Tag

frugal living

Frugal Living, Lifestyle, Small Business, Taxes and Investing

If I Were an IRS Auditor

17142377126_48d2650b0cThe IRS has a complex formula in determining who to audit so secret even the government doesn’t know what it is. This secret is the subject of much debate and some even claim to know the formula. (They also have the secret formula to Coca Cola.)

In my neighborhood if you have an S corporation and get audited, I apologize. The lady who handles S corporation audits at the IRS around here was once an employee of mine. I take full responsibility for my limited role in training her. I am ashamed of my behavior.

But an IRS audit is not really an issue for most people. IRS audits are at all-time lows and do not look to be expanded much in the future. Most audits are not the dreaded visit to the IRS office or the auditor showing up at your place. Most audits are of the correspondence type, where they send you a letter. Correspondence audits are generally narrow in focus and are the result of a misplaced number or a mismatch on the tax return with information the IRS has.

Since so few people get audited nowadays, there should be no worry among taxpayers of a visit from your friendly government revenue agent. Still, I audit proof every tax return I prepare and train my employees to do the same. This isn’t cheating either. I am talking about preparing a tax return in a manner that doesn’t encourage scrutiny.


Continue reading

Related posts
Expand Your Business and Increase Margins with Outsourcing
November 14, 2016
Overreacting Solves Nothing
November 11, 2016
Credit Card Secrets
November 8, 2016
Early Retirement, Lifestyle

Overreacting Solves Nothing




chicken_little_823927821

Chicken Little and her children.

Chicken Little is in true form this week as the election in the States surprised many. The headlines this morning on CNBC echo and increasing level of alarm: Anti-Trump Portland Protest Turns Into a Riot; Op-Ed: I’m not worried about a US recession, I’m worried about another Great Depression; Trump’s enemies are already paying the price; Donald Trump tweets about unfair protests — then has second thoughts; An ‘ugly period’ for the market is drawing near: Saxo Bank economist.

I haven’t seen such overreacting since, well, I don’t know when. There is certainly a lot not to like about Trump, but overreacting will not make it better. The stock market is rallying on higher interest rates. Financials are doing well while much of the market is down. Overall we saw a nice rally and it might, or might not, be overdone. Over at CNBC again we hear: Cramer warns the rally is ‘getting out of hand’ —better deals found in the trash. Really! Yeah, the market will pull back at some point and there is no reason for stocks to be higher due to a guy winning an election who hasn’t even started his first day on the job.

Interest rates rising rapidly bear watching and could be a problem for housing and the economy as a whole, but as of now the SKY IS NOT FALLING! There are reasons for concern. Unless you are a white man there has been vitriol spewed toward you from the President-elect over the past few years.

Overreacting solves nothing. Rioting certainly doesn’t. Playing into the hand of violence never works. Taking a proactive approach is the only solution. The people most shocked are the ones who worked so hard campaigning for another candidate. I get it. I’ve worked hard for a long period to watch a project utterly fail. But it wasn’t the end. I learned a lot throughout the process. You need to focus your efforts, using what you learned to facilitate change.

People make America great. The guy with the second highest tally of votes won the Electoral College and the election. It isn’t the first time it has happened. And I bet you have experience working with people of less than the highest caliber. We all have. As frustrating as it can be at times, we need to engage our Stoic training. Complaining and whining is not allowed!Continue reading

Related posts
If I Were an IRS Auditor
January 11, 2017
Take a Selective Vacation to Maximize Productivity
January 4, 2017
2016 Review; 2017 Plans for The Wealthy Accountant
January 2, 2017
Credit Cards, Frugal Living, Lifestyle

Credit Card Secrets






We think of credit cards as those things which allow us to manage our financial lives without carrying money around. Bills are easy to automate with credit cards and paying the card at the end of the month is a simple, one-time, setup online and it is paid in full on the due date without any further action on your part. Even if you don’t record your spending, a credit card has a nice list of all your spending in one neat, compact location for future review.

