From the Bonnie Kavoussi blogging from the Huffington Post:
The situation is even more dire for those who have graduated since 2009.
Fewer than half of college graduates from those years found their first
job within 12 months of graduating, much less than the 73 percent of
those who graduated from 2006 to 2008. Those who graduated since 2009
are three times more likely to not have found a full-time job than those
from the classes of 2006 through 2008.
Read more by clicking on this link.
Monday, September 10, 2012
Wednesday, September 5, 2012
What can I deduct? A quick and easy guide to small business expenses deductible on your tax return.
Business
expenses are the cost of carrying on a trade or business. These
expenses are usually deductible if the business is operated to make a
profit.
It is important to separate business expenses from the following expenses:
The following are types of expenses that go into figuring the cost of goods sold.
This rule does not apply to personal property you acquire for resale if your average annual gross receipts (or those of your predecessor) for the preceding 3 tax years are not more than $10 million.
Personal versus Business Expenses
Generally, you cannot deduct personal, living, or family expenses. However, if you have an expense for something that is used partly for business and partly for personal purposes, divide the total cost between the business and personal parts. You can deduct the business part.
For example, if you borrow money and use 70% of it for business and the other 30% for a family vacation, you can deduct 70% of the interest as a business expense. The remaining 30% is personal interest and is not deductible.
Business Use of Your Home
If you use part of your home for business, you may be able to deduct expenses for the business use of your home. These expenses may include mortgage interest, insurance, utilities, repairs, and depreciation.
Business Use of Your Car
If you use your car in your business, you can deduct car expenses. If you use your car for both business and personal purposes, you must divide your expenses based on actual mileage.
Other Types of Business Expenses
Here's the most common business expenses that are fully deductible against your business income:
Source: IRS Publication 535 Business Expenses.
What Can I Deduct?
To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.It is important to separate business expenses from the following expenses:
- The expenses used to figure the cost of goods sold,
- Capital Expenses, and
- Personal Expenses.
Cost of Goods Sold
If your business manufactures products or purchases them for resale, you generally must value inventory at the beginning and end of each tax year to determine your cost of goods sold. Some of your expenses may be included in figuring the cost of goods sold. Cost of goods sold is deducted from your gross receipts to figure your gross profit for the year. If you include an expense in the cost of goods sold, you cannot deduct it again as a business expense.The following are types of expenses that go into figuring the cost of goods sold.
- The cost of products or raw materials, including freight
- Storage
- Direct labor costs (including contributions to pensions or annuity plans) for workers who produce the products
- Factory overhead
This rule does not apply to personal property you acquire for resale if your average annual gross receipts (or those of your predecessor) for the preceding 3 tax years are not more than $10 million.
Capital Expenses
You must capitalize, rather than deduct, some costs. These costs are a part of your investment in your business and are called capital expenses. Capital expenses are considered assets in your business. There are, in general, three types of costs you capitalize.- Business start-up cost (See the note below)
- Business assets
- Improvements
Personal versus Business Expenses
Generally, you cannot deduct personal, living, or family expenses. However, if you have an expense for something that is used partly for business and partly for personal purposes, divide the total cost between the business and personal parts. You can deduct the business part.
For example, if you borrow money and use 70% of it for business and the other 30% for a family vacation, you can deduct 70% of the interest as a business expense. The remaining 30% is personal interest and is not deductible.
Business Use of Your Home
If you use part of your home for business, you may be able to deduct expenses for the business use of your home. These expenses may include mortgage interest, insurance, utilities, repairs, and depreciation.
Business Use of Your Car
If you use your car in your business, you can deduct car expenses. If you use your car for both business and personal purposes, you must divide your expenses based on actual mileage.
Other Types of Business Expenses
- Employees' Pay - You can generally deduct the pay you give your employees for the services they perform for your business.
- Retirement Plans - Retirement plans are savings plans that offer you tax advantages to set aside money for your own, and your employees' retirement.
- Rent Expense - Rent is any amount you pay for the use of property you do not own. In general, you can deduct rent as an expense only if the rent is for property you use in your trade or business. If you have or will receive equity in or title to the property, the rent is not deductible.
- Interest - Business interest expense is an amount charged for the use of money you borrowed for business activities.
- Taxes - You can deduct various federal, state, local, and foreign taxes directly attributable to your trade or business as business expenses.
- Insurance - Generally, you can deduct the ordinary and necessary cost of insurance as a business expense, if it is for your trade, business, or profession.
