012-01-09T21:06:00.000-06:002012-01-09T21:06:55.143-06:00If They Can Do It, So Can II am a student of business owners. In my line of work I see all kinds of businesses, how they function, and their level of success. My personal experience qualifies me to make comments on the subject. Tax Prep & Accounting Services breathed life under my personal name in 1982, taking on the name Tax Prep & Services in 1989, and its current form in 1992. I have managed real estate and financial services companies. So you don't think bad things of me, I also produce stuff on my farm. <br />
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Most businesses fail in the first 5 years. They fail due to too little business or too much business. Too little is easy to understand, but too much? Yes, too much business too fast requires advanced management skills most small business owners lack. A business owner producing widgets is great at making widgets. He has a difficult time delegating the task of production and managing the workforce. Sometimes the owner cannot do it. His skills in management are inadequate. <br />
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A new phenomenon (to me, at least) has struck small business. Several of my business clients have hours starting at 9 or 10 in the morning and end at 3 sharp to pick up the kids. Either I didn't notice this before or there is a new business model in town. The funny things about this phenomenon is that it works. The businesses that use it are very successful. Most have employees. The employees work longer, but the boss is out by 3. Period. <br />
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Seeing business owners running their business on reduced hours intrigues me. Why does it work? After questioning clients/business owners using reduced hours I discovered an important point. Owners that work long hours get less done due to fatigue, make more mistakes, and poorer decisions. Shorter hours allow for a fresher mind and greater productivity. They also enjoy their work more. <br />
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Employees get more work and hours in these businesses. The boss is out talking with new clients while staff gets the work done. Everybody wins. The boss leaves early, but works evenings or weekends when necessary. When the boss works 40 hours a week he is kinder to his clients and employees. He also enjoys his family.<br />
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Now you know. This new information has me thinking. Don't call me after 3; I'll be golfing. Talk to Jeff; he'll be there. Wait a minute. It's tax season. Forget it. I'll be in the office from 4 AM to midnight.KeithTaxhttp://www.blogger.com/profile/00224167617509338587noreply@blogger.com0tag:blogger.com,1999:blog-636421170177338991.post-59327864750543435572012-01-05T18:05:00.000-06:002012-01-05T18:05:38.035-06:00I Don't Want to Hear About ItMany people want to tell their accountant things they shouldn't. It is true accountants have limited privilege with clients. Certain matters you tell an enrolled agent or CPA remains confidential and your tax professional cannot be used against you in an audit or in court in certain instances. The key word though is "limited." Now is a good time to review what is and is not covered by privilege with an enrolled agent or CPA.<br />
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Accountant-client privilege only extends to <em>noncriminal tax matters before the IRS. </em>In state court, accountant-client privilege cannot be asserted. If you are engaged in tax fraud, your accountant can be compelled to testify against you. What is always confidential is any tax inquiry you make. If you want to explore ways to reduce your taxes, the discussion is covered by privilege. <br />
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Your accountant is subject to fines and prison is he knows you cheated on your taxes and signed the tax return anyway. So let me say this as clear as possible: I don't want to hear about it. <br />
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By the way, you will sleep better at night if you follow the rules, anyway.KeithTaxhttp://www.blogger.com/profile/00224167617509338587noreply@blogger.com1tag:blogger.com,1999:blog-636421170177338991.post-1661736787726947082012-01-03T08:00:00.005-06:002012-01-03T08:00:00.893-06:00Double Digit Interest Rates Are Back?Treasury bonds had a really good year in 2011 with the 10-year bond yielding under 2% at the end of the year for the first time since at least 1977 and the 30-year bond under 3%. This is good news for bonds at first glance. But is it?<br />
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An improving economy and a Federal Reserve ending Operation Twist, where short-term Treasury bills are sold to buy long-term Treasury bonds, comes to an end, leaving future gains for bonds in doubt. Unless the economy declines, interest rates will head higher in 2012. There are few reasons remaining for the Federal Reserve to continue pushing rates lower.<br />
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How high rates go and when is anybodies guess. History has an interesting reference though. When we consider the low 10-year Treasury bond yield at the end of 1977, one concern comes to mind. A few years later interest rates pushed toward double digits and later went well over 10%.<br />
