Wray Rives, CPA

Julie on WFAA

2011-11-25T20:27:00.000-06:00

God is still in the miracle business

2011-08-19T13:32:00.002-05:00

One of the kids I worked with in Zambia, wanted us to meet his mom and pray for her, so on Thursday during Camp Life, we took our entire group and went to visit Blessing's home. Unfortunately when we arrived Blessing's mom had left to go to the market, so we walked around to some of his neighbors and asked if our boys could share the Gospel with them. As two of my boys were sharing the story of Christ, an older lady straight out of Hollywood casting for a witch walked up and sat in the middle of all the action. I had already been warned that witch doctors were very active in this area, so I was not totally surprised, but being an American Christian, witches and witch doctors are not something I deal with every day.

Thankfully the old woman did not make much of a fuss, but I did notice that as we left she was following our group. Just as were were about to leave the area, she yelled something at my Zambian partner. She had asked him would we pray for her friend who was ill. In my mind I am pretty intimidated, because God already has me pretty far outside my comfort zone just coming on this trip. I was about to learn that I really don't need to worry, because he was there in a big way.

We followed the old lady to a small house. Understand house in this part of Zambia means a 7 by 7 space made of 4 walls of concrete blocks covered with a tin roof. Inside we found a young man of about 20 who obviously was suffering from some type of palsy. His hands and feed were curled under and he was unable to control his movements. He seemed to have a constant uncontrollable shake to his muscles. Even my Zambian boys who I thought seemed pretty fearless were somewhat intimidated by the look of this young man, but like troopers they went over and began praying for him. As we were praying, two teenage girls who identified themselves as the young mans sister and cousin came in. The two girls gave us some more background on this boy and in fact they were the ones primarily responsible for caring for him.

He had suffered from his condition his entire life. He had never walked and was essentially unable to do much for himself. The girls had not been able to move him for a week, because they needed the help of some men to get him up. Angel, my Zambian partner was the last one to go over and lay his hands on the young man as we were leaving and when Angel stood up the old woman asked were we not going to give some money to them? Angel told me later that at that moment he felt overwhelmed by the Holy Spirit and he responded "we have no money, but what we do have we freely give". Angel then began to pray the most fervent prayer for this young man and by now I had learned that Zambians know how to pray. They put all their emotion and even their entire body into a prayer.

After a few moments of calling on God, Angel stood up from the young man and said "in the Name of Jesus Christ, I command you to stand" and I am here to tell you that before my own eyes, this young man, who had never walked stood up. Angel then just began repeating over and over again "in the Name of Jesus Christ walk, in the Name of Jesus Christ walk" He continued this with all of us following behind until I looked around and we were standing outside the young man's room. This young man who had never stood up by himself much less walked had just walked 10 feet on his own and was standing on his own outside his home. I asked his caretakers to get his mat and we sat the young man down outside his room. I know our entire group was wide eyed and I could certainly see that the young man's care takers were in shock and crying over what we had just seen.

I think we all stood there for a moment not knowing what to do or say and not sure we could even let it totally sink in what we had just witnessed, because what we witnessed was a true miracle straight out of the New Testament. How many times have I asked God for a "burning bush". I am here to tell you be careful what you ask for, because actually witnessing a miracle like this forces you to decide if you really believe what you claim to believe. I look back now and think how easy it was to have this intellectual belief in an all powerful Lord, but it is pretty intimidating when you actually witness Him working right in front of your eyes.

Zambia

2011-08-11T15:49:00.002-05:00

I spent the past 2 weeks in Zambia Africa. It was part vacation, my wife and I spent 4 days in Livingstone Zambia at Victoria Falls, one of the natural wonders of the world. The second part of our trip was a sort of mission trip to work with disadvantaged kids in Zambia. As wonderful as the falls were and as amazing as all the wildlife was, the kids in Lusaka were what made the trip worthwhile.

We went with an organization called Family Legacy Missions International. My oldest son, Josh, actually works on staff for them and while this was my first trip, my wife was going for her fourth time. I had a pretty good idea what to expect from Zambia, because I have heard all the stories from Julie and Josh about the kids in Zambia.

To say that mission trips are not my thing would be an understatement, but what I had to learn on this trip is it really is not about me or what I think my limited abilities may be. What God expected from me was just to show up and He was more than able to take care of the rest of the details, which he did in a big way. I could probably go on for pages about my experience in Zambia, but in order to not loose you the audience I want to focus on just a couple of important things.

1. I learned that we don't take the devil serious to our own detriment. In America, we have turned satan into a cartoon character and think we have him beat. The truth is he has effectively sidelined what is supposed to be the most powerful Christian nation in the world, just by allowing us to believe we already won and so we become apathetic. I have witnessed the real deal in action and I am here to tell you that you should be very scared. He certainly is no cartoon character.

2. I learned that it really is NOT about me. God has absolutely no need to glorify my abilities, all he needs me to do is show up somewhere. Preferably somewhere so outside my comfort zone that there is no doubt who will be honored when something awesome happens and if you show up something awesome WILL happen.

3. Finally, I learned that no matter how bad we think things are here in the US, we have no idea what really doing without means and no matter how hard we try we have misplaced our priorities. I had the good fortune to meet people who truly have nothing and yet they are happier than some of the most financially successful folks I know. If you think the "American Dream" is where it is at, I challenge you to get outside yourself for a week and find out what really matters.

And read the next 10 pages to learn more about "My boys".

Alick

2011-08-11T15:22:00.002-05:00

Alick lives in 3 rooms with no electricity with his mom, dad, 4 sisters and brother. Alick attends community school where he is in 5th grade. Math is his favorite subject and he wants to be a lawyer when he grows up.

Alick worries about having time to study for school, because he has to help his brother work to earn money for the family. A sponsor would insure Alick has the opportunity to stay in school.

Samuel

2011-08-11T15:22:00.001-05:00

Samuel lives with his mom, dad, 3 brothers and 4 sisters in 2 rooms with no electricity. He is in seventh grade at a community school. Samuel's favorite subjects in school are English and social studies. He would like to be an accountant when he grows up.

Samuel worries about being able to pass his exams and stay in school to complete his education.

John

2011-08-11T15:21:00.001-05:00

John is 15 and in 6th grade at community school. John lives in 2 rooms with his mom, dad, brother and sister. His favorite subjects are science and social development studies. John worries because he sometimes has headaches and they affect his vision.

John missed the bus the second day of camp and around 10 o'clock, I saw John walking across the field to our group. He was helping his mom carry water to their house when the bus came, but he had such a desire to come to camp that he walked 15 kilometers from his house. When I told him that was a long way, he said that he walked it all the time because his church was close by and sometimes that was the only way he could get to church. What do you say about a 15 year old who will walk 9 miles to get to church, except that is a good kid! John currently needs a sponsor to complete his education.

Gift

2011-08-11T15:20:00.000-05:00

Gift is an extremely bright young man who is in 7th grade at community school. Gift lives with his mom's brother and does not know where his mother and father are as he has not seen them in several years. Gift lives with his uncle and his wife and their two younger children. His favorite subjects in school are math and English. Gift want's to be an accountant when he grows up.

Despite not knowing where his parents are, Gift has a wonderfully positive spirit and the smile you see in his picture is a permanent fixture on his face. A sponsor would allow Gift to get an education and insure he keeps that smile and positive attitude.

Levy

2011-08-11T15:18:00.002-05:00

Levy lives with his mom, dad 2 sisters and 3 brothers. Levy is in 4th grade at community school and his favorite subject is math. Levy wants to be an accountant when he grows up.

Levy typically only eats one meal a day, because that is all his parents can afford. Levy needs a sponsor to insure he stays in school.

Victor S

2011-08-11T15:18:00.000-05:00

Victor S. lives with his mom, dad 3 brothers and 6 sisters. Victor is in 6th grade at community school, where his favorite subject is science. Victor would like to be a pilot when he grows up.

Victor worries because he has a recurring dream where evil spirits are trying to get him to drink from a cup. Witchcraft and satanism are very common in Zambia. I would love to find an American to sponsor Victor, so he can have staff at Family Legacy Missions to pray for him and provide him a safe place when evil spirits are attacking him.

Joseph

2011-08-11T15:17:00.000-05:00

Joseph lives with his mom, step dad, 3 brothers and 2 sisters. Joseph attends community school where he is in 7th grade. His favorite subject in school is science.

Joseph is lucky enough to be sponsored by an American. That sponsorship provides a group of discipleship leaders who work for Family Legacy Missions and live in the neighborhood where Joseph lives. It also supports a Community Resource Center which is a safe place for Joseph to go and seek help or even if he just needs a trained Christian counselor to talk to.

Blessing

2011-08-11T15:16:00.001-05:00

Blessing is in 7th grade at community school. His favorite subject is science and he wants to be a doctor when he grows up. Blessing is worried because his family lives in very poor housing and his family, especially his mom, is chronically ill.

Because Blessing lives in one of the worst parts of his neighborhood, we went to visit his house to see how his family was doing. Blessing lives in 2 rooms with no electricity with his mom, dad, 2 brothers and 2 sisters. Witchcraft is very real in Zambia and all Blessing asked us for was to pray for protection for his family, because witchdoctors are very common in the area where he lives. Blessing needs a sponsor.

Victor K

2011-08-11T15:11:00.003-05:00

Victor lives with his mom, dad, one sister and 4 brothers. Victor is an amazingly sweet and sensitive young man. Victor is in the second grade at a government school where his favorite subject is science.

Victor is a very sensitive boy who worries a lot about his family. I would love for Victor to have an American sponsor so he can spend more time at the Family Legacy CRC where he can be free to just be a young boy.

Jonathan

2011-08-11T15:10:00.002-05:00

Jonathan is in 2nd grade in a government school. He lives in 2 rooms with no electricity with his mom, dad 3 sisters and 2 brothers. Jonathan enjoys art and theater at school and wants to be a soldier when he grows up, so he can protect his family. Jonathan is 13.

Jonathan is a very quite young man with a tremendously sweet spirit. Jonathan has been to Camp Life before, but has never had an American that would sponsor him .

Tokyo Tweeters

2011-01-27T09:31:00.000-06:00

My middle son left for Tokyo last week. One of his best friends is living in a small town in south Japan, Oita. He is teaching English and I suppose generally corrupting the minds of young Japanese children. I noticed that around the time he went to Japan, I started getting all these Twitter followers from Asia. I am pretty sure there is no correlation, but I followed the first few back.

After I followed two of them, the next day I got almost 10 more. I am starting to think this must be some kind of spam efforts to build a follower list, so I didn't follow these back and sure enough I went a few days with no more followers from Asia. Then I get one more and just to experiment I followed him back. Sure enough the next morning I had a long list of followers whose posts were all in Kanji.

People try to do weird things in Twitter to boost their popularity and gain followers generally to advertise something. The funny thing is even if these folks are trying to get me to read their information, I have no idea what it says.

株式会社SpinWonder(4life)代表取締役ソーシャルメディアプロデューサー Twitter Ustream Facebook YouTube 外苑前～青山一丁目～麻布十番ミラノカプリカルヴァドスクルージング 1級小型船舶操縦士免許 NHK世界ふれあい街歩きアモーレカンターレマンジャーレ！

I understand SpinWonder and Twitter Facebook and YouTube. I can read the word Ustream, but am not sure why it is on here. The rest is just pretty pictures to me.

Sorry, I didn't get the message.

More on my dad and the state pen

2011-01-21T10:44:00.002-06:00

I have mentioned earlier that my father at the tender age of four was a regular visitor to the Mississippi State Pen. He spent most of one summer there and a group of the inmates built him a small wagon that he could ride around the property. They borrowed a female goat from the state farm heard and rigged up a harness so the goat could pull my dad and his wagon around the property at Parchman.

As the summer drew to an end, the inmates wanted to allow my father to take home his wagon and the goat that had become more of a pet to him. The warden told them that he really did not care about the wagon as it had been built from scrap iron that was worthless; however, the goat was property of the state. The farm actually did raise much of the food that was consumed by the inmates that lived there. Of course my father was quite distraught that he would not be taking his new pet goat home with him, but the inmates who had built the wagon came up with a compromise that was acceptable to the warden. The inmates agreed to skip the meat at their next meal in exchange for the goat.

Of course my father was very excited to have a new pet goat, but his excitement doubled when the next spring his female goat came up pregnant meaning that he would now have two pet goats. In fact the nanny goat gave birth to a new kid, but unfortunately at about three months of age the baby ran away. My father in fact remembered that over the next several years his goat would become pregnant quite often. Unfortunately every new goat invariably ran away from home at about 3-4 months of age. Each time my dad was distressed to loose this new goat, but he always knew that his mom would try to cheer him up by making his favorite meal of ribs for dinner.

IE no longer supported

2011-01-11T10:28:00.001-06:00

If you have been using the internet for any length of time, you know that there once was a time when Internet Explorer was the standard for web page browsers. IE had such a huge market share of the web browser market that every page on the web was built to be compatible with IE and if it worked with other browsers then that was good from them.