Here's the most common business expenses that are fully deductible against your business income:
- Accounting fees
- Advertising
- Bank charges
- Commissions and sales expenses
- Consultation expenses
- Continuing professional education
- Contract labor
- Credit and collection fees
- Delivery charges
- Dues and subscriptions
- Employee benefit programs
- Equipment rentals
- Factory expenses
- Insurance
- Interest paid
- Internet subscriptions, domain names, and hosting
- Laundry
- Legal fees
- Licenses
- Maintenance and repairs
- Office expenses and supplies
- Pension and profit-sharing plans
- Postage
- Print and copy
- Professional development and training
- Professional fees
- Promotion
- Rent
- Salaries, wages, and other compensation
- Security
- Small tools and equipment
- Software
- Supplies
- Taxes
- Telephone
- Trade discounts
- Travel
- Utilities
Source: IRS Publication 535 Business Expenses.
Sunday, September 2, 2012
09-02-12 Client Newsletter
It seems that every successful business out there had to deal with failure.
I like to say failure equals success. Sitting at Firestone today,
waiting for them to remove the nail that somehow managed to make it in
our front ride tire, I stumbled upon the August 2012 issue of INC Magazine.
The magazine’s cover story is about 14 entrepreneurs who discuss their
successes, their failures, and the lessons they learned along the way.
Two were fired from the companies they formed. Another worked 20 years
for his overnight success. Another silenced her critics with a $120
million payday. All of these company founders had one thing in common,
the emotional roller coaster that is entrepreneurship. All had failures
along the way to success.
Drum Cafe, is a corporate motivation and training organization that seeks to “building teams, uniting companies and motivating staff” through, I am not kidding you but it seems to work in Silicon Valley, interactive rhythmic drumming writes in their blog:
Every mistake is an opportunity to learn. What separates the forever failures from a rising phoenix success story is quite simply our willingness to observe a mistake and learn from it. Complete self honesty is absolutely imperative to this process. We also have to be willing to have a positive mind story. Here too the aspect of honesty is the truth that will set us free. If we are tapping into some sob story from our past that we have painted negatively, we cannot move forward. However, we can take that same story and ask ourselves “what did I learn from that experience?” There is ALWAYS something to learn. For example, if you walk down the street, paying no attention to the pavement below, you might trip over something. You can either decide to never walk in that area again, potentially missing something spectacular, or you can recognize you tripped because you were not paying attention. You learn to pay attention and walk down that same stretch of pavement and because of actually looking down you find a $100 bill!
Now that’s a simplified example, but I think you catch the point. In case you need a little more food for thought on the matter of failure being a stepping stone towards success, here are few noted success after failure stories:
R. H. Macy: We are all familiar with this large department store chain, but Macy didn’t always have it easy. Macy started seven failed business before finally hitting big with his store in New York City.
Harland David Sanders: Also known as Colonel Sanders of Kentucky Fried Chicken. The Colonel had his famous secret chicken recipe rejected 1,009 times before a restaurant accepted it.
Albert Einstein: Most of us think of Einstein as a genius, but did you know he did not speak until he was four and did not read until he was seven, causing his teachers and parents to think he was mentally handicapped, slow and anti-social? Eventually, he was expelled from school and was refused admittance to the Zurich Polytechnic School. He proved everyone wrong and in the end, won a Nobel Prize and changed the face of modern physics.
Stephen King: The first book by this author, the iconic thriller Carrie, received 30 rejections, finally causing King to give up and throw it in the trash. His wife fished it out and encouraged him to resubmit it. King is now one of the best-selling authors of all time.
Oprah Winfrey: Oprah faced a hard road to get to where she is today, enduring a rough and abusive childhood as well as numerous career setbacks including being fired from her job as a television reporter because she was “unfit for TV.”
Thomas Edison: In his early years, teachers told Edison he was “too stupid to learn anything.” He was fired from his first two jobs for not being productive enough. Even as an inventor, Edison made 10,000 unsuccessful attempts at inventing the lightbulb. Of course, all those unsuccessful attempts finally resulted in the design that worked.
I came home and opened my email account only to find this discussion about the Home Depot founders from Dan Kennedy, selling his $97.00 “Turning Adversity to Opportunity” DVD:
For example in 1978, Bernie Marcus and Arthur Blank were fired from their executive jobs at Handy Dan Home Improvement Centers during a corporate takeover. Instead of putting their tails between their legs, hiding out and going into paralysis mode like many would, they made a plan to create their vision--a chain of home improvement centers larger than any of the competition.