Those crisp pieces of plastic come with a dark side also. Without constraint, you can dig a financial hole difficult to crawl out of. Make no mistake; credit cards are debt, even if you pay them in full monthly. Debit cards serve the same purpose and are not debt because it comes out of your bank account; when the money runs out, the purchases are declined.*

Previous posts discussed bonuses, cash-back credit cards, and interest free/fee free loans. I consider those the easy benefit of credit cards. Debit cards offer limited bonuses and cash back, but credit cards take it to a whole new level.

There are a lot more benefits to credit cards most people either don’t know about or never take advantage of. I seek to end that problem now. These benefits are worth anywhere from a few hundred dollars a year to thousands, depending on your level of spending and the items/services purchased with the card.Continue reading

Related posts
If I Were an IRS Auditor
January 11, 2017
Financial Independence for Normal People
January 9, 2017
Get Paid to Take a Vacation
December 12, 2016
Early Retirement, Small Business, Taxes and Investing

My Daughter Retired at 22 — Here is How She Did It

img_20161018_075051For five years I played treasurer at the Wisconsin Writers Association (WWA). The annual conference is their big event. Every year great minds gathered to share ideas writers could use to write better and promote their work. I always tried to snag a spot for a presentation on promotion for writers.

WWA is a small writers association. Only a small portion of the members are actually published, not including self-published books. I had tons of ideas for those few who did have a book in print and in bookstores. When it comes to promoting a small business — and writing is a small business (which can get really big for some) — I have a massive arsenal.

Three years ago I presented at the WWA annual conference in Wisconsin Rapids. My idea for writers was simple. Stop doing book signings at bookstores and focus on libraries. A gasp rose from the crowd. Sacrilege! I had to explain when you are at a bookstore you have thousands of competitors an arm’s length away. It is common for an author at a bookstore signing to have fewer than five people buy their book; many times they sell none!

Libraries are different. Your competitors are available for checkout, but a signed copy is available only with purchase. Libraries are hungry for authors willing to speak to their patrons. Not only will you sell books, you will also get paid for the speaking engagement in most cases. Libraries are the unsung heroes for people looking to supercharge their writing career.

I went into more detail at the conference than I will here. I will chase to the end. During the 50 minute presentation I outlined how an author can earn six figures annually working ten or fewer hours per week. I was soundly admonished. Authors disagreed vehemently that this would work. I stood my ground. As the presentation came to an end a man in the back of the room raised his hand and said, “I am with the Door County Library system and what Keith has said is 100% true. We can’t get authors to show up even when we pay them. And when authors work with us they sell books and get paid for that too. We also sell the author’s book at wholesale price to patrons so the author sells even more books and gets more royalties.” I rest my case.

My oldest daughter, Heather, was in the audience that day. She is also the only one who took notes and followed through.

Play all Day

Heather is not a normal kid; she is a lot like her dad. She does not want to run a business like I do, but she isn’t excited about working for the man. She struggled with her true dream: art. The kid is talented, for sure, but so are another couple million people, too. Heather wanted to attend art schools around the planet and I refused to pay her way. I told her she doesn’t want to produce the same art everyone else is producing. Be different if you want to survive with art.


Continue reading

Related posts
The Worldview of the Financially Independent
January 13, 2017
If I Were an IRS Auditor
January 11, 2017
Financial Independence for Normal People
January 9, 2017
Early Retirement, Frugal Living, Lifestyle

Library Millionaire




img_20160921_085428

This is your new best friend, the librarian at the reference desk.

How would you like a cool $850 every month in your pocket tax-free? Invested in the Vanguard S&P 500 index fund you should be booking around a million dollars in 30 years, assuming historical averages of 7% returns compounded per year after inflation. Okay, I lied. $850 invested every month for 30 years at 7% comes to $1,049,923.39.

But 30 years is a long time to wait for your million dollars. Well, I didn’t say you couldn’t take a bit out of your paycheck and drop it into your retirement account to supercharge your wealth building (and tax savings). Regardless, a free $850 every month in the First National Bank of Wallet is nothing to sneeze at. And anybody can get the free stuff and the money. In fact, the folks handing out the goodies want you to have the money. Who are these crazy people?

Librarians! Yeah, those people you haven’t visited since your junior year of high school have made some changes to the place while you were gone and you might want to check it out.