Firefox was the first modern day contender that actually started taking any kind of market share from IE. (Don't leave me comments about Netscape or any of the other pre-IE browsers) It's all about the commercial application and when Microsoft released IE as part of the operating system Windows 95+ in 1995 that was the real start of web acceptance by the general public and not just us techno-nerds.

Fast forward to 2011 and there are other (I would argue better) web browsers around. The top of the heap being Firefox and Chrome, but IE just because it comes standard with Windows OS is still a force in the browser wars. I can remember when FireFox added an IE compatible tab to insure their browser worked with everyone's web page. Imagine my surprise today to get the following email:

Internet Explorer (IE) no longer supported

For now, we have discontinued support for ALL versions of the browser, Internet Explorer (IE). IE has always given us fits when it came to compatibility issues. It was time to rethink our position. We have decided that the time it takes to make our code compatible with IE would be better spent adding and improving the core functionality of the Bee. Adding new features that would help you, our customer, grow your business.

If you are using IE today to access the Bee, please don't be alarmed. Downloading a compatible browser is easy and straightforward. Here's a list of three we recommend. Just click on the link to go to the download page. You'll be up and browsing in minutes!

Firefox
Google Chrome
Safari

Happy browsing!

Scott Miller
Founder/CEO
Scott@getthebee.com

The Bee is an online bookkeeping/accounting application and apparently they have been having problems getting their software to work correctly with IE. Sorry this was news to me as I rarely use IE, so I have never had a problem with their site.

Some day we may look back to January 2011 and realize this was a tipping point for Microsoft and Internet Explorer.

My dad and the state pen

2011-01-05T20:29:00.002-06:00

My father was born in 1925, in rural Mississippi, so as you read this story remember that the world was quite different back then. Two of my great uncles were guards at the state penitentiary in Mississippi known as Parchman Farm. The older uncle was chief of the guards and his brother was the guard in charge of death row. When my dad was 4 years old his mom, in what everyone agrees was a moment of unusual weakness, allowed him to spend a couple of days around Christmas time with his uncles at the state pen.

Apparently he was a huge hit with not only the employees of the pen but also many of the inmates. It seems a group of the more notorious inmates had young sons themselves and knew that they would not be allowed to see their children, so having my father around, especially during Christmas, turned out to be genuinely meaningful to them. So much so that they asked his uncles would they please allow "the kid" as they called him to visit again. The uncles' response was they were not sure his mother would allow her four year old to hang out at the state penitentiary and they were in fact surprised she even let him come in the first place. The inmates told my great uncles that his mom should have no concern, that they would personally guarantee his safety.

Somewhat skeptical but still thinking this was a genuine opportunity to reach out to group of pretty hardened criminals, many of whom were serving a life sentence, the two uncles agreed to "see what they could do". Sure enough after much begging and pleading my father was allowed to return to visit the following summer. Within an hour of my dad's arrival, information got back to his uncles that in fact they should have no concern about the safety of their nephew. Every inmate in the entire prison had gotten the word that any man who messed with "the kid" would not live to see the next day and at the age of four my father was given free reign to go where he wanted at Parchman and "the kid" began a regular series of visits to the farm.

Obviously, Parchman Farm has a lot of ugliness in its history, but it looked quite different through the eyes of a four year old in 1929.

Facebook Ads

2010-12-22T11:01:00.001-06:00

American Express ran a promotion through a Facebook page called Small Business Saturday. Given that I am into the whole small business market, I participated. Granted they were looking more for retail type small businesses not public accountants, but what the heck it was free and I really did not expect to get any new clients from it. My expectations were right on target, but I did get a $50 advertising credit for Facebook Ads.

I have been hesitant to do a lot of advertising on Facebook, because I am not sure it is where I am going to get leads on new business. Most of my new business comes in during December-January or March-April. Surprisingly I also get inquiries around September-October from the real procrastinators.

Facebooks ads work much like Google ads, you quote what you are willing to pay for every time someone clicks on your ad. A click should take the potential customer to your website or to a page that promotes your business and/or product. Maybe you have seen the term PPC (pay per click) or CPA (Cost Per Action).

That is how most internet advertising is sold. Shopping for a new CPA is not like shopping for a new toaster. I am usually willing to pay more per click, because I don't typically get a lot of clicks in any one day. I have run Google Ads and some other PPC services before and actually landed a few new clients from the efforts. December is a good month for me to advertise, so I created a Facebook Ad, applied the credit from American Express and set it to start running.

My experience with the other advertising told me that $50 should last me about a month, based on the typical click through rate I get advertising CPA services. Now I have learned a little about marketing, but in no way am I an advertising guru, so imagine my surprise when my new ad generated 15 clicks in the first day. I even went to my web site to verify that there really were 15 inbound hits from the ad. Right there they were! Of course at $1.51 per click, I had used up almost 1/2 of my budget.

The following day I got another 12 clicks and by the time I turned the ad off on day 3 I had spent my $50 credit and another $12 of real money.

I can't say there is definitely something fishy going on, but here are the facts:

1. Using Facebooks ads, I got as many hits to my landing page as any other PPC service provided in a month.
2. None of the hits lasted for any length of time, which is unusual if you are truly shopping for a CPA. If someone is really looking for a CPA, they tend to spend some time researching you before they make contact.
3. Speaking of contact, I got a grand total of zero actual contacts from the Facebooks referrals. On every other service $50 of ads and 30 something clicks results in at least one or two actual contacts.
4. My geographic reach was more limited on Facebook than it has been on any other ad service. My ad was supposed to be presented only to people within 25 miles of my office.

Beyond the conspiracy theory that Facebook has a room full of folks clicking on ads to generate revenue, I realize that it could very well just be the quality or value of clicks I get for my services is much lower on Facebook than it is for other PPC ads. Ten clicks a day is a great response rate from an ad for me, but it is the ultimate conversion action that you are really paying for. So if my response rate is an equivalently lower ratio, then it really does me no good to get all those folks to my site or at least I am over-paying for clicks. Remember I am selling accounting services, so I expect a low click rate but higher conversion rate.

Ads on Facebooks is a fairly new thing, so I would love to hear your experiences, good or bad with the service, even if you are selling toasters.

Twittering

2010-11-08T12:27:00.000-06:00

Ok news from my travels in the Twitter world including one observation, one lesson and one cool new app.

First An Observation-what is up with Twitter DM's? Granted the DM (Direct Message) feature is not a prime reason for using Twitter and it is a poor substitute for email, but I do use it occasionally. There are a few of my connections that I interact with primarily on Twitter and it is not unusual for us to DM each other. I have noticed that after the last redesign the whole DM message screen makes no sense at all. I cannot for the life of me figure out what the logic is in laying out the sequence of how my messages show up. I got a message from one of the Twitter contacts today regarding a mention I made about her in an earlier tweet. Lucky I use Hootsuite and noticed the message on there, because on the Twitter screen I would have to scroll past 5 other DM's that are anywhere from 2-9 months old before I got to her message. There is no logic here and call me a luddite, but I expect software to have some kind of logic when I use it.

Fell free to post a reply if you have some insight into how the Twitter message screen is supposed to work now.

Second A Lesson Learned-Did you know you can get filtered from Twitter search? Did you know that when you do get filtered you don't show up in any hashtag (that's the little # sign) discussions? I found this out because I got filtered. The site says you get filtered if you tweet the same message too often, or too many tweets with links or if Twitter thinks you are spam. All of your posts still show up on your follower's timelines, but you don't show up in any search. Apparently this has been going on for some time, but I have not really seen anyone discussing or warning you about it. Some unofficial blogs I have read on the topic say that in addition to the official versions you can get blocked just for re-tweeting someone that has already been flagged as a spammer.

I was actually at a book launch for a client and they had a screen following tweets about the event. Dutifully I tweeted, and in total narcissistic fashion I went and watched the screen to see my tweets, only I never did show up. A quick research after the event lead me to the whole filtered search issue.

If you want to know if you have been filtered, go to Twitter and in the search function type from:yourtwittername. (that's from: followed by your username without the @ in front of it) If no tweets come up then, you have probably been filtered also.

I can't tell you how to get un-filtered, because I am still working on that one myself. Actually I am working on why I got filtered in the first place, then it's figure how to get off the bad list.

Third A Cool App-paper.li This is a really cool little Twitter feed app. You create a free account on Paper.li and then create a newspaper based on various Twitter feed choices. Paper.li will go pull the Twitter feed you specify and create what looks like an online newspaper with articles based on the feed you selected. I created a list based on several of the better accounting information sources I follow and created The Accountants Daily:

I just think this is a cool thing and I really like the look of the page it creates. Obviously they are planning on living off the advertising revenue, but the ads seem to be relevant to the topics and are not really obtrusive to me.

I am going to play around with this one some more and may come up with a post on how to use it for your own marketing purposes.

Check out my Paper.li page and let me know what you think.

Why do we need that?

2010-10-24T20:29:00.001-05:00

Maybe I am just in a bad mood, because they woke me up from my Sunday afternoon nap, but why do we need a group called "get out the vote"?

Does anyone really not know that there is an election coming up? I know I get bombarded with advertising every day from the various candidates. If they don't need to let me know something is happening, what is left, overcoming apathy on the part of voters. It seems like I should have as much right to NOT vote as I do to vote.

Despite the claims of being non-partisan, I have to wonder if I was not voting for "their candidate" would the person calling really be all that anxious to get me to vote early?

I know this effort has to cost something. Is there not a more pressing need like hungry children somewhere that we can help instead of waking me up on a Sunday afternoon?

What's your name and whose your daddy?

2010-10-20T09:55:00.000-05:00

I am a foster parent. My family and I have been a foster family since 1992. I know the foster parents you hear about on the news are creepy people who keep their foster kids locked up and feed them mustard sandwiches. You will just have to trust me, that is not us. There has been some debate in our family, but I am fairly confident that we have at this point in time had approximately 63 foster kids live with us.

It may seem trivial, but one of the many issues we deal with when a new kid comes to live with us is what do they call us. I actually have met several foster parents who feel strongly that the kids need to call them mom and dad. That always bothered me because even though we serve that physical role for some period of time, we are not mom and dad . The kids that live with us are either going to go back to live with their birth parents or are going to be adopted. That's when they need to refer to someone as mom and dad, so we have always had the foster kids call us by our given names. I am simply Wray to them. (it is pronounced just like Ray and I had nothing to to with the spelling)

Apparently there is a rule of etiquette that says when your first grandchild is born, you have to come up with a contrived, cutesy name for that child to use to refer to you. It seems rather silly and maybe even discriminatory that other kids are still free to call me Wray, but a child related to me by birth has to use a made up name, but I am told anything else is disrespectful.

There actually could be some interesting nuances to my particular situation. What happens if one of my children adopts a child? Is that child then required to use the made up grand parent name? I am not sure if this rule applies only to blood relations or to all kids that are legally related. In fact now that my birth children are adults, there could be a situation where I have a foster child that calls me Wray. That child is adopted by one of my birth children. Theoretically such a child might have to change the name he or she uses to refer to me.

What if my birth child becomes an unfit parent and has the aforementioned adopted child taken away and that same child now comes back to live with me thus becoming one of my foster children again? Does that child now have to change back to referring to me as Wray?

All perplexing questions, but I have delayed as long as I can. Lucy Kate Rives was born on Monday and I still don't have a grandfather name. I need your help. Please leave a comment if you have any suggestions for grandfather names. (No, asshole is not appropriate, besides my wife already uses that term to refer to me in specific situations.)

I realize I have had close to 9 months to work on this, but I procrastinate. It is going to be many months before Lucy actually starts to make intelligible sounds and even longer until she associates those sounds with people and objects, so take your time and give this some real thought. I am off to Walmart to buy more mustard.

You stick your toes in the water before you commit

2010-10-20T08:30:00.000-05:00

Both of the people who might happen to stumble upon my blog may have noticed that it is becoming more personal. I can offer all kinds of excuses so here goes:

1. Becoming a grand parent changes you. You develop what I can only attribute to genetic instinct to pass on information to the following generations, because you know you will not always be here.

2. I once read a quote from an author (no I don't remember who and I wouldn't call out someone who actually has managed to earn a living from writing here anyway) He said that he felt like he had these stories inside him that just had to get out or he would burst.

3. As much as I enjoy business, economics and yes even taxes, those are not my only interests. I do have a life.

4. It's my blog and if you don't like what's on you can change the channel.

Not that I have given up on the business topics, but if you want that there are numerous other places you can find me including:

RivesCPA.co

NeedaCFO.com

Small Business Examiner

Outright.com

Pardon Me

2010-10-19T14:12:00.000-05:00

You will have to pardon me for a short break from talking about money and finance to talk about something that is much more important. Lucy Kate Rives came into the world at 9:45 yesterday evening and her grandparents could not be happier.