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If history repeats, which is no certainty, interest rates could head a lot higher. There are notable differences, however. Inflation is less an issue today than in 1977. Demographics are significantly different. Tax rates are lower and greater global trade should keep inflation lower. Energy prices are less an issue today because of more efficient use of these resources. <br />
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The differences aside, one overwhelming fact remains: Interest rates can go from very low to very high very quickly. The good 'ol days of low interest rates are coming to an end. It might take another generation to see these rates again.<br />
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Anybody for a 14% 30-year Treasury bond?KeithTaxhttp://www.blogger.com/profile/00224167617509338587noreply@blogger.com0tag:blogger.com,1999:blog-636421170177338991.post-1009147876555981062011-12-31T07:58:00.000-06:002011-12-31T07:58:00.646-06:00Happy New YearEveryone at Tax Prep & Accounting Services, Inc. wishes you and your family a happy, joyous, and prosperous new year.<br />
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<strong><span style="font-size: large;">Happy New Year</span></strong>KeithTaxhttp://www.blogger.com/profile/00224167617509338587noreply@blogger.comtag:blogger.com,1999:blog-636421170177338991.post-8233018918448293982011-12-29T08:29:00.000-06:002011-12-29T08:29:51.255-06:00The Bustle is BackThe 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. <br />
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The holiday bustle is only the start. Soon, office activity will run 16-18 hours a day with everyone working overtime. <br />
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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.KeithTaxhttp://www.blogger.com/profile/00224167617509338587noreply@blogger.com0tag:blogger.com,1999:blog-636421170177338991.post-38437205741773938502011-12-24T07:56:00.005-06:002011-12-24T07:56:00.491-06:00Merry Christmas EveryoneFrom the entire staff at Tax Prep & Accounting Services, Inc.<br />
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<strong><span style="font-size: large;">Merry Christmas</span></strong>KeithTaxhttp://www.blogger.com/profile/00224167617509338587noreply@blogger.comtag:blogger.com,1999:blog-636421170177338991.post-91925885235034984492011-12-17T11:21:00.001-06:002011-12-17T11:23:00.344-06:00Small Businesses Get Paid to Hire New EmployeesAs 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.<br />
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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%.KeithTaxhttp://www.blogger.com/profile/00224167617509338587noreply@blogger.com1tag:blogger.com,1999:blog-636421170177338991.post-55305581740719003852011-12-07T13:00:00.001-06:002011-12-07T13:10:49.495-06:00Want 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.<br />
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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.<br />
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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.<br />
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<strong>Costs:</strong> 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. <br />
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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. <br />
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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.<br />
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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. <br />
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<strong>Taxation:</strong> 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.<br />
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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.<br />
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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. <br />
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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?<br />
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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?<br />
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<strong>Regulation:</strong> 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. <br />
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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. <br />
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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.<br />
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<strong>Government Manipulation:</strong> 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. <br />
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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. <br />
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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?<br />
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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.<br />
