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Recovering Bubblehead- Unfortunately, There is No 12 Step Program

Ally McBeal the unrecovered Bubblehead

By Stacie Kitts, CPA

I like to think of myself as a recovering recovered bubblehead.  You might know the type, she was portrayed by Calista Flockhart in the late 90’s as Ally McBeal.  The character was described as “annoying and demeaning to women (specially professional women) because of her perceived flightiness, lack of  [knowledge], short skirts“, and….. well you get the point.

As ridiculous as it sounds, there was a time – a long time ago in a galaxy far far away – when I thought I had found the right combo.   Often sporting an outfit that only Ally McBeal (an imaginary made up TV person, so like no real person should have tried to pull this off) would wear, I was, sadly, the “sexy” CPA.

Ludicrous, I know!

This style choice did not endear me to my female colleagues. And had you met me in those days, you might not have noticed that I had a brain at all.  This, of course, is not the impression you want to make when your brain is what you are selling.

Flash forward ……. now we are visiting my solo “stay home” tax practice period.  This quarter decade represented my relaxed period, where comfort was my style of choice.  My old warn out sweats and stylish jammie sets worn around the home office probably earned me the label of “comfy” accountant.   Also, NOT the serious accountant image you want to project, particularly when you are trying to convince a person who has amassed a considerable amount of wealth that you are the advisor who is going to help them keep it.

Interestingly, of these two periods, the comfy accountant was/is the hardest to overcome – a few enlightening moments, and some mentored wisdom eradicated the “sexy” CPA fairly quickly.  But taking the comfy out of accounting was like a slow excruciating death.

Even so, it’s done.  These days I work in an office building and I look forward to casual Fridays where I can throw on some jeans with my conservative cardigan.  I might even spice it up with some colorful shoes or fun jewelry.  But for the most part, first impressions are my main concern and my style choices scream I’m confident, educated, serious and professional.

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The Blouse

Your fashion choices actually play a large part in selling you and my own fashion history is testament to this.

Being a recovered fashion bubble head probably explains why I recently had a slight meltdown when my assistant commented on how cute my suit was but added, “Your top makes you look like a big orange pumpkin.”

Let me explain.

That morning I had arrived at work wearing a conservative black suit over a cute orange top with cute orange shoes carrying my cute salmon colored purse.  Just the right  >pop<  of color.  I felt completely prepared for my big pitch to a large potential client.  I was clear on the tax issues and confident in my ability to sell it.  But that was before I realized that my clothing choice looked like a Halloween inspired disaster.

I hurried to the bathroom where I stood in front of the full-length mirror and thought, Oh-My-God, she’s right.  Why did I pick orange and black?  I look ridiculous.

Now my confidence is waning.  I can’t get the pumpkin image out of my head.  How was I going to sell ME and MY skills when I looked like “that” lady.  You know, the one that can’t possibly own a mirror because if she did she wouldn’t be wearing that!!!!!!

My head starts to fill with possible solutions:  go home and change – nope not enough time, swap blouses with a co-worker, nope not an option, run to the mall – yes there might be enough time for that there’s one right across the street.  I gathered all the paraphernalia I needed for the meeting, business cards, portfolio, flyer about the company etc. and head out.

I found parking rather quickly and felt the relief flooding through my system.  I ran toward the door and pull on the handle. Locked!!!  It’s locked.  I look at the hours – “OPEN 10am”

10AM?

10AM, what? …..Shut down by my lack of knowledge about mall hours.

I pulled out my cell phone and click a button so I could see the time.  9:30 – No time to wait until it opens, find an appropriate blouse and still get to the meeting on time.

I’m screwed, I’m screwed, I’m screwed.

Despondent, I slowly slink back to my car and try to convince myself that,  it’s no big deal, you can still sell it, it’s not that bad, forget it.  Ya right,  I was a wreck.  So as I headed toward certain rejection,  I resolved myself  to make my pitch just the same.

But miracle of miracles, not only did I arrive early to the meeting, but by some grace of god, the meeting was across the street from a mall.  A mall that was open!

It wasn’t too late, I might pull it off.  I am elated, rather giddy in fact.  I top the escalator and see just the perfect thing.  How wonderful.  I try it on and it looks great.  Stepping out of the dressing room, I spot a manned sales register.

Hello, I’m in a hurry can you ring this up for me really fast?

I am sorry dear, but we just opened and it will take some time to get the registers up.

HUH, really, what?  There’s noo time?  NooooTime!

At this point, I’m thinking run, run with the cute blouse, go ahead make a dash for it…..it’s your only hope….It was amazing the amount of thoughts that flowed through my mind in those few seconds.  Could I get away with it, I would come back later and pay, maybe she would hold onto my wedding ring for collateral.