Gone Phishing

2010-10-13T15:59:00.000-05:00

I have two clients in the past week that have received an email supposedly from the Electronic Federal Tax Payment System. If you were not sure about how the IRS or EFTPS works, they would be pretty convincing emails. Here is the information from the IRS website on this scam.

There is a fraud risk you need to be aware of. It is related to the Electronic Federal Tax Payment System.

The IRS recently became aware of a fraudulent scheme targeting EFTPS users, the scheme uses an e-mail that claims your tax payment was rejected and directs you to a website for additional information. The website contains malware that will attempt to infect your computer.
If you receive a message claiming to be from the IRS or EFTPS, please:

Do not reply to the sender, access links on the site or submit any information to them.
Forward the message as-is immediately to us at phishing@irs.gov.
How to report and identify phishing, e-mail scams and bogus IRS websites.
If you receive a suspicious e-mail or discover a website posing as the IRS, please forward the e-mail or URL information to the IRS at phishing@irs.gov.
EFTPS is a tax payment system provided free by the U.S. Department of Treasury. Pay federal taxes electronically via the Internet or phone 24/7. Visit EFTPS to enroll.

The World of Twitter Can Get Mean

2010-10-07T09:28:00.002-05:00

I am assuming that both of you who read my blog, know that I am on Twitter. I am up to about 5,600 followers. I mostly do it for marketing of my CPA practice, but honestly it is kind of fun. I consider Twitter like an huge ongoing conversation or maybe with 5,600 conversations going on it is more like a giant cocktail party. I will say for the skeptics that from a marketing standpoint it does work, because I have found new business from Twitter. There are a few regulars that I converse back and forth with and I try as best as I can to keep up with them, but obviously there is no way I really keep up with 5,600 people. If someone follows me, then I follow them back and the whole thing has just kind of grow organically.

Kim Kardashian is reported to be one of the most influential people on Twitter, supposedly she receives $10,000 per tweet to advertise for a site called Ad.ly. One of the ways your Twitter influence is measured is the ratio of people who follow you to people you follow. This has created a large number of Kim "wannabes", who spend a significant amount of time following people and then immediately un-following them. It works too, because for me personally I get an email telling me when someone starts following me, but unless I go to one of the Twit service sites online, I don't usually know when someone stops following me.

It, in fact, really did not hit me until earlier this year how much this was happening to me and so I did start monitoring my un-followers. It is pretty easy to identify them, because they will have several thousand followers, but not many people they follow and most of their posts will either be benign quotes from people who are dead or will provide links to a website that will set you up for life with a residual income stream.

You can use a site like FriendorFollow and find out who you follow that does not follow you back. I started keeping a list on Twitter of un-followers. Like I said Twitter to me is a conversation and my definition of conversation means it's a two way street. If I am the only one listening, then the conversation has stopped and you are just advertising to me. Sure advertising is one of the main reasons I am there, but I listen to your ad in exchange for you listening to mine. And let's be honest here do I really care what 5,600 people have to say? I probably care what about 1% of them have to say and know that maybe 1% of them are really listening to me. I have to hope we stumble upon each other at just the right time. (It is cheaper than mailing out a bunch of postcards, you get the same response rate and it doesn't kill as many trees!)

So I tell you all this to get to the point of today. One of the people I put on the list, noticed and I guess was not too happy about it. I get this tirade of @ reply's about how I am the Twitter hall monitor and should spend more time doing accounting work and she can un-follow anyone she wants.

First off here is my evidence:
1. She followed me and then within a day was no longer following me
2. She has about 800 people following her, but only follows a little over 60

Now before you jump to the same conclusions I did and say well she is obviously guilty and got called out, here is more to the story as I actually took time to look at her status updates and think about the situation.

#1. She actually noticed that I put her on the list of un-followers. I have been doing this for months and she is the first Tweeter to notice or at least admit they noticed.

#2. As I read her timeline, it appears that she is using Twitter for its original purpose, which is sending quick updates to people who actually care and conversing with people you actually know.

#3. I am making some assumptions here (I was already accused of making ASSumptions)but she has a website that sounds like it might be selling something, but the link does not work and it appears that she may have recently used a mass un-follow tool to dump a bunch of the folks she followed. That leads me to conclude that she thought about using Twitter to market her goods, but after going down that road a little bit decided she was more of a Twitter purist and wanted to get back to just conversing with the people she actually cares about.

So in the end I took her off the list. Even if just because she was so upset about being on the list. I mean it's Twitter, I would hate to think I ruined somebody's day over Twitter.

The lessons for today are

1. In a fast paced world we make quick judgments about things and sometimes our judgments are wrong.
2. A bunch of capitalists can take take something as benign as Twitter and pervert its use to try and make a buck off it.

Now excuse me while I go and try to get a bigger list of followers.

New guidance on changes to the adoption credit

2010-09-29T12:47:00.000-05:00

The Internal Revenue Service today issued guidance on the expanded adoption credit included in the Affordable Care Act. The IRS also released a draft version of the form that eligible taxpayers will use to claim the newly-expanded adoption credit on 2010 tax returns filed next year.

The Affordable Care Act raises the maximum adoption credit to $13,170 per child, up from $12,150 in 2009. It also makes the credit refundable, meaning that eligible taxpayers can get it even if they owe no tax for that year. In general, the credit is based on the reasonable and necessary expenses related to a legal adoption, including adoption fees, court costs, attorney’s fees and travel expenses. Income limits and other special rules apply.

In addition to filling out Form 8839, Qualified Adoption Expenses, eligible taxpayers must include with their 2010 tax returns one or more adoption-related documents, detailed in the guidance issued today.

The documentation requirements, designed to ensure that taxpayers properly claim the credit, mean that taxpayers claiming the credit will have to file paper tax returns for 2010.

How important is small business to the US?

2010-09-23T08:14:00.001-05:00

The Small Business Administration Office of Advocacy defines a small business as in independent business having fewer than 500 employees. Here are some interesting statistics from the SBA's website:

Small Businesses:
-Represent 99.7 percent of all employer firms
-Employ half of all private sector employees
-Pay 44 percent of total U.S. private payroll
-Generated 65 percent of net NEW JOBS from 1993 to 2009
(remind me why we bailed out a bunch of large companies to save jobs)
-Create more than half of the non-farm private GDP
-Hire 43 percent of all high tech workers
-On average produce 13 times more patents per employee than large firms

Just thought you would like to know.

Changes coming to Flexible Spending Accounts

2010-09-15T17:34:00.000-05:00

The Affordable Care Act, enacted in March, established a new uniform standard that, effective Jan. 1, 2011, applies to FSAs and health reimbursement arrangements (HRAs). Under the new standard, the cost of an over-the-counter medicine or drug cannot be reimbursed from the account unless a prescription is obtained. The change does not affect insulin, even if purchased without a prescription, or other health care expenses such as medical devices, eye glasses, contact lenses, co-pays and deductibles. The new standard applies only to purchases made on or after Jan. 1, 2011, so claims for medicines or drugs purchased without a prescription in 2010 can still be reimbursed in 2011, if allowed by the employer’s plan.

A similar rule goes into effect on Jan. 1, 2011 for Health Savings Accounts (HSAs), and Archer Medical Savings Accounts (Archer MSAs).

Employers and employees should take these changes into account as they make health benefit decisions for 2011.

You can read Publication 969 on the IRS website for more details.

What a Difference an Education Makes

2010-07-15T16:09:00.000-05:00

A giant tub of peanut butter and a small business loan

2010-07-07T08:43:00.000-05:00

Sam's Club, a division of Wal-Mart Stores, Inc, that has made a name for itself by satisifying our need to consume in bulk is testing a program to offer loans to small business members of the club. The company announced that it is running a pilot program with Superior Financial Group, a federally licensed SBA lender, to offer loans of $5,000 to $25,000 to qualifying Sam's Club members.

You might go in to buy a 20 pack of socks and come away with some working capital to help your small business grow.

You can find out more about Superior Financial Group and Sam's Club on their websites.

The Software Advice Blog

2010-06-30T08:34:00.001-05:00

Accounting software blogger Chris Thorman recently got in touch with me about The Software Advice Blog. They have a nice post about how "horizontal" accounting software is dying. You can read the article, but I will go ahead and let you know horizontal means that one generic software package can be used across multiple industries. You probably guessed that the opposite vertical packages then tend to be more industry specific. The vertical parts just means that the accounting software will integrate "up and down" with packages that may be specific to an industry. Think job costing module for a construction company accounting package.

The concept ties in well with the SaaS or Cloud based software services, I have talked about before on here. For example look at Outright.com which integrates with multiple other web based services, so the business owner gets to pick and choose those tools that he wants and needs.

Guess what, this means choosing an accounting solution for your business is at some level getting more difficult, because you Mr. Business Owner will have to take into account more options. The good part is that extra time spent on the front end will pay off long term because you may be using an accounting solution for years to come, so "choose wisely".

10% Tax on Tanning Service Starts July 1

2010-06-23T16:54:00.000-05:00

The Patient Protection and Affordable Care Act, included a new excise tax of 10% on fees charged for indoor tanning services. If your business provides tanning services, you are very likely subject to the new tax which begins for payments received after June 30, 2010.

The IRS issued regulations to clarify some questions about how the tax will be imposed.

Payment of the tax is due quarterly and should be reported on Form 720. Form 720 is due on April 30, July 31, Oct 31 and Jan 31. Since the tax begins effective with payments received on or after July 1, 2010, the first return will not be due until Oct. 31.

The tax is based on when payment for tanning services are received. If a customer pays upfront for a series of tanning sessions, the tax is due in the quarter when the payment is received, not when the service is performed. If a customer purchases a gift card for tanning services, the tax is calculated when payment is received from the customer. Some gift cards may be exchanged for goods and services other than tanning services, in that case the tax will be calculated when the gift card or certificate is redeemed, assuming it is redeemed for tanning services.

Qualified fitness facilities that include access to tanning services as part of their membership fee are not subject to the tax. If the fitness facility charges an additional fee or membership charge for the tanning services, then it will become subject to the 10% tax.

If tanning services are included in a "bundled" set of services for a set fee, then a reasonable allocation of the fee to tanning services must be made.

The tax is added on to the fee charged for tanning services and should be paid by the person on whom the tanning service is performed. If a tanning salon fails to charge the tax, it will still be liable for payment of the tax.

If you have questions about the new tanning tax you can read IRS Regulation IR-2010-73 or contact our office.

Tax Breaks for Health Professionals

2010-06-16T21:15:00.002-05:00

Congress has passed the Affordable Care Act, which contains a tax break for health care professionals (doctors and nurses) who choose to practice in under-served areas. Prior to 2009, healthcare workers that participate in the National Health Services Corps Loan Repayment Program have been able to exclude from their taxable income the amounts of loans forgiven under the program. Several states have similar loan forgiveness programs, but in many cases the loan forgiveness was included in taxable income of the healthcare worker. Some workers receive a W-2 from their employer to report the loan forgiveness and some receive a form 1099, either way the amount of debt forgiven under many state programs was taxable income for federal income tax purposes.

Under the new law any state loan repayment or loan forgiveness program intended to increase the availability of health care services in under-served areas is now eligible for exemption from federal income tax. The law makes the exemption retroactive to the beginning of 2009.

If an eligible healthcare worker has already filed their 2009 tax return he or she can file an amended return to request a refund of the taxes paid on loan forgiveness income. Additionally if the loan repayment was reported as taxable wages on a W-2, the worker can also have their employer request a refund of the FICA taxes paid on the loan forgiveness. (both employer and employee portions of the FICA tax are refundable)

Come on guys you are better than this

2010-06-10T08:06:00.000-05:00

I am talking to you Google. If you opened up Google today, you may have noticed that your background changed. It is a new feature with the Google page. A couple of weeks ago Google introduced the option for you to have a different background when you open the standard Google.com. I don't know maybe there were not enough people who tried it out and they wanted more folks to see the lovely pictures they offer you as an option.

Personally I know I never did anything with it, quite frankly because I think the whole concept sucks. If you have read my blog much you know that I am a big fan of Google and think they have done a whole lot of things like email, docs and browsers right, but count me as definitely not on board with this one. One of the appeals of the Google page is the absolute lack of clutter. It comes up with exactly what you want (a search bar) with no distractions. If you want distractions use iGoogle or Yahoo. A picture of a sand dune is a distraction to me. The point here is I don't want or need that.

The good news is this supposed to be a 24 hour experiment, to gauge people's response. Here's my response it sucks! I am no spring chicken, but I do still have pretty good eyesight and anything but the default image of a sand dune makes the words blurry. At least they are blurry to my old eyes. What's with the sand dune anyway? What kind of felling am I supposed to get looking at a sand dune? Why do I care, I just want to search for an optometrist and this picture thing is distracting--it sucks!

Fine, you want to play around for a day, that's ok. But I better get up tomorrow and find my old clean Google page, because I'll switch to Bing if I want a picture behind my search engine.