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<strong>Here is How You Can Get Hired:</strong> 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. <br />
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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.<br />
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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.<br />
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<strong>My Side of the Desk: </strong>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?<br />
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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. <br />
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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?KeithTaxhttp://www.blogger.com/profile/00224167617509338587noreply@blogger.com0tag:blogger.com,1999:blog-636421170177338991.post-15019338014538475722011-12-03T13:05:00.002-06:002011-12-07T09:57:43.034-06:00Free My Coke Rewards Codes-December 2011It's that time again when I share my stash of free Coke rewards codes collected over the last month. Good luck everyone.<br />
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You can get more Coke codes at:<br />
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<a href="http://keithtax.hubpages.com/hub/Free-Coke-Rewards-Codes">http://keithtax.hubpages.com/hub/Free-Coke-Rewards-Codes</a><br />
<a href="http://keithtax.hubpages.com/hub/Free-My-Coke-Rewards-Codes">http://keithtax.hubpages.com/hub/Free-My-Coke-Rewards-Codes</a><br />
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<br />
12 Can Case Coke Codes<br />
<br />
RX9007J975FJNK<br />
VL9L55N9F946M7<br />
FPTJ9X0WXVN5KP<br />
OFFTOXMJO7BVBK<br />
PP9WHL64B69HR0<br />
T69XWPB09LPRLR<br />
HT07TMT6RJKBWF<br />
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50775PTTVWTOTJ<br />
HTHRN7V97KL0R4<br />
47T7HJNW5BB07J<br />
5T6KMRNKV05THX<br />
49L00VVXX0NXBP<br />
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<br />
1.25 Liter Coke<br />
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65P4P5HMTLMWJF<br />
<br />
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12 Can Case Coke Zero<br />
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HK9VHJXL4F5TJF<br />
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12 Can Case Sprite<br />
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F5KPFW4LHBTH95<br />
NK5H05VNVWRMRV<br />
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12 Cab Case Pibb<br />
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<table cellpadding="0" cellspacing="0" class="style0" id="table_edit_11956972" title="click on a cell to edit"><tbody class="editabletbody" id="tbody_edit_11956972">
<tr class="evenRow;"><td class="centerCell unboldCell tableCell firstCell " nowrap=""><div></div></td><td class="centerCell unboldCell tableCell " nowrap=""><div>65TNRPHK9NM699</div></td></tr>
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<tr class="oddRow"><td class="centerCell unboldCell tableCell firstCell " nowrap=""><div></div></td><td class="centerCell unboldCell tableCell" nowrap=""><div>HX6WLL79X0JB9M</div></td></tr>
</tbody> </table></div><div></div><div></div><div>2 Liter Coke</div><div></div><div>VL970VHHPT65HT</div><div></div><div></div><div>12 Can Case Orange Fanta</div><div></div><div>7NR5KL5R5NNB7J</div><div>HLRXLRB7JBLLKH</div><div>BX970MBRHNKPNV</div><div></div><div></div><div>1.25 Liter Sprite</div><div></div><div><table cellpadding="0" cellspacing="0" class="style0" id="table_edit_15331869" title="click on a cell to edit"><tbody class="editabletbody" id="tbody_edit_15331869">
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</tbody> </table>KeithTaxhttp://www.blogger.com/profile/00224167617509338587noreply@blogger.comtag:blogger.com,1999:blog-636421170177338991.post-66043065143626443732011-11-24T01:16:00.001-06:002011-11-24T01:16:00.220-06:00Happy ThanksgivingLet us take one day and reflect on all we have to be thankful for. And we all have things to be thankful for.<br />
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Live life with an attitude of gratefulness.<br />
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Best wishes from my family to yours.KeithTaxhttp://www.blogger.com/profile/00224167617509338587noreply@blogger.com0tag:blogger.com,1999:blog-636421170177338991.post-45791205539397168812011-11-20T21:42:00.000-06:002011-11-20T21:42:49.264-06:00Fixing the Deficit is AutomaticAll 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. <br />
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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. <br />
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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. <br />
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What do you think the chances are Congress will not mess with the automatic budget adjustments and tax laws? Me too.KeithTaxhttp://www.blogger.com/profile/00224167617509338587noreply@blogger.com0tag:blogger.com,1999:blog-636421170177338991.post-12400095409440367972011-11-07T12:52:00.002-06:002011-11-07T13:02:29.914-06:00Free My Coke Rewards Codes-November 2011For everyone collecting My Coke Rewards codes, here is a nice batch from the soda in the office.<br />