And then…..

She must have read the desperation in my expression because she says, “Wait, I think the register over here is up.  Let’s see.”  And glorious day, it was.

Sporting my new blouse with renewed confidence and relieved that I wasn’t a fugitive from justice, I arrived in time, made my pitch and yes, landed the client.

Hurray, disaster averted- thanks to the right first impression and my cute new blouse!

Messing with Their Taxes Creates All Kinds of Bad for a San Juan Couple

Avoid a Crime Scene and hire the right accountant

By Stacie Kitts, CPA

When I read a story about someone who appears to have been messing with the tax system for some thirty years, it makes me wonder…..who in the heck did their taxes, and why did it take so long to get busted.

The Orange County District Attorney is reporting that James and Dorothy Klinger, owners of Jamo’s Gardening and Modern Tree Services Inc. are charged with 28 counts of failing to file a return with intent to evade tax, 28 counts of willful failure to pay taxes, and some felony counts for lying about their business to a worker’s compensation insurance company.

These two are looking at spending the rest of their lives in prison if convicted.

They appear to have used an old school tax crook technique and kept two sets of books.   You know, one that showed the “real” dollars and one that was a work of fiction.

Was it worth it? You decide….

They are accused of underreporting about $3.6 million in income and $3 million in wages.  This translates to about 1.9 million that should have been paid over in taxes (give or take) that they got to keep – for a little while anyway.

I don’t know about you,  but $2 million isn’t enough money to risk a 40 year prison sentence.   Am I Right!?

Ten Tax Tips For Farmers at Tax Time

A dairy farm near Oxford, New York in the Unit...

Image via Wikipedia

Farmers, does your tax preparer know these 10 important tax tips?  No?  Yes?  They should….

If you are in the business of farming, there are a number of tax issues that you should consider before filing your federal tax return. The IRS has compiled a list of 10 things that farmers may want to know before filing their federal tax return.

  1. Crop Insurance Proceeds You must include in income any crop insurance proceeds you receive as the result of crop damage. You generally include them in the year you receive them.
  2. Sales Caused by Weather-Related Condition If you sell more livestock, including poultry, than you normally would in a year because of weather-related conditions, you may be able to choose to postpone reporting the gain from selling the additional animals due to the weather until the next year.
  3. Farm Income Averaging You may be able to average all or some of your current year’s farm income by allocating it to the three prior years. This may lower your current year tax if your current year income from farming is high, and your taxable income from one or more of the three prior years was low. This method does not change your prior year tax, it only uses the prior year information to determine your current year tax.
  4. Deductible Farm Expenses The ordinary and necessary costs of operating a farm for profit are deductible business expenses.  An ordinary expense is an expense that is common and accepted in the farming business. A necessary expense is one that is appropriate for the business.
  5. Employeesand hired help You can deduct reasonable wages paid for labor hired to perform your farming operations. This would include full-time employees as well as part-time workers.
  6. Items Purchased for Resale You may be able to deduct the cost of livestock and other items purchased for resale in the year of sale. This cost includes freight charges for transporting the livestock to the farm.
  7. Net Operating Losses If your deductible expenses from operating your farm are more than your other income for the year, you may have a net operating loss. If you have a net operating loss this year, you can carry it over to other years and deduct it. You may be able to get a refund of part or all of the income tax you paid for past years, or you may be able to reduce your tax in future years.
  8. Repayment of loans You cannot deduct the repayment of a loan if the loan proceeds are used for personal expenses. However, if you use the proceeds of the loan for your farming business, you can deduct the interest that you pay on the loan.
  9. Fuel and Road Use You may be eligible to claim a credit or refund of federal excise taxes on fuel used on a farm for farming purposes.
  10. Farmers Tax Guide More information about farm income and deductions can be found in IRS Publication 225, Farmer’s Tax Guide which is available at IRS.gov or by calling the IRS at 800-TAX-FORM (800-829-3676).

Links:

Stacie’s More Tax Tips Makes a Top Something or Other List

By Stacie Clifford Kitts, CPA

Seems like I am always reading someones top something… tax/accounting/business  list and it always makes me wonder – just how does someone get on this list anyway?????

Like for example take  Accounting Today/Tomorrow/WebCPA.  This group publishes a top 100 most influential people in the accounting industry list.  Every year I read it over and wonder –  how do they decide who is “most influential” anyway?  I mean really, is this a scientific thing?  Are there compliance criteria – like a PPC guide “How to Determine the Most Influential People in Accounting” – we are talking about accountants here – I assume there’s a checklist?