Don't fall for this one

2010-05-26T19:33:00.003-05:00

There is an email going around, that I guess is supposed to scare you into taking up arms against the federal government. I know this kind of stuff floats around on a regular basis, but this one hits close to home because it is on a topic, I actually know a lot about...taxes. It is interesting to see how they used just enough facts, taken out of context, to come up with a pretty convincing email to make people think their income taxes are going to skyrocket in 2012.

Here's the original email:

All:

> Got this from a friend, so I researched it on the Internet, then copied

> and pasted the applicable section of the law. In addition, I checked this

> out with my tax consultant and he says it's valid. So I edited the initial

> E-Mail to eliminate the rhetoric and added my comment at the end about

> preparing for the tax bite come April 15, 2012. This is NOT intended to be

> political in any way. Make your own judgments based on your values, the

> ONLY reasons I'm sending this is to warn you to analyze your financial

> situation and adjust your withholding accordingly

> I contacted my Congressman about House Bill 3590, the Health Care bill and

> asked for a summary of changes. The Aid directed me to go to

> http://www.thomas.gov/, enter "HR 3590" in the search box and look for

> "CRS Summaries."

> Starting in 2011—next year—the W-2 tax form sent by your employer will be

> increased to show the value of whatever health insurance you are provided.

> It doesn't matter if you're retired; your gross income WILL go up by the

> amount of insurance your employer paid for. So you’ll be required to pay

> taxes on a larger sum of money that you actually received; take the tax

> form you just finished and see what $15,000.00 or $20,000.00 additional

> gross income does to your tax debt. That's what you'll pay next year. For

> many it puts you into a much higher bracket. This is how the government is

> going to buy insurance for fifteen (15) percent that don't have insurance

> and it's only part of the tax increases, but it's not really a "tax

> increase" as such, it a redefinition of your taxable income.

> Not believing this I researched the CRS Summary and here's what found:

> Title IX Revenue Provisions—Subtitle A: Revenue Offset

> "(Sec. 9002) Requires employers to include in the W-2 form of each

> employee the aggregate cost of applicable employer-sponsored group health

> coverage that is excludable from the employee's gross income (excluding

> the value of contributions to flexible spending arrangements)."

> Joan Pryde, is the Senior Tax Editor for the Kiplinger Letters. Go to

> Kiplinger's and read about the thirteen (13) tax changes for 2010 that

> could affect you.

> Why am I sending you this? The same reason I hope you forward this to

> every single person in your address book. People have the right to know

> the truth because an election is coming in November. So vote

> intelligently, based on your values. But also adjust your tax withholding,

> or increase your savings, so that you aren't surprised and put in a jam

> when your federal income taxes are due on April 15, 2012.

What the World needs is JESUS!

I love the phrase this is not intended to be political in anyway, but they are flat out lying to you and in my experience people with political intentions are the best liars around!

First off, you really can go to www.thomas.gov and read the Healthcare Reform Bill which is HR 3590. Notice that they tell you to read the CRS Summary. CRS stands for Congressional Research Service. When a new bill is introduced legislative analysts at the Library of Congress write a 250 word or less summary of the major provisions of the bill. Second they direct you to section 9002. They actually fairly accurately paraphrase section 9002. The problem is section 9002 is an amendment section and it only contains the wording that is being added or changed to the original law. So now you have a summary of an amendment section which is only meaningful when read in the context of the original law.

Notice that nowhere do they suggest you go read section 6051 of the Internal Revenue Code and then take into account the changes made by section 9002 of HR 3590. If you did, you would learn that the bill does NOT add the value of employer provided insurance to taxable wages reported on a W-2. It does add another box on the W-2 where employers are required to report the value of employer provided insurance, in much the same way they already report contributions to 401K's or money put into a health savings account, things that have been on your W-2 for years, but not included in taxable income. The numbers all go in those little boxes at the bottom of your W-2 that only your CPA pays attention to.

So now if you get this email you can know that it just ain't true!

As far as the last statement about the world needing Jesus, well He does have some experience with people lying to incite a mob.

Qualified nonpersonal use vehicle

2010-05-20T10:57:00.001-05:00

Qualified nonpersonal use vehicle-a title only the government could come up with. Let's start with a little background. Most business owners know that if they use their personal vehicle for business use they have to keep a record of the business miles they drive in order to take a tax deduction for the business use of the vehicle. This substantiation requirement actually applies to some other types of assets such as computers. Additionally if your employer provides you a with a vehicle to drive, you have to keep records of the business vs. personal use of the vehicle. The business owner or employee requirements don't apply if the vehicle is a "qualified nonpersonal use vehicle". So what it really means is a vehicle that you are unlikely to drive for personal use. No your grandmother's 1984 Buick does not qualify, no matter how "unlikely" you are to want to be seen driving it.

We now have an IRS regulation more clearly defining what is a "Qualified nonpersonal use vehicle", the list includes:

(A) Clearly marked police, fire, and public safety officer vehicles (Seems simple right, but there are actually several paragraphs in the regulation explaining what a clearly marked police, fire or public safety officer vechicle is)

(B) Ambulances used as such or hearses used as such.

(C) Any vehicle designed to carry cargo with a loaded gross vehicle weight over 14,000 pounds.

(D) Bucket trucks (cherry pickers).

(E) Cement mixers.

(F) Combines.

(G) Cranes and derricks.

(H) Delivery trucks with seating only for the driver, or only for the driver plus a folding jump seat.

(I) Dump trucks (including garbage trucks).

(J) Flatbed trucks.

(K) Forklifts.

(L) Passenger buses used as such with a capacity of at least 20 passengers.

(M) Qualified moving vans.

(N) Qualified specialized utility repair trucks.

(O) Refrigerated trucks.

(P) School buses.

(Q) Tractors and other special purpose farm vehicles.

(R) Unmarked vehicles used by law enforcement officers if the use is officially authorized.

(S) Such other vehicles as the Commissioner may designate. (this is the CYA in case we didn't think of something option)

You can read the full text of new treasury regulation if you really want to or just take comfort in knowing that you no longer have to keep track of the mileage when you drive your garbage truck to the grocery store.

I am the 38,450,195th richest person in the world

2010-05-13T08:05:00.000-05:00

Last year, 2009, was a financial challenge for me and I can't say 2010 is looking to be any easier. Like a lot of folks, I had to budget and make some hard choices about where I choose to spend my income. I feel like I work a lot harder and see fewer results financially than I have in past years. Yet I also realize that I have done better than a lot of other folks I know and I really have not had to go without much. One of my friends, Jane Chin, shared a link with me that ranks my income last year compared to the rest of the world. As bad as I may think my finances are, it is humbling to find out that I am in the top 2/3% of the wealthiest people in the world.

Check it out and leave a comment on where you rank.

Global Rich List

Political correctness run amok

2010-05-07T15:20:00.002-05:00

It seems that wearing a shirt with an American flag or red, white and blue is inappropriate these days. At least if you wear such a shirt on Cinco de Mayo (an American made Mexican holiday) Five students at Live Oak High School in Morgan Hill, CA (you knew it was going to be in California didn't you) were asked to remove their patriotic shirts or turn them inside out on Wednesday. Not that the shirts were inappropriate or did not fit within the school dress code. No because the assistant principal felt the students were being "insensitive" to the Mexican-American students by wearing the shirts on May 5.

Look at them, bunch of hoodlums! Of course they were being smart asses, isn't that the primary purpose of most teenage guys? But by all reports they were not being disruptive and in fact no one had complained and none of the other students expressed that they were offended. Apparently it is common practice in Morgan Hill for some students to wear red and green clothing to reflect the Mexican flag on Cinco de Mayo.

I have a real difficult time believing that some kids wearing flag t-shirts even made the top 50 list of problems the school officials needed to deal with that day. Maybe we should start worrying about something that matters.

What a 350 Point drop in DOW means

2010-05-06T16:11:00.000-05:00

Unless you really are not paying attention you probably realize that the Dow Jones Industrial Average dropped 348.63 points today. At one point during the day it had actually dropped almost 1,000 points (998.5 to be exact).

All of this because some Greeks rioted in the streets?

Well kind of. Not that the problems with the economy in Greece is new news, we have been hearing about it for months. The riots were actually a reaction to stipulations that the rest of Europe put on Greece in exchange for "bailing them out". If there is one thing the stock market does not like, it is uncertainty. Good new or bad news does not have anywhere near the impact that news of uncertainty has.

So what is the DOW anyway? It is an index of 30 large US based companies stock prices. If you don't already know there are literally thousands of US based companies whose stock is publicly traded, so 30 is a pretty small portion of the total, but it is a historical indicator of the overall attitude of the US stock market. They take a weighted average price of the stock price for each of the 30 companies and calculate the Dow Jones Industrial Average. General Electric, one of the 30, has been part of the DOW since 1907. The most recent additions Cisco Systems and Traveler's Insurance were added just under a year ago. Yep companies that are included in the DOW do come and go. Eight of the companies have been included in the index for over 30 years. Five were added during the 1980's, 10 were newly added during the 1990's and 7 came on since 2000.

So if the DOW drops does that mean large US companies are in trouble? Not necessarily, most large US companies are dependent on a global economy these days, but a lot of the drop in stock prices today was just people wanting to jump off the band wagon that has been steadily growing for the past year. It is also necessarily a black eye to the US economy as a whole as probably the largest beneficiary of the rush to sell stock was the US Treasury. The value of US Treasury bills (measured in yield) actually skyrocketed today also as people were looking for a "safe" place to park their money while they wait to see what happens with the stock market.

One statistic you can generally count on is that 80% of the time, stock market pundits will be wrong about which direction the market is going in the short term.

I kind of like those odds anybody want to go to "Vegas" with me?

While we are on the subject of annoying

2010-05-06T08:49:00.001-05:00

I am not usually a big conspiracy theorist, but I know Yahoo and Microsoft have been talking a lot more these days. That's what having a common threat (Google) can do to competitors. Maybe Yahoo got this idea from Microsoft (see last week's post on annoying features in products), but I have an issue with their product experience!

Yes I have a Yahoo account, I actually signed up for a new one sometime last year because I was working with a client who only wanted to chat on Yahoo. What can I say? I am an accommodating kind of service provider.

So I do occasionally get an email at this Yahoo email address and I get the little popup at the bottom of the screen which will link me to my Yahoo email page. I finally figured out today that the Yahoo email notifier is the culprit with a problem I keep having. I use Chrome as my default browser, but for some reason I would periodically loose my bookmark toolbar and my home button. It actually happened a couple of times, before I made the connection that the Yahoo email link was causing this (CONSPIRACY). When I click to go to the Yahoo page, for some reason Yahoo decides to drop off my toolbar and remove my home page button. I could probably live with it if this just affected my browser while I am reading Yahoo email, but it totally changes the browser settings and I have to go change them back.

I have one question--"why the hell would anyone think that is a good idea?".

You are treading on thin ice here you bunch of yahoos, because you are NOT that important to me.

Who was Dan Duncan and why should you care?

2010-05-04T16:34:00.000-05:00

Dan Duncan was the 74th richest person in the world. I say was because Mr. Duncan passed away on March 28 of this year. His death is important because Mr. Duncan left behind a $9 billion dollar estate and based on current tax laws his heirs will be paying zero dollars in estate taxes.

You see the estate tax laws expired on December 31, 2009, and are due to reset on Jan 1, 2011, back to the law that was in effect prior to 2002. Congress failed to pass a bill late last year extending the tax for 2010. You might remember they were kind of tied up with something called "Healthcare Reform". Most tax professionals have been expecting that they will pass a bill and will try to make the bill retroactive to the beginning of the year. What no one seems to agree on is can they do that and with a possible $4 billion dollars in taxes on the line, we now have a player who can afford the really high priced lawyers to fight any retroactive impact if our congressmen are able to agree on an extension of the inheritance tax.

So if you plan on dying this year, you may not really care who Dan Duncan was, but your heirs will.

Why your product should not annoy people

2010-04-29T16:35:00.000-05:00

Hey Bill Gates, listen up I got a problem with your products. Ok I know you are semi-retired or something like that, but you are still the face of Microsoft and I am pretty sure that you could place one phone call and make something happen over there. My problem is I have a Hotmail account, actually it is the fact that my wife has a hotmail account that is the real problem, because I stopped using my hotmail account years ago. My account is still active, but the emails just get forwarded to my Gmail account, because well Gmail works better.

Not my wife though, she still goes to the hotmail page and logs on to read her email every day. Occasionally she gets an email with an attachment or some information that she needs me to look at. I know that she could just forward the email to me, but you see that is not how things work at my house. I have to open Internet Explorer, go to the hotmail page and log on to her account.

Here is where the problem starts. When I do log on to hotmail on my computer, Microsoft Messenger pops up and wants me to log on to it also. I am sure someone in marketing at Microsoft wants to insure that I get the "full experience". I only rarely use hotmail and I NEVER use MS Messenger. Sure I tried it out like a decade ago when it first came out. I used it for about an hour, but when the 23rd porn bot tried to chat me up in that time period, I turned it off and have not used it since.

