I sometimes play a little game with people to prove most tax returns are prepared wrong. Before any tax professionals reading this start writing nasty comments I confess I also make errors on tax returns. I get it. Tax season is more triage than solid tax planning. However, once tax season slows down it is time to put your tax preparer to work saving you money, building your net worth, helping you with early retirement and making your life easier from a financial and investing point of view.
Certain errors on a tax return are understandable. Maybe you did not know the tax law or you forgot to tell your accountant about a certain income or expense. Other errors are unacceptable. These include transposed numbers or forgotten elections. This is sloppy tax work and it drives me insane. Anyone plugging numbers on a tax return must review their own work and reduce the number of issues on the return to zero before sending it to the final reviewer.Read More
Charlie Munger, the right hand man of Warren Buffet at Berkshire Hathaway, is quoted as saying he never met any wise person who did not read a lot. Reading is how we learn about the world around us. We live better when we educate ourselves. Every year I read 20 – 30 books of substance and a handful of entertaining novels I think have a value lesson to teach. Reading is as important as breathing. Many of the greatest books I’ve read were introduced to me the same way you are being introduced to books here, from a blog.
This list is by no means comprehensive. Periodically I will add more posts with a list of books I feel are significant. Most of you have already read several books on this list. No surprise there; people interested in bettering themselves will discover these gems on a regular basis all on their own. There will be a few you have not heard of and now is your opportunity to add to your wealth of knowledge.Read More
There is an interesting stream of questions hitting my mailbox. My recent suggestion to cut back and retire early has led to one interesting question. I recommended cutting back to a part-time seasonal job and enjoying all the free time. I used tax preparation as a business idea perfect to live the relaxed lifestyle. CPA’s and other tax professionals came out of the woodwork with the same question: How do you get clients?
Getting clients has always been the easy part for me; finding qualified people to help me with the abundance of clients is a different story. What I am sharing today is something I charge a minimum of $3,000 for a personalized plan to increase your clientele. For free I’ll share my business growth story and few example businesses to help you create your own growth plan.Read More
The idea of starting a business or owning rental properties builds over a period of time. Slowly you convince yourself you can really pull it off. You talk with family and friends first before speaking with your accountant. Owning a business is a dream you have had from a young age. The work involved is something you enjoy so you are motivated. A business plan is drawn up with the help of an accountant or attorney. With a business plan in hand you visit your banker for funding.
For our example we will use an ice cream shop as our business. Suppliers are lined up, employees hired, equipment purchased and promotion in place. Business is hard, but you deal with problems as they arise. Before you know it years get behind you as your business grows until locals use your business as a landmark (turn left at John’s Ice Cream Shack).Read More
Several years ago my office building was burglarized. Two young men used a tire iron to break a window and enter the building. Tax offices do not have a lot of stuff worth stealing so they settled on two monitors and an old safe with an empty coffee can in it. People pay their bill by credit card or ACH in the majority of cases; a few still pay by check and cash comes in during tax season and is removed each day.
The young men caused thousands of dollars in damage for the massive haul of two monitors worth maybe $20 each. (New monitors are under $100.) So what were they geniuses looking for? Well, it seems they remembered I had a soda machine outside my building a decade ago and they assumed I moved the machine inside the building. Yes, they burglarized my building for some of that lucrative soda machine money.Read More
Several years ago while surfing the web I ran across a guy called Mr. Money Mustache, written by some crazy guy out in Colorado*. His claim to fame was that he retired at age 30, to which the Internet Retirement Police took him to task, claiming he did not ‘really’ retire at age 30. Not me. I sat back in my chair and wondered: What took him so long?
Fast forward to last weekend where my 21 year old daughter, Heather, complained about issues with her supervisor at work. It was the perfect opportunity for me, dear ‘ol dad, the Wealthy Accountant, to share some golden nuggets of truth.Read More
The first week of tax season is in the books as I write this. Most tax seasons bring the same problems with a few notable new ways to mess up a tax return. New employees frequently bring bad habits from previous jobs we work hard to break. A new CPA in my office has reminded…Read More
There is a lot of confusion among small business owners when deciding on their entity classification and the tax savings involved. It is the first discussion I have with most business clients. It takes time to get pertinent information out so I decided it would be a good idea to write down.
There are five business entity choices, but it really is only three since two are default choices: sole proprietorship, partnership, limited liability company (and its close cousin, the limited liability partnership), regular corporation (also called a C corporation) and the S corporation. You default to a sole proprietorship if you are a one-person business or a partnership when two or more owners are involved.Read More