They named it Home Depot.
Although their grand opening was less than spectacular, I don't have to tell you that it wasn't long before the company exploded with growth and in only two decades became the
world's largest home-improvement retailer.
What does this all mean? First I believe, and most of conversations with fellow clients concur, the marketplace is not going to get any easier any time soon. Secondly I’ve actually seen conflicting numbers as it relates to exactly how many attempts Thomas Edison had at creating the light bulb. But they were all in the thousands. So, seriously, the next time you feel like quitting after failing, just think about the 9,999 failures he had. He never gave up and learned from each and every mistake. In fact, just before finally reaching success, Thomas Edison was interviewed by a young reporter who boldly asked Mr. Edison if he felt like a failure and if he thought he should just give up by now. Perplexed, Edison replied, “Young man, why would I feel like a failure? And why would I ever give up? I now know definitively over 9,000 ways that an electric light bulb will not work. Success is almost in my grasp.”
We have talked a lot in the last few years about our TaxCoach income tax planning software. Enclosed is a page about one of the most misunderstood tax deductions, the home office. We have generated a sample report for a small business or S Corporation owner who operates their business from their home. Take a look.
Like it? Make sense? Want more? Do you think you pay too much tax? Are you confident you’re taking advantage of every legal break? Do you wish your tax advisor did more than just file your tax return?
I’ve got bad news; I’ve got good news; and I’ve got more bad news.
The bad news is, you’re right. You do pay too much tax. You’re probably not taking advantage of every legal deduction. And most tax professionals do little more than record history, putting the “right” numbers in the “right” boxes on the “right” forms.
The good news is, you don’t have to feel that way. You just need a better plan. Planning is the key to beating the IRS, legally.
The “more” bad news is that time is running out. Some of the most valuable strategies have to be put in place by midnight on December 31. Otherwise, like Cinderella’s carriage turning into a pumpkin, you lose them forever!
Our tax coaching service gives you a plain-English plan for minimizing your tax. I can’t predict how much tax coaching might save you. But clients just like you have used these strategies to save thousands, year after year. You owe it to yourself to make sure you’re not missing any legal deductions.
I will contact you soon to schedule a brief telephone appointment. If you have any questions, you can reach me at 217-241-4597.
We spent the last weekend at a family get together in New Buffalo, Michigan. You cannot overlook the number of billboards, as you leave Illinois, proclaiming the better business climate in Indiana. For example its worker’s compensation rates are among the lowest in the nation. I don’t have to remind you; Illinois has a tax mess. Coupled with political corruption. Massive budget problems. The word is out in the business community. In fact in May 2012 Chief Executive magazine named Illinois the 48th best state to do business in. And may I add on a race to bottom. Pathetic. By the way Indiana was named 5th.
As a reminder we are open weekdays with a much earlier closing time that is based more on work flow than the clock. We are still available to meet with you evenings and weekends. The only thing we ask is that you call us for an appointment.
Talk to you soon.
Donald C. Fuener EA
President
Drum Cafe, is a corporate motivation and training organization that seeks to “building teams, uniting companies and motivating staff” through, I am not kidding you but it seems to work in Silicon Valley, interactive rhythmic drumming writes in their blog:
Every mistake is an opportunity to learn. What separates the forever failures from a rising phoenix success story is quite simply our willingness to observe a mistake and learn from it. Complete self honesty is absolutely imperative to this process. We also have to be willing to have a positive mind story. Here too the aspect of honesty is the truth that will set us free. If we are tapping into some sob story from our past that we have painted negatively, we cannot move forward. However, we can take that same story and ask ourselves “what did I learn from that experience?” There is ALWAYS something to learn. For example, if you walk down the street, paying no attention to the pavement below, you might trip over something. You can either decide to never walk in that area again, potentially missing something spectacular, or you can recognize you tripped because you were not paying attention. You learn to pay attention and walk down that same stretch of pavement and because of actually looking down you find a $100 bill!
Now that’s a simplified example, but I think you catch the point. In case you need a little more food for thought on the matter of failure being a stepping stone towards success, here are few noted success after failure stories:
R. H. Macy: We are all familiar with this large department store chain, but Macy didn’t always have it easy. Macy started seven failed business before finally hitting big with his store in New York City.
Harland David Sanders: Also known as Colonel Sanders of Kentucky Fried Chicken. The Colonel had his famous secret chicken recipe rejected 1,009 times before a restaurant accepted it.