Now I am no Unix toting, Microsoft is the evil empire kind of guy. I actually think you guys have come out with some pretty good products over the years. I also think you deserve to make a buck off what you came up with and I think the French just sued you over Internet Explorer because they were jealous. I mean what have they been successful at lately, besides cooking with butter.

But come on, you do realize not everyone loves you and so why do you want to add an annoying feature to your products? Not only does your website launch MS Messenger, but it puts into my list of startup programs, so it's not enough to just close the program. The next time I start up my computer I have to close it again. I am not a total idiot either, I know how to open msconfig and take it out of my start up list, but my question is why should I have to?

I know there is probably a way to disable this also, so the next time I open hotmail it won't happen. Maybe it is a Internet Explorer thing or a Win7 thing, I don't know. Like I said, it is an annoyance and has never risen to the level of me spending time figuring out how to turn this off and that is the point of my post.

There are three things that can happen with features in any product.

1. The features are great and you love that they are added to the experience and it makes you like the company better.

2. The features are not something you want, but if they are bad enough you may actually take the time to figure out how to disable the feature and in the process you may decide you like the company more because they gave you some options.

3. The features are annoying, but don't rise to the level of the user ever dealing with them, so all they do is remind the user that maybe he really does not like your company very much.

If you have any doubt Bill, your MS Messenger feature in hotmail fits firmly in category 3 for me. You want to borrow my phone?

Ethics Works

2010-04-19T09:47:00.000-05:00

I am a CPA, and by definition of my job I am supposed to be an ethical person. Unfortunately given to failings of many in my profession, I also have to attend a four hour class every other year to remind me that I am a CPA and supposed to be ethical. I am not one to be all nostalgic and remember the good ole days when everyone told the truth. The truth is we as a human race have always had issues with telling the truth, look at Adam and Eve.

My experience actually has taught me that often a lie will get you better short term results than the truth. The problem is I tend to be more of a long term guy and I have also seen the opposite correlation between ethics and long term success. A lie may get you the immediate sale, but eventually the burden of keeping up the charade will cause your efforts to fail and so honestly tends to pay off better in the long term.

Ethics goes even beyond just lies and truths. I have attended numerous ethics classes now thanks to state mandates, but one of the better ones spent time discussing the age old question of what to you do, even when no one else will know. Or as my uncle used to say, some decisions are just between you and God.

I had an experience yesterday that kind of summed this all up for me and I was the one who benefited by someone else's ethical choice. My wife had a bracelet that broke and so my job was to take it to the quick fix jewelry repair shop at the local mall and I also got the "while you are there" job of getting a new battery for her watch. We have used this shop before and I knew the new battery was going to cost twice what it would to fix the bracelet, plus I would probably pass 5 other places that sold cheaper batteries getting there. I have also been married long enough to just do what I am asked and keep my mouth shut about it.

Turns out I was right the bracelet was $14 and the battery was $30. Ahh but the watch battery came with a 5 year warranty so if it died in the next 5 years they would replace it for free. I know typical worthless sales justification for an over priced item, but the good news was they would have everything fixed in an hour. When I went back to pick up my wife's thing, the clerk said "I checked on your watch and it turns out you bought your last battery here and the warranty on it does not expire until December, so the new battery is free".

I am definitely not one of those people who keeps a record of every watch battery I bought 4 1/4 years ago, nor would I have know that there was still a warranty left on it even it I did. I was perfectly happy to pay thirty bucks to fix the problem and keep my wife happy. Not only did the guy at the repair shop miss out on a $30 sale, he was out the cost of a replacement battery. In the short term he lost out on that deal, but taking the long term view of the situation, I will never buy a watch battery from anyone else.

If you are in the vicinity of Lewisville Texas, I highly recommend Fast Fix Jewelry Repair at Vista Ridge Mall, they probably don't even have to take a class on ethics.

More on Tax Day Bill 2010

2010-04-16T08:00:00.002-05:00

Yesterday, we talked about the new Taxpayer Assistance Act of 2010. Today I want to cover some more provision of the bill. Congress wants to "help out" the American Taxpayer.

The new bill will allow the IRS to refer qualifying taxpayers to Low Income Taxpayer Clinics, which are intended to provide education and assistance to the folks who probably most need help comprehending their taxes. It will also more than triple the budget for LITC's. On the topic of low income taxpayers, the bill also would require the IRS to review W-2's and wage and tax statements to identify people who may be eligible for the Earned Income Tax Credit. The EITC is probably one of the most under-utilized credits for a combination of two reasons. 1) EITC is directed at taxpayers with low income who are the least likely segment of the population to use a professional tax preparer and 2) EITC calculation is one of the most complicated tax calculations and forms to complete and therefore most likely to require the assistance of a professional tax preparer. My guess is a lot of people who qualify for the credit look at the form and think I can't figure this out and I can't afford to pay someone to fill it out so forget it. Rather than simplify the credit though Congress wants the IRS to notify more people that they need to look at the EITC form and think, I can't figure this out and I can't afford to pay someone to fill it out so forget it.

The IRS will now be allowed to use"mass communication" including the internet and the IRS website to inform people of undeliverable refunds that the service is holding. Just last year the IRS received over 100,000 refund checks totaling over $123 million back from the Postal Service, because the mailing address was incorrect. That means the average check returned is over $1,000. I think I would notice if I was missing $1,000.

Congress is also requiring the IRS to notify taxpayers when it suspects that they or their dependents identity has been stolen. I guess I am glad they are looking out for me, but personally I want my bank and credit card company to be required to notify me when THEY think my identity is stolen. That is where a thief actually has a chance to steal some of my money. It seems to me that what the IRS is going to notice is if someone other than me is using my social security number on a W-2 or 1099. I have to wonder if this has more to do with people who try to avoid paying taxes by giving out a bogus social security number. It does tie in nicely to their announced efforts to crack down on incorrect information returns.

Speaking of which, they intend to pay for a lot of the costs in this new bill with increased penalties for failing to file or filing incorrect information returns (W-2's and 1099's). Congress estimates they will raise $419 million dollars over 10 years with just this one provision. Given my discussions with business owners and the apparent lack of knowledge in the business community about information return requirements, I think they are guessing low.

Tax bill for tax day

2010-04-15T09:59:00.000-05:00

Finally the US House has agreed on something, a new tax bill for tax day! Yesterday the House voted 399 to 9 to approve the Taxpayer Assistance Act of 2010. In my dictionary assistance is kind of like help and this makes me think of the old joke that you know you are in trouble when you hear "I am from the government and I am here to help." There are about a dozen items in the bill that are intended to HELP the US taxpayer.

One that gets a lot of mention is a provision to make it easier for taxpayers to have payment options for what they owe the government. "Payment option" is another name for LOAN, that's what we get when we let the government buy banks. They find out how banks make all that money and everyone wants a piece of that. Banks loan money and charge you interest and fees. If you have ever entered into a "payment option" with the IRS you probably know that they charge you....interest and fees. Expect more of the same.

One provision that does make a lot of sense is they are taking cell phones out of the "listed asset" category. A listed asset just means a business asset intended for business use, but that easily lends itself to personal use. Cars, computers and cell phones are the most common listed assets. If your business has any listed assets, you have to follow special rules to substantiate that you really are using the asset for business and not personal purposes, including tracking your business vs. personal use of the item. Back when it cost a dollar a minute to make a call on your cell phone this probably made sense. Since every one over the age of 6 now has a cell phone with unlimited calling, text and data, there is no marginal expense to use a business cell phone to make a personal call. In a moment of clarity and sane thinking the IRS and Congress agreed.

I am a CPA, I get paid to prepare tax returns for folks. Starting next year I am REQUIRED to electronically file the returns I prepare for people. Ten years ago when E-Filing first came out, a lot of people feared it. You can be all conspiracy theorist on me if you want, but the truth is it makes sense. The IRS themselves admit they make mistakes on as many as 20% of the returns they process manually. When my computer talks to the IRS computer the error rate is under 1%. I tell all my clients you want to e-file. This new bill does contain an exception to next year's e-filing requirements for professional tax preparers, I can now be exempt from the mandate for religious reasons. I don't really know what that is about, all I can figure is the Amish CPA society has a good lobbyist.

Tomorrow-The Day After Tax Day, I will tell you more provisions of the new law.

Amplify it!

2010-04-01T11:30:00.000-05:00

If you have read my previous posts about social media, you probably realize that I have been using social media to promote my public accounting practice. I know a CPA trying to do marketing, it's a scary prospect! One of the tools I discovered is a site called Amplify (www.amplify.com) It works kind of like Digg or Stumbleupon and its intention is to do exactly what the name says-amplify what you say. I like that it automatically posts my links to twitter, facebook, friendfeed and several others.

They just added an option to create a custom background to your "amplog"--that's like your homepage with all the links you have posted. Since I love to experiment with this stuff, I had to try it out. I had already created a custom background for Twitter, so I thought I would just try the same file on Amplify. From what I can tell it works perfect. Check it out and tell me if you like it. http://rivescpa.amplify.com/.

It looks like my custom Twitter background at http://twitter.com/Rivescpa.

You create the twitter background at Twitbacks, if you want to try it out yourself.

2010-03-31T20:29:00.000-05:00

Are you interested in finding out what is happening with small business owners and how they are saving for retirement? The Small Business Administration has released a paper entitled

Saving For Retirement: A Look at Small Business Owners.

Ten Things the IRS Wants You to Know About Identity Theft

2010-03-24T10:14:00.000-05:00

IRS TAX TIP 2010-58
Criminals use many methods to steal personal information from taxpayers. They can use your information to steal your identity and file a tax return in order to receive a refund. Here are 10 things the IRS wants you to know about identity theft so you can avoid becoming the victim of a scam artist.
Identity thieves get your personal information by many different means, including stealing a wallet or purse or accessing information you provide to an unsecured Internet site. They even look for personal information in your trash. They also pose as someone who needs information through a phone call or e-mail.
The IRS does not initiate contact with a taxpayer by e-mail.
If you receive an e-mail scam, forward it to the IRS atphishing@irs.gov.
If you receive a letter from the IRS leading you to believe your identity has been stolen, respond immediately to the name, address or phone number on the IRS notice.
Your identity may be stolen if a letter from the IRS indicates more than one tax return was filed for you or the letter states you received wages from an employer you don’t know.
If your Social Security number is stolen, it may be used by another individual to get a job. That person’s employer would report income earned to the IRS using your Social Security number, making it appear that you did not report all of your income on your tax return.
If your tax records are not currently affected by identity theft, but you believe you may be at risk due to a lost wallet, questionable credit card activity, or credit report, you need to provide the IRS with proof of your identity. You should submit a copy of your valid government-issued identification – such as a Social Security card, driver's license, or passport – along with a copy of a police report and/or a completed Form 14039, IRS Identity Theft Affidavit.
Show your Social Security card to your employer when you start a job or to your financial institution for tax reporting purposes. Do not routinely carry your card or other documents that display your SSN.
If you have previously been in contact with the IRS and have not achieved a resolution, please contact the IRS Identity Protection Specialized Unit, toll-free at 1-800-908-4490.
For more information about identity theft – including information about how to report identity theft, phishing and related fraudulent activity – visit the IRS Identity Theft Resource Page, which you can find by typing “Identity Theft” in the search box on the IRS.gov home page.

I told you so

2010-03-19T09:26:00.000-05:00

This post is for all my friends who said that we need health care reform and that the president's proposal was not going to cost them anything....

Where is the money coming from?

3.8% Medicare tax on investment income. Investment income includes interest, dividends and rental incomes. Ahh but you say this is only on people who make over $200,000 a year ($250,000 if you file with your spouse). Guess where the money comes from that goes to finance your house, new car and other things you buy regardless of how much you make? Remember Ronald Regan and "trickle down" economics. People who have to pay another 3.8% tax on their investment income are going to demand that they get higher interest rates, which means that the companies who pay interest on borrowed funds will pay higher interest rates and they want to make the same profit as before so they are just going to raise the interest rates they charge their customers..that's you. Read it in the words of the Congressional Joint Committee on Taxation-they expect this one tax alone to generate $30 billion in new tax revenue.

Cap at $2,500 what you can put into a flexible spending account to pay for out of pocket medical expenses. No income limit on that one if affects everyone. Well $2,500 will get you about one trip to the emergency room now a days, but don't plan on saving up pre-tax dollars to pay for any big procedures any more.

Tax "high cost" medical plans. I will confess, I thought this might not be such a bad idea because it would encourage smarter shopping for health care and health insurance and of course this is the one proposal that got watered down and it does not even go into effect until 2018, long after Mr. Obama leaves office.

Penalty (2.5% of income) for people who don't buy coverage and penalize employers who don't provide insurance $2,000 per employee. So much for American freedom to choose.

New fees for drug makers, medical device makers and insurance companies. Why not they are getting a bunch of new business.