I do hope its more scientific than just a bunch of journalists sitting around a conference table, sipping coffee and munching on donuts while someone writes names on a white board.   Just picture it, a bunch of bored staff writers some twisting slightly in their chairs, some lounging about, others lazily calling out names.  Then someone says, “hey cross off Sally Johnson, she was rude to me at blah blah conference. she doesn’t make it this year.” Yowser,I hope it doesn’t work like that!!!

Recently, I’ve been contacted by a “.com site” or two.  These sites were letting me know that I could be listed on a top something list….so –be sure to mention it at Stacie’s More Tax Tips- wont you?

While I get how this whole quid pro quo thingy works, I have declined 100% of the “link to us, we’ll link to you” offers.  I’ve even turned down click for payment offers because I didn’t think the link topics where appropriate for my my site.

But you know what, I’ve decided that gosh darn my blog is interesting.. And yes siree, I deserve to be on a top anything list.. And, it has absolutely nothing to do with quid pro quo.  Nope, they of course see the genius that is my blog and feel compelled to share. So thanks to bschool.com for naming Stacie’s More Tax Tips in the 50 best Blogs to Get You Through Tax Season.

Oh by the way, the picture is of me and the grandbaby enjoying Christmas day with the family!

2011 Standard Mileage Rates

Voiture automobile, Luchon

Look out, the IRS announced the new mileage rates for 2011.  Read on for more information.

WASHINGTON — The Internal Revenue Service today issued the 2011 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2011, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 51 cents per mile for business miles driven
  • 19 cents per mile driven for medical or moving purposes
  • 14 cents per mile driven in service of charitable organizations

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs as determined by the same study. Independent contractor Runzheimer International conducted the study.

A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for any vehicle used for hire or for more than four vehicles used simultaneously.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Revenue Procedure 2010-51 contains additional details regarding the standard mileage rates.

Jason Blumer CPA, He’s a Funny Guy

Jason Blumer CPA, the managing shareholder of Blumer & Associates is a funny guy.  No really.  It’s true. There is proof.

I also really like his website:

We believe your numbers are simply telling stories about the relationships, processes and knowledge running deeply through your business and life. The production of numbers is not the end goal of our firm.  We are here to bring clarity to the reasons why your numbers are what they are. We are a next-generation firm, and we are doing this all over the dang world!

That’s some nice copy – wish I had written it!  AND according to Accounting Tomorrow – Jason is the second place winner in the Atom’s Got Talent Video. Congratulations Jason!

Finally a Tax Law Change That Will Make Our Lives Easier. Well, unless you are a stock broker or mutual fund company that is. 1099-B Reporting Expanded

Mutual fund

Mutual Fund

Stacie says: Good news for taxpayers who receive Forms 1099-B Broker and Barter Exchange Transactions.  Starting in 2011, these forms will include the cost or other basis information of stock and mutual fund shares sold or exchanged during the year.  I can’t tell you how happy this makes me.  Countless hours are spent each year by preparers and taxpayers alike trying to find the basis information on stock sales.  I have to say that this law change falls within one of my more favored.

WASHINGTON —  The Internal Revenue Service today issued final regulations under a law change that will require reporting of basis and other information by stock brokers and mutual fund companies for most stock purchased in 2011 and all stock purchased in 2012 and later years.  The reporting will be to investors and the IRS. This additional reporting will be optional for stock purchased prior to these dates.

“This important reporting change means investors will now receive the information they need to more easily and accurately report their gains and losses,” said IRS Commissioner Doug Shulman. “We will continue to work closely with stakeholder groups to ensure a smooth implementation of the new requirement, which reduces the recordkeeping and paperwork burden for millions of taxpayers.”

These regulations, posted today in the Federal Register, implement a provision in the Energy Improvement and Extension Act of 2008.  Among other things, the regulations describe who is subject to this reporting requirement, which transactions are reportable and what information needs to be reported. Besides providing numerous examples, they also adopt a number of comments and suggestions received since the proposed regulations were issued last December.

Form 1099-B, Proceeds from Broker and Barter Exchange Transactions, long used to report sales prices, will be expanded in 2011 to include the cost or other basis of stock and mutual fund shares sold or exchanged during the year. Stock brokers and mutual fund companies will use this form to make these expanded year-end reports.   The expanded form will also be used to report whether gain or loss realized on these transactions is long-term (held more than one year) or short-term (held one year or less), a key factor affecting the tax treatment of gain or loss. The expanded form, to be first used for calendar-year 2011 sales, must be filed with the IRS and furnished to investors in early 2012.

The IRS today also announced penalty relief for brokers and custodians for reporting certain transfers of stock in 2011.

The relief is described in Notice 2010-67, which was posted today on IRS.gov.

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