Is This a Capital Improvement or a Repair?

September 11, 2010

One of the toughest concept for new contractors (plumbers, electricians, carpenters, landscapers, etc.) to grasp is in what situations should they charge sales tax and in what situations should they collect a Capital Improvement Certificate from the property owner and not collect sales tax.
Keep in mind that any work performed for a tax exempt organization (most [...]

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No Deduction for Attending Stockholders’ Meeting

September 10, 2010

So, you are planning to attend a stockholders’ Annual Meeting this year?
Hoping to deduct the cost of your travel, lodging, meals, etc. while there?
Don’t spend too much time worrying about organizing your receipts. 
The IRS has ruled on these types of deductions countless times and each time they come up with the same result – in [...]

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Hidden Home Office Deduction Tax Trap

September 9, 2010

As many of you who follow my writings already know, I do not endorse the Home Office Deduction for people who own their home (I do support it for some taxpayers who rent their home) – check out Don’t Claim the Home Office Deduction to see why.
Now, many people read my advice and think to themselves, [...]

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Obama: Our Most Effective Commander-in-Chief Ever?

September 8, 2010

If Obama continues his effective use of the military, he may end up going down as one of our best and most effective Commanders-in-Chief ever.
Now, I’ll start this off by saying that I am a Republican and that I wish I was able to say these kind words about some of our recent Republican Presidents.  [...]

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How to Take Advantage of Bush Tax Cuts – Part 4 of 4

September 7, 2010

Avoid locking in an installment sale.
Normally, if you are going to receive the proceeds from the sale of property within two or more calendar years, you have the option to spread out the tax on the gain rather than having to capture it all in the year of the sale.
So, if you sell property in [...]

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How to Take Advantage of Bush Tax Cuts – Part 3 of 4

September 6, 2010

Look for dividends in 2010.
If it makes sense in your overall financial plan, you may want to look at investing in some dividend-paying stocks a few months before they pay their 4th quarter dividends.  This way, you can lock in the dividends at the preferred 2010 Qualified Dividend Tax Rate (0% for those in the [...]

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How to Take Advantage of Bush Tax Cuts – Part 2 of 4

September 5, 2010

Don’t cash in your losing stocks in 2010.
If you want to take full advantage of the lower capital gains tax rates in 2010, make sure you don’t dump too many of your losers in 2010.  Hold off and dump those losers in 2011. 
Check out Part 1 of this 4-part series: How to Take Advantage of [...]

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How to Take Advantage of Bush Tax Cuts – Part 1 of 4

September 4, 2010

Sell your appreciated stock prior to December 31, 2010.
If you have any winning stocks that you’ve held for one year or longer, you may want to consider cashing in those stocks and realizing the capital gains in 2010.  The capital gains rates are scheduled to increase in 2011:

If you are in the 10% tax bracket [...]

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Destress With Matthew McConaughey

August 29, 2010

Okay, so taking life advice from the 21st Century’s version of a hippy is probably not #1 on everyone’s to-do list.  However, if you are going to take advice from someone who got arrested while playing bongos in the nude, the advice you should probably take is how to de-stress.
Matthew McConaughey dishes his seven rules [...]

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When Should I Get Ready for Year-End Planning

August 28, 2010

FREQUENTLY ASKED QUESTION:  When do I start getting ready for year end planning and what does my accountant need from me?
Anyone operating a business should consider having their accountant prepare a mid-year tax plan around August or September of each year.
The purpose of mid-year tax planning is threefold:

Determine what tax savings strategies will be available [...]

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Use Credit Cards Not Debit Cards

August 27, 2010

When shopping (online or in stores), use credit cards, not debit cards.
1) Debit card fraud is much tougher to fight and takes much longer to resolve than credit card fraud.
2) If you have a problem with the product/service that you purchase, credit cards offer a much better dispute resolution process (especially American Express, who almost [...]

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When Do I Have to Give Someone a 1099?

August 26, 2010

FREQUENTLY ASKED QUESTION:  When do I have to give someone a 1099 and what do I need from them in order to do so?
When you are operating a business and you make payments of $600 or more to a person (or to an unincorporated business, such as an LLC, a Partnership, a Sole Proprietor, etc) [...]

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I Have Money Left in My Business Bank Account and December 31st is Approaching – What Should I Do?

August 25, 2010

FREQUENTLY ASKED QUESTION:  I have money left in my business bank account and December 31st is approaching.  I am going to spend all the money so that I can reduce my tax bill.  Is this a good strategy?
The short answer: Yes and no.  This is actually the most common misconception when it comes to small [...]

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If You Own an Inactive Company, Don’t Make This Mistake

August 24, 2010

The biggest mistake made by people who own a Corporation or an LLC that is inactive is that they assume that since they had “no activity” they do not have to file a tax return.
This line of thinking is what leads to piles of notices of non-filing from the IRS and from your state’s department [...]

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What Should I Do When I Receive an IRS Letter/Notice?

August 23, 2010

So…you just sat down to open your mail and you see that dreaded letter from the IRS (or from your state’s department of taxation)…what do you do? Panic? Call the IRS? Call your CPA or attorney in a panic?
No, no, and no.
Here are the top three things that you should not do:
1) Do not ignore [...]

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The Hidden Cost of Refinancing

August 22, 2010

When most people consider refinancing, they think of one of two things: reducing their monthly payment or reducing their interest rate.  However, there is a third and potentially detrimental aspect to refinancing that many people do not consider.
And that is the fact that you are now replacing your existing mortgage with a new 30 year [...]

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Homebuyer Credit Deadline Extended

August 21, 2010

The First Time Homebuyer and Repeat Homebuyer Credits deadlines have been extended to September 30th.
Initially, the credits were extended to all who were in contract on their home by April 30th as long as those deals were closed by June 30th.
However, due to many complaints about the short window to close (for example, try closing [...]

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Proper Use of the Word “Corporation”

August 20, 2010

Over time, the word “corporation” has come to take on a significantly negative connotation.  The word “corporation” is now synonymous with terms like “evil corporations” and ”giant corporations.”
So, I think it’s time to set the record straight so that all of us business owners who operate our businesses as corporations stop feeling the pain.
The term corporation [...]

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