Sean is a CPA who sent me an email asking a list of questions about how I started my business, how I operate successfully, handle problems, and balance work and personal life. It is a common request from members of the accounting industry. They want to know how I pulled this stunt off. In the past I touched on the subject; today I will dig deep using Sean’s email to drive the narrative.
Even though this story is about my experiences in my business, most of what I do works for other business models with slight modifications. The hardest part for a professional earning good money is to jump into the unknown of private practice and the certain decrease in income as a business is started; the money comes later. There is also fear of the unknown. I will share how I managed these issues. This will sound different from what you hear from other people or the media. The only reason I can give for the dichotomy is 1 in 10 businesses survive the first five years. Since I am one of the survivors, my story will differ from the majority, 9 out of 10 crowd.Read More
As early retirement and quasi-retirement are easier than ever in our expanding “sharing economy”, the IRS is clarifying the rules on how much you need to share with your least favorite Uncle. For many people “sharing economy” jobs are their real jobs, for others, a way to fill time during retirement or as an adjunct to early retirement.
The goal here is to drive taxes to zero. The “sharing economy” has several opportunities to earn thousands of dollars per year and legally not report it on your tax return. In cases where you are required to report the income we can use tax strategies to significantly reduce or eliminate income or self-employment taxes.Read More
Tensions were high on September 26, 1983 between the United States and the Soviet Union. By May of 1981 the Soviet Union was convinced the United States was preparing for a first strike nuclear attack due to the rhetoric of President Reagan. Further fanning the fire was the Soviet military downing of a South Korean commercial airliner. Except for the Cuban Missile Crisis, the world was never closer to nuclear annihilation; the only difference is that during the Cuban Missile Crisis people knew how close they were to disaster; in 1983 the world knew tensions were high, but seemed blissfully unconcerned.
Stanislav Petrov agreed to fill in as commander for his friend on September 26, 1983 at Serpukhov-15 of the Russian Aerospace Defense Forces. His job was to watch for a surprise nuclear attack from the United States and her NATO allies. The United States had promised to install 108 Pershing II nuclear missiles along the Soviet border (they did in late November 1983) which could strike Soviet targets within ten minutes of launch and of which the Soviet Union had no defenses against.Read More
Americans who read the news even poorly know large corporations use tax inversions to avoid massive amounts of taxes due the U.S. government legally. What most Americans don’t know is they can use the same strategies on a smaller scale to never pay state income tax again. My guess is fewer than ten accounting firms in the U.S. utilize these strategies to protect their clients from state taxes. Today I will show you how to use the tax inversion without the help of an accountant.
A tax inversion happens when a major corporation buys a smaller company in a low or lower tax country or municipality. The acquiring company then moves its headquarters to the acquired company’s country. We will not get into the minutia of corporate tax law as it is not the focus of this post. We will use techniques of large corporations where they are applicable to small businesses, landlords, and retired taxpayers living or working entirely within the U.S.Read More
There comes a time when your responsible spending and investing habits grow your net worth to a level you will never spend in a lifetime. As the years pass you discover charitable causes you want to help. Giving is something that brings meaning to our lives. By making a difference, our hard work and intelligent planning creates the real reason we choose the life we lived.
The hard part of charitable giving is the number of worthy causes to choose from. Another issue is maximizing the value of the gift. There are three issues connected to charitable giving: choosing the charitable organization, determining the level of gifting, and using the tax code to maximize the value of your gift.Read More
When you live in northeast Wisconsin “One More Year” has significant meaning. From the beginning of his career with the Green Bay Packers, Brett Favre always talked about hanging up his cleats. As his career was clearly waning the annual refrain of “One More Year!” started to grow old. Memes were created of an old and wrinkled Favre in a full football uniform muttering a toothless “One More Year”.
It is easier to retire when you are young. As the years add up, the work we do begins to identify who we are. Stopping said work is akin to suicide. And so it goes for your favorite accountant. I had my chance to hang up my cleats before the turn of the century. One More Year syndrome set in until it is almost a joke when I say I am quitting or retiring.Read More
Leadership is a skill far beyond bossing people around and delegating workload. Leadership skills take years to develop with careful grooming to prepare for the day you step into the leadership role. We think of leaders as politicians or business owners, but we all take leadership roles in our daily life. Parents are leaders of their children for good or bad. Cultivating the most desired traits of a great leader in ourselves allows us to make a difference in the world around us in a positive way. Without these traits you can lead you and your followers off a cliff.
Many years ago I had a CPA employee who wanted a management position so bad it hurt. I was dubious of his leadership ability but he had a decade of experience with me and he was due for a promotion. My fears came true immediately. The CPA emptied his desk on everyone else and bitched at the entire staff for not performing while he sat at his desk watching the stock market all day. His tenure as a manager was over before it began. As a leader I know the characteristics of good leaders. Bossing people around is not one of the desired characteristics.Read More
The IRS has audited tax returns the last several years at a historically low rate. Individuals faced a 0.84% audit rate in 2015; millionaires, 9.55%; Schedule C sole proprietor taxpayers, 4%; partnerships, 0.51%; and S corporations, 0.40%. (Source: The Kiplinger Tax Letter: Vol. 91, No. 4) None of this makes a difference if your number comes up. Over the years I developed methods to reduce risk of audit. My clients are audited at a fraction of the national rates due to the steps applied to all tax returns leaving my office.
IRS audits are expensive even if you did nothing wrong. Hiring an accountant to navigate the audit process is time consuming regardless of guilt. Unlike criminal law, in tax matter you are guilty until you prove yourself innocent. The burden of proof is on you to provide proof of income and deductions should the government come knocking. Below are several tips to reduce your risk of getting an unfriendly letter from Revenue.Read More