Increase from 7.5% to 10% the amount of income you medical expenses have to add up to in a year to get a tax deduction. Another one that applies to everyone, except if you are over 65.

10% tax on indoor tanning services. This is expected to generate $2.7 billion in new tax revenue, so that means our country spends $27 billion in indoor tanning services every year. Personally, I think we deserve this tax.

Finally the bill would limit health insurance companies from taking a tax deduction on anything over $500,000 paid to executives. How did the fat cat insurance companies ever let that one slip through?

See I told you so!

New Tax Benefits for Employers who Hire and Retain Unemployed Workers

2010-03-18T14:12:00.000-05:00

Two new tax benefits are now available to employers hiring workers who were previously unemployed or only working part time. These provisions are part of the Hiring Incentives to Restore Employment (HIRE) Act enacted into law today.
Employers who hire unemployed workers this year (after Feb. 3, 2010 and before Jan. 1, 2011) may qualify for a 6.2-percent payroll tax incentive, in effect exempting them from their share of Social Security taxes on wages paid to these workers after the date of enactment. This reduced tax withholding will have no effect on the employee’s future Social Security benefits, and employers would still need to withhold the employee’s 6.2-percent share of Social Security taxes, as well as income taxes. The employer and employee’s shares of Medicare taxes would also still apply to these wages.
In addition, for each worker retained for at least a year, businesses may claim an additional general business tax credit, up to $1,000 per worker, when they file their 2011 income tax returns.
“These tax breaks offer a much-needed boost to employers willing to expand their payrolls, and businesses and nonprofits should keep these benefits in mind as they plan for the year ahead,” said IRS Commissioner Doug Shulman.
The two tax benefits are especially helpful to employers who are adding positions to their payrolls. New hires filling existing positions also qualify but only if the workers they are replacing left voluntarily or for cause. Family members and other relatives do not qualify.
In addition, the new law requires that the employer get a statement from each eligible new hire certifying that he or she was unemployed during the 60 days before beginning work or, alternatively, worked fewer than a total of 40 hours for someone else during the 60-day period. The IRS is currently developing a form employees can use to make the required statement.
Businesses, agricultural employers, tax-exempt organizations and public colleges and universities all qualify to claim the payroll tax benefit for eligible newly-hired employees. Household employers cannot claim this new tax benefit.
Employers claim the payroll tax benefit on the federal employment tax return they file, usually quarterly, with the IRS. Eligible employers will be able to claim the new tax incentive on their revised employment tax form for the second quarter of 2010. Revised forms and further details on these two new tax provisions will be posted on IRS.gov during the next few weeks.

Oh I thought you were there to represent ME

2010-03-13T15:09:00.002-06:00

I need to start off by saying that while I am not really the grassroots anti government everything in Washington is evil kind of person. Sometimes I do believe something about spending time inside the beltway makes you loose touch with reality a bit, but for the most part I think the US government is about as good as any other form of government available to us in this world.

It was always my understanding that each community elected congressmen and senators to represent that communities' interests, and I accept that there is some compromises to be made. Us folks in Texas like it when federal dollars go to build airplanes in Ft. Worth, but we tend to think it is a waste of money to build aircraft carriers in Long Beach, but personally, I can accept that is part of the give and take.

So I am questioning why my senators from Texas would vote against extending the tax laws that allow you to choose to deduct sales tax when you do your federal tax return. Let me give you a little background here. Prior to 1986, when you were figuring out your itemized deductions in the taxes section you got to put state income tax, property tax and sales tax as deductible state taxes. Someone came up with the bright idea to exclude sales tax from the list and so for several years the list of deductible taxes was limited to just property taxes and state income taxes. The problem is folks that live in states that have no state income tax (like Texas) still had to pay sales tax and back then in most cases we paid a lot higher sales tax than the states that did have a state income tax. I will grant you that a lot of those other states have caught up and in some cases passed up Texas in how much sales tax they collect now, but remember this is all about me, so I don't really care about those other states. I was pissed that I lost out on a tax deduction. (To be fair folks in Alaska, Nevada, Florida, Tennessee, South Dakota, Washington and Wyoming got screwed too, but this is about ME)

I am not the only one who felt that way and finally in 2003 Texas Senator Kay Bailey Hutchinson introduced a bill that gave you the choice of deducting state income tax OR sales tax. Way to go I got back my tax deduction.

The problem is that deduction came up for renewal last week and the same Kay Bailey Hutchinson along with John Cornyn also of Texas voted AGAINST the extension, because it would add to the already out of control federal deficit.

I certainly agree that Congress needs to do something to reign in the deficit, but I kind of have a simple priority list of ways to do that.

#1 Raise taxes and cut spending on things that don't affect me and my community. (I really don't care if they continue to research the breeding habits of salmon in Oregon or not)

#2 Raise taxes and cut spending where the impact is shared among all communities. (I'm even ok when we all share the pain equally, that seems fair)

#3 and lastly raise taxes and cut spending on things that affect just me and my community. (You need to go here last because it just does not seem fair when I can no longer deduct my sales taxes, but those folks in California still get to deduct their state income tax payments, at least my state government can balance their budget)

I could understand if Charles Shumer D-NY voted against the extension, but surely the good senators from Texas can see how logical my plan is and would have my best interest at heart. It must be a mental disorder where you spend so much time in a place that you forget about the people who put you there to begin with. Since I discovered the disease, I am calling it dc-itis. Remember it's all about me.

Ten Facts about Claiming the Child Tax Credit

2010-03-05T09:05:00.000-06:00

The Child Tax Credit is a valuable credit that can significantly reduce your tax liability. Here are 10 important facts from the IRS about this credit and how it may benefit your family.

Amount - With the Child Tax Credit, you may be able to reduce your federal income tax by up to $1,000 for each qualifying child under the age of 17.
Qualification - A qualifying child for this credit is someone who meets the qualifying criteria of six tests: age, relationship, support, dependent, citizenship, and residence.
Age Test - To qualify, a child must have been under age 17 – age 16 or younger – at the end of 2009.
Relationship Test - To claim a child for purposes of the Child Tax Credit, they must either be your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister or a descendant of any of these individuals, which includes your grandchild, niece or nephew. An adopted child is always treated as your own child. An adopted child includes a child lawfully placed with you for legal adoption.
Support Test - In order to claim a child for this credit, the child must not have provided more than half of their own support.
Dependent Test - You must claim the child as a dependent on your federal tax return.
Citizenship Test - To meet the citizenship test, the child must be a U.S. citizen, U.S. national, or U.S. resident alien.
Residence Test - The child must have lived with you for more than half of 2009. There are some exceptions to the residence test, which can be found in IRS Publication 972, Child Tax Credit.
Limitations - The credit is limited if your modified adjusted gross income is above a certain amount. The amount at which this phase-out begins varies depending on your filing status. For married taxpayers filing a joint return, the phase-out begins at $110,000. For married taxpayers filing a separate return, it begins at $55,000. For all other taxpayers, the phase-out begins at $75,000. In addition, the Child Tax Credit is generally limited by the amount of the income tax you owe as well as any alternative minimum tax you owe.
Additional Child tax Credit - If the amount of your Child Tax Credit is greater than the amount of income tax you owe, you may be able to claim the Additional Child Tax Credit.

IRS Tax Tip 2010-45

IRS TAX TIP 2010-44

2010-03-04T08:54:00.002-06:00

Ten Facts about Mortgage Debt Forgiveness

If your mortgage debt is partly or entirely forgiven during tax years 2007 through 2012, you may be able to claim special tax relief and exclude the debt forgiven from your income. Here are 10 facts the IRS wants you to know about Mortgage Debt Forgiveness.

Normally, debt forgiveness results in taxable income. However, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude up to $2 million of debt forgiven on your principal residence.
The limit is $1 million for a married person filing a separate return.
You may exclude debt reduced through mortgage restructuring, as well as mortgage debt forgiven in a foreclosure.
To qualify, the debt must have been used to buy, build or substantially improve your principal residence and be secured by that residence.
Refinanced debt proceeds used for the purpose of substantially improving your principal residence also qualify for the exclusion.
Proceeds of refinanced debt used for other purposes – for example, to pay off credit card debt – do not qualify for the exclusion.
If you qualify, claim the special exclusion by filling out Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, and attach it to your federal income tax return for the tax year in which the qualified debt was forgiven.
Debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the tax relief provision. In some cases, however, other tax relief provisions – such as insolvency – may be applicable. IRS Form 982 provides more details about these provisions.
If your debt is reduced or eliminated you normally will receive a year-end statement, Form 1099-C, Cancellation of Debt, from your lender. By law, this form must show the amount of debt forgiven and the fair market value of any property foreclosed.
Examine the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. You should pay particular attention to the amount of debt forgiven in Box 2 as well as the value listed for your home in Box 7.

Early Distribution from Your Retirement Account

2010-02-18T07:53:00.002-06:00

As the economy has continued to resist real growth and unemployment has remained high, some people have resorted to tapping their retirement savings to pay bills. There are some important things to consider before you take an early distribution from your retirement plan.

Early distributions are usually subject to a 10 percent tax on top of any regular income tax on the amounts
Any distribution that is not a rollover to another qualified plan is generally considered early or premature if you are not yet 59 1/2 years of age. (183 days after your 59th birthday)
Rollovers to an IRA or qualified retirement plan are not subject to the additional 10 percent tax, but you must complete the rollover within 60 days after the day you received the distribution.
Rollovers where you receive the funds, will usually have tax withheld, but you must put the gross balance that was in the prior account into your new account, including any withheld amounts. Direct rollovers (from the old account trustee directly to the new one) are usually not subject to withholding.
There are exceptions to the 10 percent early distribution tax, such as distributions for the purchase of a first home, certain medical or educational expenses, or if you are disabled.
If you made nondeductible contributions to an IRA in prior years and now take early distributions, the portion of the distribution attributable to those nondeductible contributions is not taxed. The same rule applies to distributions from a Roth IRA.

Why we offer payroll services

2010-02-10T10:25:00.000-06:00

Our firm started offering online payroll services to small businesses in January of this year. In my experience working with small business owners, payroll has always been one of the biggest headaches. There have been very good payroll services offered online for several years, but they tend to be price prohibitive for most of the small businesses I deal with. The services I have seen seem to make sense when you get up to 10 or more employees. That is just not the typical client I deal with every day. I would say most of my clients have one to two employees. I knew with the technology available today from all the cloud computing applications, it was just a matter of time before someone dependable offered a payroll solutions. Enter the folks at Intuit, the makers of Quickbooks. When I found out they were offering an online payroll solution, I checked it out and found that it works well for my clients. Because I can sign up to manage multiple client payrolls, I get to offer the service at a much cheaper cost than the standard retail price-another win.

The way this works is you contact me to set you up with a payroll account on Intuit's site. If you want I can even set up your employees for you on the site or you can go and log on yourself to enter the information. Everything is done over the internet. Each pay period, you go to the site with your log on and enter the information to process your payroll. It has a very simple easy to understand interface. You can also offer options that are comparable to other automated payrolls like direct deposit, multi-state payroll and online access to pay-stubs. Plus your payroll tax obligations are automatically calculated for you to file your 941's, 940's and year end W2's and any state payroll reporting is also automated. You have the option to file your return yourself or if you want our firm can process your tax returns directly from our site.

Of course it's from the makers of Quickbooks, so the information also imports directly into all versions of Quickbooks. It also integrates with Peachtree, Quicken, Pro Systems, Microsoft Money and Versa Check software. If you are an Outright client, our firm will post the payroll information directly into Outright for you, so you can track your payroll expenses inside Outright.

I really believe this service is going to be a big hit for small businesses and the cost is very affordable. If you get the service through our firm the price is just $25 per month for the first 5 employees. Most of the other payroll services cost anywhere from $35 to $50 per month, because they are targeted towards companies with larger payrolls. If you have more than 5 active employees it cost only $1 per month per employee over 5. Even if you buy the payroll software, it can cost over $300 and you have to constantly keep it updated. This service will eliminate all those hassles. There is no commitment and no contract, if you don't like the payroll solution just let us know and we will close your account and stop the monthly billing immediately.

I can tell you to this is going to be a hit with my firm also, because we just finished up January and having to chase down clients and get the information to file their W-2's and year end payroll tax returns can be very trying.

If you want to test drive the software to see how it works click here.

If you want to sign up today send us an email.

What's in the 2011 budget for our friends at the Treasury Dept?

2010-02-02T08:30:00.002-06:00

Everyone is talking about budget cuts proposed in the 2011 budget, but what about our friends over at the Treasury Department. (They are the folks that deal with the money, remember) Here is what they have highlighted about the 2011 budget and the increased spending for their department.