Albert Einstein: Most of us think of Einstein as a genius, but did you know he did not speak until he was four and did not read until he was seven, causing his teachers and parents to think he was mentally handicapped, slow and anti-social? Eventually, he was expelled from school and was refused admittance to the Zurich Polytechnic School. He proved everyone wrong and in the end, won a Nobel Prize and changed the face of modern physics.
Stephen King: The first book by this author, the iconic thriller Carrie, received 30 rejections, finally causing King to give up and throw it in the trash. His wife fished it out and encouraged him to resubmit it. King is now one of the best-selling authors of all time.
Oprah Winfrey: Oprah faced a hard road to get to where she is today, enduring a rough and abusive childhood as well as numerous career setbacks including being fired from her job as a television reporter because she was “unfit for TV.”
Thomas Edison: In his early years, teachers told Edison he was “too stupid to learn anything.” He was fired from his first two jobs for not being productive enough. Even as an inventor, Edison made 10,000 unsuccessful attempts at inventing the lightbulb. Of course, all those unsuccessful attempts finally resulted in the design that worked.
I came home and opened my email account only to find this discussion about the Home Depot founders from Dan Kennedy, selling his $97.00 “Turning Adversity to Opportunity” DVD:
For example in 1978, Bernie Marcus and Arthur Blank were fired from their executive jobs at Handy Dan Home Improvement Centers during a corporate takeover. Instead of putting their tails between their legs, hiding out and going into paralysis mode like many would, they made a plan to create their vision--a chain of home improvement centers larger than any of the competition.
They named it Home Depot.
Although their grand opening was less than spectacular, I don't have to tell you that it wasn't long before the company exploded with growth and in only two decades became the
world's largest home-improvement retailer.
What does this all mean? First I believe, and most of conversations with fellow clients concur, the marketplace is not going to get any easier any time soon. Secondly I’ve actually seen conflicting numbers as it relates to exactly how many attempts Thomas Edison had at creating the light bulb. But they were all in the thousands. So, seriously, the next time you feel like quitting after failing, just think about the 9,999 failures he had. He never gave up and learned from each and every mistake. In fact, just before finally reaching success, Thomas Edison was interviewed by a young reporter who boldly asked Mr. Edison if he felt like a failure and if he thought he should just give up by now. Perplexed, Edison replied, “Young man, why would I feel like a failure? And why would I ever give up? I now know definitively over 9,000 ways that an electric light bulb will not work. Success is almost in my grasp.”
We have talked a lot in the last few years about our TaxCoach income tax planning software. Enclosed is a page about one of the most misunderstood tax deductions, the home office. We have generated a sample report for a small business or S Corporation owner who operates their business from their home. Take a look.
Like it? Make sense? Want more? Do you think you pay too much tax? Are you confident you’re taking advantage of every legal break? Do you wish your tax advisor did more than just file your tax return?
I’ve got bad news; I’ve got good news; and I’ve got more bad news.
The bad news is, you’re right. You do pay too much tax. You’re probably not taking advantage of every legal deduction. And most tax professionals do little more than record history, putting the “right” numbers in the “right” boxes on the “right” forms.
The good news is, you don’t have to feel that way. You just need a better plan. Planning is the key to beating the IRS, legally.
The “more” bad news is that time is running out. Some of the most valuable strategies have to be put in place by midnight on December 31. Otherwise, like Cinderella’s carriage turning into a pumpkin, you lose them forever!
Our tax coaching service gives you a plain-English plan for minimizing your tax. I can’t predict how much tax coaching might save you. But clients just like you have used these strategies to save thousands, year after year. You owe it to yourself to make sure you’re not missing any legal deductions.
I will contact you soon to schedule a brief telephone appointment. If you have any questions, you can reach me at 217-241-4597.
We spent the last weekend at a family get together in New Buffalo, Michigan. You cannot overlook the number of billboards, as you leave Illinois, proclaiming the better business climate in Indiana. For example its worker’s compensation rates are among the lowest in the nation. I don’t have to remind you; Illinois has a tax mess. Coupled with political corruption. Massive budget problems. The word is out in the business community. In fact in May 2012 Chief Executive magazine named Illinois the 48th best state to do business in. And may I add on a race to bottom. Pathetic. By the way Indiana was named 5th.
As a reminder we are open weekdays with a much earlier closing time that is based more on work flow than the clock. We are still available to meet with you evenings and weekends. The only thing we ask is that you call us for an appointment.
Talk to you soon.
Donald C. Fuener EA
President
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