You know how some businesses can be rude to paying customers. Well, at the library I have never had that experience. These people are happy to see me and allow me to walk out of the place with stuff you would not believe. Sometimes they actually let me keep it forever! And they still have the regular goods you would expect at a library, like books; you know, those thing made of paper, held together with glue, and have pages. The library likes those back after three or four weeks, however.Continue reading

Related posts
The Worldview of the Financially Independent
January 13, 2017
If I Were an IRS Auditor
January 11, 2017
Dealing with Jealous People
January 6, 2017
Frugal Living, Lifestyle

The Friends You Keep




20131109_095843My relationship with the gym is an on-again/off-again affair. Three times a week I lift weights and during the frigid NE Wisconsin winter I also run on the treadmill a time or two each week. It isn’t cheap. I consider my gym membership, which covers Mrs. Accountant and me, a luxury and a spending splurge which sets me back about $800 per year.

Over the years I belonged to three gyms. The first gym went out of business and for several years I avoided costly gym memberships. Then an injury required either expensive physical therapy or a more formalized and regular workout schedule. It was a painful injury. I ruptured several tendons in my right bicep when I was butchering chickens. (Now you have another nugget of trivia on me.)

At first I thought I blew out the rotator cuff because I could not lift 5 pounds with my right arm. A visit to the doctor put that notion to rest. The bicep was another issue. That sucker hurt. A few sessions with the physical therapist quickly drew me to the conclusion I would need to take matters into my own hands if I were to heal in this lifetime.Continue reading

Related posts
The Worldview of the Financially Independent
January 13, 2017
If I Were an IRS Auditor
January 11, 2017
Financial Independence for Normal People
January 9, 2017
Frugal Living, Lifestyle

Save 98% on Laundry Costs




img_20160911_152731

Supplies you will need to make your own laundry detergent.

What people spend on laundry is insane. Today I will show you how to cut your laundry costs to 2 cents per load, plus the cost of the machine (your own or the laundromat). Mixing your own detergent and a clothes drying rack combine to reduce laundry costs so much there is no incentive to reduce it anymore.

Making your own laundry detergent and fabric softener is fun and take only a few minutes. As an added bonus, you feel like a mad scientist as you mix your concoction. The best part is I will talk a whole lot less today as I let the pictures do all the talking for me and any time you can get me to shut up for a day is a good day! (A picture is worth a thousand words so I am technically talking your ear off.)

You will need a few ingredients sometimes hard to find. I have included links to Amazon so you can get to work fast. Amazon prices are pretty good on this stuff. The two hard-to-find items are usually Washing Soda and Fels-Naptha. The rest of the stuff should be available locally.

Here is the mad scientist recipe for laundry detergent:Continue reading

Related posts
The Worldview of the Financially Independent
January 13, 2017
If I Were an IRS Auditor
January 11, 2017
2016 Review; 2017 Plans for The Wealthy Accountant
January 2, 2017
Frugal Living

Rotating Frugality




img_20160910_202211Back in my college days I had a friend who was more frugal than I was. Bill never went out, socialized, or partied. A good night out was the museum if students were allowed in for free or the college library or cafeteria. Spending was off the list.

Bill became such a good friend I asked him to stand in my wedding. He accepted after considering the cost. After college we went our separate ways as life took over. I already had a small tax practice up and going while Bill went . . . I don’t know where Bill went. The last time I saw Bill was when he was on the local news protesting the Iraq War, the first one. It has been a while.

The newscast interviewed Bill for less than a minute. He looked happy and alive wearing shabby clothes and a million dollar smile. He looked as frugal as ever and willing to fight for a cause if it promised to make the world a better place. Whatever happened to the man who stood in my wedding, I’ll never know. I performed a cursory internet search and could not find him. Oh, and he loved the movie, Fiddler on the Roof. His parents had the movie on VHS. (Remember those things?) He never stopped singing If I Were a Rich Man. It was annoying. He is lucky to be a living man.

Regardless of what happened to Bill, I learned a lesson fromContinue reading

Related posts
If I Were an IRS Auditor
January 11, 2017
Financial Independence for Normal People
January 9, 2017
Sex, Porn and Addiction: The Killers of Financial Independence
December 14, 2016