From Department of Treasury Release TG523 February 1, 2010

Expanding Treasury's Capacity to Respond to Financial Challenges
In the aftermath of one of the worst crises since the Great Depression, the Treasury Department continues to play a leading role in stabilizing the economy and reforming our outdated and ineffective financial regulatory system. The events of the past year have demonstrated that the Department needs to expand its institutional capacity to more effectively respond to current and future financial challenges. To accomplish this goal, the Treasury Department's FY 2011 Budget continues efforts begun in FY 2010 to make focused, targeted investments in the Offices of Domestic Finance, Tax Policy, and Economic Policy.
The Budget will provide an additional $21.1 million to allow the Treasury Department to expand its expertise in an array of complex financial and economic fields.

Improving Service for Taxpayers
Quality taxpayer service is an important complement to enforcement efforts. Important programs in the Recovery Act aimed at helping taxpayers and stimulating the economy have increased the volume of calls to 1-800 service lines at the IRS, leading to longer wait times and unanswered calls. The FY 2011 Budget provides much needed resources to increase the number of taxpayer calls that get answered and reduce wait times. The Budget also includes increased funding for infrastructure improvements to IRS.gov, which will improve self-service, reduce costs, increase compliance and continue to position IRS.gov as the preferred choice for taxpayer service.
The FY 2011 Budget will provide an additional $45.9 million for these important customer service improvements.

Cracking Down on Tax Evasion
The FY2011 Budget includes a number of proposals that are expected to increase tax collections by $26 billion over the next ten years. Additionally, the Budget provides nearly $250 million in new enforcement initiatives to improve compliance. FY 2011 initiatives will build on the foundation established in the FY 2010 Budget to hire nearly 2,000 new employees dedicated to addressing international tax evasion by businesses and affluent individuals, improving information reporting, and broadening collection activities.
In total, new enforcement initiatives will generate nearly $2 billion in additional annual enforcement revenue once the new hires reach full potential in FY 2013, yielding a return on investment of over nine to one.

Investing in the Needs of Communities
The FY 2011 Budget includes $250 million for the Community Development Financial Institutions Fund, providing a 30 percent increase in funding for the CDFI Fund's core grant program – the CDFI Program – and continued robust support for Native Initiatives. It also provides $5 billion in New Markets Tax Credit allocation authority.

Addressing Global Economic Challenges
As noted by the President in his State of the Union address, exports play a critical role in generating jobs for Americans. The FY 2011 Budget reflects Treasury's commitment to support the Administration's efforts to double exports over the next five years by working through the G-20 and other international fora to foster additional export and other economic opportunities for the United States. This effort will also include working with key countries, including China, to lay the foundation for stronger, more balanced and sustainable global growth.

What tax changes were really in the State of the Union?

2010-02-01T15:35:00.002-06:00

In his State of the Union speech, President Obama addressed several changes he is proposing to reduce the tax burden on US taxpayers. Here are four of the items mentioned in the speech and an opinion of what the proposal will really mean.

Elimination of capital gains tax-This one got a lot of people excited, because they understand selling investments and having to pay tax on the gain. There are currently provisions to allow for up 75% exemption of capital gains on certain investments in small businesses. I don’t believe you will see complete elimination of capital gains, but you can probably expect the existing provision for investment in small business stock to jump to a 100% exemption.

Credit for new hires-Most people understand that to mean some type of exemption from employment taxes for new hires in the form of a credit up to $5,000. Don’t be surprised if there is a time limit that would apply during some initial period following employment like 3-6 months following the date a new employee is hired. It is also expected to include an employment tax exemption for wage increases on people earning under the FICA wage limit of $106,800. There is currently no provision like this in the tax laws. Everyone has heard the news coverage about potential bankruptcy of Social Security, which means passage of this type of exemption could be difficult. In favor of this provision is the fact that incentives for new jobs is a hot topic in Washington and the National Small Business Association has been pushing for something like this for years.

Tax credit for college education.-There are already provisions for tax credits for college cost available, but due to expire this year. I think you can expect to see Congress vote to extend the existing credits, at least for a while.

Child tax credit-There is already a provision to allow a tax credit for child care expenses for dependents under the age of 13. The percentage allowed as a credit decreases from 35% to 20% of qualifying expense, as adjusted gross income increases from $1 to $43,000. The new provisions will most likely involve expanding the current eligibility to higher income families by increasing the percentages for higher wages. The 35% credit would most likely be available to families earning up to $85,000 with the percentage reducing between $85,000 and $115,000 in adjusted gross income.

New Guidance from the Treasury Dept. on Home Loan Modifications

2010-01-29T08:46:00.000-06:00

As part of the Administration's ongoing housing market stabilization plan, the U.S. Department of the Treasury and the Department of Housing and Urban Development (HUD) today released updated guidance for servicers participating in the Administration's mortgage modification program. This guidance refines the documentation requirements in order to expedite conversions of current trial modifications to permanent ones.

There are over 850,000 borrowers currently participating the the home loan modification program.

On December 23, 2009, the Administration required most trial modifications to be placed in a temporary review period to ensure that all borrowers are being fairly evaluated for the program.  During this temporary review period, servicers were not permitted to cancel an active HAMP trial modification for any reason other than failure to meet the HAMP property eligibility requirements. This allowed servicers to convert a significant number of trial modifications to permanent ones. In fact, the total number of conversions more than doubled in December. Guidance released today will help improve this conversion process for the future.

The updated process requires that key documents, including proof of income, be obtained from the borrower before a borrower evaluation can begin. This more robust requirement of upfront documentation will make it easier and quicker to convert trial modifications to permanent modifications and enable servicers to use their resources more effectively. Today's guidance refines the documentation process and makes it easier for eligible borrowers in trial modifications to get permanent modifications quickly.  Under this guidance a simple, standard package of documents will be required prior to the servicer's evaluation of the borrower for a trial modification. This process will be required for all new HAMP modifications that became effective after June 1, although mortgage servicers may implement it sooner.

In December, Treasury implemented a review period through January 31 to provide servicers additional time to collect and submit missing documentation for borrowers in trial modifications, to require that borrowers be notified of any missing documents, and to give borrowers an opportunity to dispute and correct any erroneous information in their applications.  Today's guidance clarifies for servicers the proper procedures for conversion of those borrowers who are current on their monthly payments to permanent modifications.

The Home Affordable Modification Program aims to help responsible American homeowners maintain a sustainable monthly mortgage payment through a pay-for-success framework that aligns incentives of borrowers, lenders and servicers.  Over 900,000 Americans have begun trial modifications since the program's inception and over 110,000 have been approved for permanent modifications as of December 31, 2009.   The median monthly savings for individual homeowners is more than $500 per month.  Over 100 servicers have signed up to participate in HAMP.  You should contact your mortgage holder if you think you may be eligible to participate in the mortgage modification program.

Death due to market share

2010-01-23T13:00:00.000-06:00

I worked with company not too many years ago that woke up one day realized they had a problem. Too much market share. Over a 15 year period they had experienced phenomenal growth. The company had started out as a decent size fish in a pretty big pond, they had about a 30% market share and were generally recognized as having a product as good as or better than most of the competition. After some success with their research and development and probably some sharp marketing they launched a series of products that were generally recognized as market leading.

This period jump started several years of very healthy growth as they grew from 30% to over 80% market share. Leaving the competition in their wake, their sales and profits continued to grow at impressive rates. Even in a corporation success tends to breed ego and no one noticed that the technologies in their markets were changing. Maybe they just just chose to ignore the change, but the technology was changing in such a way that you if you looked another 10-15 years down the road their products would eventually be obsolete and they were left with a huge share of shrinking market.

I give you that background because if you had asked me last week did I think Intuit, the makers of Quickbooks, was headed down that same path, I probably would have said 'yep', followed by Microsoft which was right behind them and might even get there first.

I know what you are thinking and I am certainly not saying that either of these companies were going to go away any time soon. That is the problem with business today, we have too short of an attention span. If it is not going to happen in the next month or year, we don't think of it as going to happen at all. Technology and especially the internet have reinforced this view, because markets can change very rapidly these days. The truth however is that well established markets with large players tend to die very slowly, a little bit at a time over a period of more than a decade.

Then on Friday I read the announcement that Microsoft and Intuit have agreed to join together their cloud efforts at developing new applications aimed at the 27 million small businesses using Quickbooks. The truth is both players are showing up kind of late to the game. Over the past 1-2 years, there have been a lot of really good web based applications released and they are aimed straight at those same 27 million small businesses using Quickbooks. Very much like Intuit was seen when it released Quickbooks in 1998, these new upstarts are probably on to something. The best products in the world are created because someone recognized a need and came up with a novel way to meet that need. Unfortunately large companies that already have significant market share are often very slow to recognize needs and even slower to come up with revolutionary ways to meet those needs. They usually prefer evolutionary rather than revolutionary change.

Give Intuit and Microsoft credit, they did show up and both companies have a huge established user base, but I think the ultimate success or failure of this new partnership is going to depend on just how far outside the box these two established players are willing to go to meet needs.

IRS Guidance Haiti Earthquake is a Qualified Federal Disaster

2010-01-22T19:31:00.003-06:00

Washington — The Internal Revenue Service today issued guidance that designates the earthquake in Haiti in January 2010 as a qualified disaster for federal tax purposes. The guidance allows recipients of qualified disaster relief payments to exclude those payments from income on their tax returns. Also, the guidance allows employer-sponsored private foundations to assist victims in areas affected by the January 2010 earthquake in Haiti without affecting their tax-exempt status.
Charities usually fall into one of two categories — public charities or private foundations. Under the tax law, a private foundation that is employer-sponsored may make qualified disaster relief payments to employees affected by a qualified disaster. These payments generally include amounts to cover necessary personal, family, living or funeral expenses that were not covered by insurance. They also include expenses to repair or rehabilitate personal residences or repair or replace the contents to the extent that they were not covered by insurance. Again, these payments would not be included in the individual recipient’s gross income.
Qualified disasters include Presidentially declared disasters and any other event that the Secretary of the Treasury determines to be catastrophic. The IRS has determined that the earthquake in Haiti that occurred this month is an event of catastrophic nature for purposes of the federal tax law.
The IRS will presume that qualified disaster relief payments made by a private foundation to employees and their family members in areas affected by the earthquake in Haiti to be consistent with the foundation's charitable purposes.

Payroll Service

2010-01-22T11:55:00.001-06:00

Checkout the small business payroll services.
$25 per month for up to 5 employees
Online Payroll Tax Services

Everyone has their own perspective

2010-01-20T10:27:00.001-06:00

Years ago, I did some work reviewing the financial statements for a group of family trusts. There were about 15 different trusts that had been established by an extremely wealthy man for each of his children, grandchildren and great grandchildren. The basic setup for each trust was that the beneficiary could withdraw any amount of earnings each year from his or her trust, but could never draw down the principle balance of the account. Personally I was not all that familiar with the family dynamics as another group of CPA's had actually done the work and I was just a disinterested objective third party who was checking the technical accuracy of their work. While I was there, one of the grand daughters came in for a meeting with the gentleman who was responsible for managing all the various trusts. She was a woman in her early 40's, she was visibly upset and proceeded to yell and scream at this poor man about how it was completely unreasonable that he could not find a way to get her more money from her trust. It seemed totally unfair to her that they expected her to live on just what she withdrew from the trust. She was well dressed and did not appear to be destitute, but it seemed from the conversation, she had no other source of income, besides the money she withdrew from the trust left her by her grandfather.

Of course being the nosy accountant that I am, I inquired as to which trust report was her's and proceeded to see what sort of meager existence this poor woman was having to live on. It turns out she was barely scrapping by on $1 million per MONTH as the earnings from her trust for the previous year had been just over $12 million.

Now you could say that she was obviously a spoiled rich kid who had always grown up being able to afford to buy anything she wanted and that she was just stupid to think you can't live a month on more than what most of us make in 10 years, and you would be correct. As I have retold that story over years; however, I have come to realize that it truly was her perspective, not so much that she could not live on an unbelievable monthly stipend, but that she had no idea where to start cutting her expenses.

I once worked with a gentleman who was without a doubt the most frugal person I have ever known. We would make fun of him because he was always looking for ways to save a penny on something. Granted sometimes his penny pinching ended up costing more than it saved, but he was never deterred to cut costs somewhere. I asked him what drove him to be such a cost cutting nut and he said that it was a kind of game he played with himself. He was always challenging himself to see if he could get by with a little less of something and it had become a source of fun for him. 2009 is only the second year since I left college that our family income was less than it was the year before. I look back and realize that we got very good at spending right up to and sometimes beyond what we brought in each year. I know my family and I have personally gone through several budget cutting exercises in 2009 and I will be honest it was a very hard thing to start doing, but I also learned that like my friend it does get easier to challenge yourself about what can I really do without. Plus, you start to appreciate a lot of small things that you used to take for granted.

I have also come to realize that in some parts of the world (like Haiti which we are hearing a lot about or Zambia where my family has taken up the cause of orphans) that I look like that spoiled rich woman who couldn't live on $12 million a year. At least I look that way from the perspective of the people who are living on $50 a month in those countries. There seems to be a growing consensus that the US economy is in for a long slow period in our economy, instead of the boom days of the past couple of decades, so I will keep challenging myself to choose what can I do with less of and show a greater appreciation for the things I do have.