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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.<br />
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24 oz Bottle Coke<br />
<br />
994R05HNMNWR7R<br />
5V54HNVK967HB7<br />
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12 can Coke Zero<br />
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FXPWX9WJ5TJBX4<br />
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2 Liter Coke<br />
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75HXM0PHP00B5T<br />
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5NLBW777LV5JHJ<br />
TPKM76HXMJTLPH<br />
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2 Liter Coke Zero<br />
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<tr class="oddRow"><td class="centerCell unboldCell tableCell " nowrap=""><div>7VFBPKFWM9HK<br />
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</tbody> </table>KeithTaxhttp://www.blogger.com/profile/00224167617509338587noreply@blogger.com0tag:blogger.com,1999:blog-636421170177338991.post-60124228358835680022011-11-01T13:48:00.000-05:002011-11-01T13:48:00.771-05:00IRS Screws Up, But Taxpayer WinsThey 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.<br />
<br />
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.<br />
<br />
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.<br />
<br />
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.<br />
<br />
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.KeithTaxhttp://www.blogger.com/profile/00224167617509338587noreply@blogger.comtag:blogger.com,1999:blog-636421170177338991.post-42744093107939930102011-10-30T15:44:00.000-05:002011-10-30T15:44:12.004-05:00Raising Cain and ObamaMy 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.<br />
<br />
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. <br />
<br />
Cain's plan will give a tax cut to the people Obama wanted to tax more. Under Cain, people<em> under</em> $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?<br />
<br />
Maybe we should be careful what we wish for. <br />
<br />
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.KeithTaxhttp://www.blogger.com/profile/00224167617509338587noreply@blogger.com0tag:blogger.com,1999:blog-636421170177338991.post-34206637350030519952011-10-22T20:01:00.000-05:002011-10-22T20:01:58.668-05:00Things Are Looking UpI 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. <br />
<br />
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. <br />
<br />
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. <br />
<br />
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. <br />
<br />
I hope we are all running again real soon.KeithTaxhttp://www.blogger.com/profile/00224167617509338587noreply@blogger.comtag:blogger.com,1999:blog-636421170177338991.post-21860511581222154152011-10-15T10:07:00.000-05:002011-10-15T10:07:21.016-05:00Who 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. <br />
<br />
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. <br />
<br />
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.<br />
<br />
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. <br />
<br />
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. <br />
<br />
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.<br />
<br />
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.<br />
<br />
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.<br />
<br />
The same rules do not apply to partnership and corporate tax returns. Bookkeeping either.KeithTaxhttp://www.blogger.com/profile/00224167617509338587noreply@blogger.com2tag:blogger.com,1999:blog-636421170177338991.post-61827371008223517312011-10-09T09:36:00.009-05:002011-10-09T09:48:35.571-05:00Who 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?<br />
<br />
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. <br />
<br />
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. <br />
<br />
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. <br />
<br />
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: <em>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? </em><br />
<br />
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. <br />
<br />
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.<br />
<br />
So I ask again: Who will protect us from the BBB?KeithTaxhttp://www.blogger.com/profile/00224167617509338587noreply@blogger.com0tag:blogger.com,1999:blog-636421170177338991.post-2627273029551849312011-09-26T15:12:00.001-05:002011-09-29T22:29:00.352-05:00Paper LossesI 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. <br />
<br />
"What?"<br />
<br />
"Yeah. Each ream is short. The average ream has 493 sheets instead of the 500 listed on the package."<br />
<br />
I asked him how he knew this, knowing he would never sit down and count how many sheets are in a pack.<br />
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He pointed to his printer. "The machine prints the customer the right amount." <br />
<br />
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.)<br />
<br />
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 $140 means a lot to me. I feel violated. And now that you know, you do, too. <br />
<br />
Welcome to my world.KeithTaxhttp://www.blogger.com/profile/00224167617509338587noreply@blogger.com0tag:blogger.com,1999:blog-636421170177338991.post-26940398520946994282011-09-11T10:23:00.000-05:002011-09-11T10:23:57.657-05:00Where Were You?Every generation has that moment where everyone remembers where they were and what they were doing. My grandfather's moment was the attack on Pearl Harbor; my father's, President Kennedy's assassination; for the current generation, 9/11, or to be more accurate, the planes hitting the World Trade Center towers. The plane crashing in Pennsylvania and into the Pentagon do not light our memories like the Twin Towers. The courageous efforts of those on United Airlines Flight 93 made the ultimate sacrifice by crashing the aircraft in Pennsylvania, saving another target from destruction. They should not be forgotten. The Pentagon is a military target and had less impact on people further from the destruction and not personally affected. They also shall never be forgotten.<br />
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I remember where I was and what I was doing when the news broke. I was watching CNBC as I dressed for work when newsanchor, Mark Hanes, inturupted the discussion to report a plane hit the North Tower of the World Trade Center. Live video of the smoking building filled the screen. I had two thoughts: How the h*%$ 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. <br />
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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. <br />
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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. <br />
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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, <em>Welcome to the Twenty First Century</em>. The science fiction writers never told us it could be like this.<br />
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Use the comments section to share your story.KeithTaxhttp://www.blogger.com/profile/00224167617509338587noreply@blogger.com0tag:blogger.com,1999:blog-636421170177338991.post-44024877068083146282011-08-29T12:24:00.000-05:002011-08-29T12:24:13.908-05:00World's Best InvestmentA 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.<br />
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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.<br />
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You can also pay off debt and build a retirement account. But leads back to stocks, bonds...<br />
<br />
A story for another day.KeithTaxhttp://www.blogger.com/profile/00224167617509338587noreply@blogger.com1tag:blogger.com,1999:blog-636421170177338991.post-20451583989809547432011-08-09T10:47:00.000-05:002011-08-09T10:47:39.283-05:00Stealth Tax IncreasesJust 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.<br />
<br />
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. <br />
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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. <br />
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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.<br />
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Can someone please lead? Real leadership. Please.KeithTaxhttp://www.blogger.com/profile/00224167617509338587noreply@blogger.com0tag:blogger.com,1999:blog-636421170177338991.post-10304360838426478182011-08-03T22:46:00.000-05:002011-08-03T22:46:12.287-05:00Free My Coke Rewards Codes-August 2011I 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.<br />
<br />
<div _extended="true">9VKLJP9RN4NW0B</div><div _extended="true"> </div><div _extended="true"><div _extended="true">TPKM76HXMJTLPH</div><div _extended="true"> </div><div _extended="true"><div _extended="true">7F99F0LVF9R6R5 </div><div _extended="true"> </div><div _extended="true"><div _extended="true">TLNT4K9L4TLBN9 </div><div _extended="true"> </div><div _extended="true"><div _extended="true">6HRJXP4WA9H7 </div><div _extended="true"> </div><div _extended="true">If you have extra codes you want to share, include them in the comments area.</div></div></div></div></div>KeithTaxhttp://www.blogger.com/profile/00224167617509338587noreply@blogger.com3tag:blogger.com,1999:blog-636421170177338991.post-10717215147880057742011-08-01T06:42:00.000-05:002011-08-01T06:42:30.502-05:00Create Your Own JobAs 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."<br />
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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. <br />
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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. <br />
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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. <br />
<br />
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. <br />
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You can beat the odds when starting a business by following a few simple rules:<br />
<ol><li>Use little or no debt.</li>
<li>Hire professionals to help you start and run the business (accountant, attorney).</li>
<li>Start small, if possible, and build from there.</li>
<li>Plan each step of the way. Have a business plan.</li>
</ol>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.KeithTaxhttp://www.blogger.com/profile/00224167617509338587noreply@blogger.com0