Need help budgeting?

Obama proposes new "Big Bank Fee"

2010-01-15T07:34:00.003-06:00

You have heard of BFF, well this is a BBF and it does not look like the president is going to be best friends forever with some of the nation's top bankers. President Obama has proposed a new Financial Crisis Responsibility Fee to cover the cost of TARP bailouts in 2009. 10 key points the Treasury Department has released about the proposed fee.

1. Require the Financial Sector to Pay Back For the Extraordinary Benefits Received: Many of the largest financial firms contributed to the financial crisis through the risks they took, and all of the largest firms benefitted enormously from the extraordinary actions taken to stabilize the financial system.

2. Responsibility Fee Would Remain in Place for 10 Years or Longer if Necessary to Fully Pay Back TARP: The fee – which would go into effect on June 30, 2010 – would last at least 10 years. If the costs have not been recouped after 10 years, the fee would remain in place until they are paid back in full. In addition, the Treasury Department would be asked to report after five years on the effectiveness of the fee as well as its progress in repaying projected TARP losses.

3. Raise Up to $117 Billion to Repay Projected Cost of TARP: While the Administration projected a cost of $341 billion as recently as August, it now estimates, under very conservative assumptions, that the cost will be $117 billion--reflecting the $224 billion reduction in the expected cost to the deficit. The proposed fee is expected to raise $117 billion over about 12 years, and $90 billion over the next 10 years.

4. President Obama is Moving up the Commitment to Provide a Plan for Taxpayer Repayment Three Years Earlier Than Required: The EESA statute that created the TARP requires that by 2013 the President put forward a plan "that recoups from the financial industry an amount equal to the shortfall in order to ensure that the Troubled Asset Relief Program does not add to the deficit or national debt."

5. Apply to the Largest and Most Highly Levered Firms: The fee would be levied on the debts of financial firms with more than $50 billion in consolidated assets, providing a deterrent against excessive leverage for the largest financial firms. By levying a fee on the liabilities of the largest firms – excluding FDIC-assessed deposits and insurance policy reserves, the Financial Crisis Responsibility Fee will place its heaviest burden on the largest firms that have taken on the most debt. Over sixty percent of revenues will most likely be paid by the 10 largest financial institutions.

6. Applied Only to Firms with More Than $50 Billion in Consolidated Assets: The fee would only be applied to firms with more than $50 billion in consolidated assets. No small or community bank would be covered by the fee.

7. Fee Would Cover Banks and Thrifts, Insurance and Other Companies That Own Insured Depository Institutions, and Broker-Dealers: Covered institutions would include firms that were insured depository institutions, bank holding companies, thrift holding companies, insurance or other companies that owned insured depository institutions, or securities broker-dealers as of January 14, 2010, or that become one of these types of firms after January 14, 2010. These institutions were recipients and/or indirect beneficiaries of aid provided through the TARP, the Temporary Liquidity Guarantee Program, and other programs that provided emergency assistance to limit the impact of the financial crisis.

8. Both Domestic Firms and U.S. Subsidiaries of Foreign Firms Subject to the Fee: The fee would cover the liabilities of all firms in these categories organized in the U.S. – including U.S. subsidiaries of foreign firms. Operations of U.S. subsidiaries of foreign firms in the areas cited above would be consolidated for the purposes of the $50 billion threshold and administration of the fee. For those firms headquartered in the U.S., the fee would cover all liabilities globally.

9. Exempting FDIC-Assessed Deposits and Insurance Policy Reserves As Appropriate: The fee will exempt FDIC-assessed deposits because they are stable sources of funding covered by deposit insurance and already subject to assessment. Similarly, the base for the fee would be appropriately reduced based on insurance policy reserves. (Covered Liabilities = Assets - Tier 1 capital - FDIC-assessed deposits (and/or insurance policy reserves)

10. How the Fee Would Be Assessed: Covered liabilities would be reported by regulators, but the fee would be collected by the IRS and revenues would be contributed to the general fund to reduce the deficit.

The dumbing down of customer support

2010-01-13T10:09:00.000-06:00

I happen to live just up the street from one of the world's largest phone, television, internet and wireless providers. I also use their services at my home and actually have been very pleased with their service and support. If you live in the Coppell/Irving area you know who I am talking about. I had their fiber optic service installed at my house as soon as they made it available in my area. From the first day, I was impressed with the knowledge and responsiveness of their customer service. Ok, maybe it was a little surreal to call their support line and realize that they could reach out from some darkened bunker somewhere and reset my DVR remotely, but it fixed the problem so I can live with their ability to virtually intrude into my home.

Yesterday, I learned that not all customer service, even at the same multi-billion dollar company, is created equally. Along with the fiber optic internet service I get free WiFi for my laptop at selected hotspots around the country. Not the major reason I use their service, but a cool little perk.

I went to install the required program on my new laptop yesterday and during the process I get a popup that says my operating system is not compatible with their program. I need to "upgrade" to Windows 7 or install XP or Vista. I just bought the laptop in December, it already has Windows 7 on it. This seems to be beyond my ability to troubleshoot, so I call the support number at the bottom of the popup. When I get a support agent on the phone, he sounds like a young man who speaks American English as his native language. Sorry no offense if you are a customer support person who does not fit that description, but I consider that a tri-fecta.

This time however I was wrong. First, it was beyond his ability to fix the problem. Turns out they actually do NOT support Widows 7. He did however read me a nice scripted response explaining how their delay in supporting the new operating system was totally for my benefit. Secondly he completely did not GET the irony that their popup would suggest I upgrade my software to something that their program in fact did not yet support.

I really was not upset, I have come to expect that when dealing with large organizations it is the norm for one part of the company to have no idea where their co-workers are nor what they are doing. In this case the folks that put the content on the web had gotten way ahead of the people that actually implement the software they put on the website. All I ask is that you be able to laugh at yourself and your organization when you have these kinds of screw ups. I tried a couple of times to get my customer support contact to see the inconsistency, but all he could do was go back and reread some part of his script for me, so I gave up and just took my old WinXP laptop to Starbucks to read my emails. I suppose I will follow his advice to wait a few days and keep trying to install the software as they do plan on it working, eventually.

Interesting post on avoiding high tax states

2010-01-05T15:41:00.000-06:00

Honor

2009-12-30T07:26:00.000-06:00

"An honorable reputation is built less on doing the things you can, and more on not doing the things you could.."

Is LinkedIn choking on the rhetorical question?

2009-12-29T14:58:00.002-06:00

Don't answer that, it was a rhetorical question. I could just as easily have titled this is spam killing some of the big social media sites. If you use LinkedIn and participate in any of the groups on the site, you have to have noticed that the discussion section in many groups has been overtaken with self promotion. I believe that the founding fathers of LinkedIn intended the discussions to be legitimate questions that folks were looking to have answered or at least relevant topics that would seek input from the group. By definition a rhetorical question is not really seeking input. Not to single out LinkedIn either, Facebook is just as bogged down with posts that add no real value.

Social media works much like society. Social networking sites start up with a general concept and purpose and there are usually initial societal "rules" sometimes written and many times un-written that govern behavior of the members. The original founders of a social media site get to play god, king and president to a certain degree. They can allow a narrow range of freedom for the users resulting in a dictatorial society or they can be much more loose about enforcement of rules, if they even have rules at all. Those of us who live in the US tend to think of dictatorships as bad, but in the cyber world, neither approach is inherently bad. A dictatorial site where the founders/owners/management exert tight control actually tend to stay more true to their original purpose and function. The downside being this approach limits the growth and appeal of a particular site which many folks see as bad because everyone wants to create the next Facebook/Twitter/LinkedIn internet success story, which is really a numbers game of having the most people signed up and theoretically visiting your site on a regular basis.

In the real world, dictatorships tend to be frowned on because of the high cost, and in some cases complete inability, to relocate. In the cyber world relocation is a "mouse click" away. If you don't like a particular "society" in social media, then you just leave and never return. You have the freedom to maintain your "citizenship" wherever you please.
If a particular social site does not have a dictatorial management, then it will often fall to the members to self police themselves and others. The self policing or lack there of, can in fact determine the relative success of any site. The basic question is are you getting value from a site. Value may be monetary in that you find new customers, clients or products. Value may be emotional that you enjoy the social interaction. You may simply find entertainment or informational value from a particular site.

There is always a cost, even if it is just your time, to using a social media site, so the proposition is that the value (benefit) you receive needs to out weigh the cost. One of the costs of social media today is enduring a certain amount of spam. I never knew there was such a need for search engine optimization and that there were so many experts in the field, until I started spending some serious time with LinkedInand Twitter. Despite what many will say I often find the value proposition to Twitter is easier to justify than LinkedIn and Facebook, because the spam is so much easier to ignore on Twitter.

Obviously the three big have a lot of traffic and really don't do much to police the amount of self promotion that goes on at their sites. I find it interesting that social media sites that appeal to a younger demographic tend to be better at "self-policing". BrazenCareerist and Under30CEO definitely trend toward a younger crowd and the expectation there is that you are adding value to the discussion. I actually got called-out for a post on one of those sites as being too spammy. In my defense, I was answering the question "what do you do", but when I re-read my response, my accuser was right. I had just regurgitated my 15 second elevator speech and totally missed an opportunity to add some value to the discussion. A mistake I quickly corrected.

Social media is constantly evolving, but I can say that just looking back at 2009 in review I believe the "cost" of using LinkedIn and Facebook has gone up for me in just 12 months. As a result I find that I spend less time with each of those sites. Where I used to read every email digest from LinkedIn groups, I now find myself sometimes just deleting the email because I am too busy to bother. With Facebook, I would immediately respond to every message back in January, now I screen those messages and find that I delete more than I actually respond to.

I can't say if I will ever abandon those sites, but it seems my usage of them has evolved rather quickly and I am spending less time living in their society than I did a year ago. If I am an average social media user, someday LinkedIn really may choke on those rhetorical questions.

Check me out

2009-12-16T16:29:00.002-06:00

I was listed as one of the small businesses of the week on Network Solutions blog, so go check me out.
C9MRMWUVY7R9

The Geography of a Recession

2009-12-10T13:46:00.000-06:00

I found this link to a time progression of the unemployment rate in the US from February 2007 through October 2009. Interesting visual of how unemployment spread across the country and also a little scary when you consider that this is a period of only 32 months.

Is now a good time to buy another business?

2009-12-03T10:52:00.000-06:00

When the economy has an extended down cycle, like what we have experienced for past couple of years, the value of many small businesses tends to drop. At one time I worked for a very large conglomerate that would acquire as many as 100 new businesses a year. In fact a big part of my job was to constantly be looking for and evaluating small businesses that had some synergy with the existing companies we already owned. Buying another company is not something that is limited to huge corporations. You might be surprised to learn that many of your small competitors and even small businesses that serve markets adjacent to yours are looking to bail out during difficult times. It may not take as much money as you think to grow your business rapidly.

I will offer a few guidelines you should consider before you go on a buying spree.

Don’t consider acquisitions, unless your existing business is stable. Integrating another business into yours will take a lot of time and effort and your existing business should be able to keep going without your care and feeding for a while.
Look for businesses that are direct competitors or serve the same or directly adjacent markets to where you already are. If you don’t already understand the products or services your target sells, don’t buy it thinking you will learn about their business after you own it.
Don’t just look for bargain basement companies that are in trouble. The process of integrating and succeeding with an acquisition is much easier if the acquisition is not already on life support. There are people called turn-around specialists that make a living out of buying and “turning around” struggling businesses. The changes are, you don’t have all the skill sets a team of turn-around specialists has.
Do include your “team” in the process. If you have some good people working with you, or even a team of trusted outside advisors, use them for their expertise. Also depending on the size of your acquisition, you might pick up some great “new” team members.

Finally there are some significant tax advantages to selling a small business right now. If you own stock in a “Qualified Small Business” or Qualified Small Business Stock, 50% of the gain from selling that stock is excludible from calculating taxes and the maximum rate of tax is limited to 28%. There may be some motivated small business sellers looking to make a deal as the terms of QSBS exclusions will start changing after 2010 until it is completely phased out in 2014.

Medicare Fraud and Healthcare Reform

2009-11-18T16:26:00.002-06:00

Only a bunch of politicians could come up with this one. According to a report from the White House, the government paid over $98 billion in improper payments to people, firms and contractors in fiscal 2009. More than half, approximately $55 billion, of that was in payments related to medicare/medicaid programs. Peter Orszag, the director of the Office of Management and Budget, told reporters that is why we need healthcare reform.

I guess the logic goes like this-people cheat the system (ok maybe some are not intentional, but come on $55 B-there is some cheating going on), the HUGE bureaucracy that is supposed to manage the system doesn't stop the cheating, so what we need is a HUGER bureaucracy because that's going to solve the problem.

We are from the government and we are here to help!

Zambia

2009-10-21T09:43:00.002-05:00

My son works for a non-profit organization in Irving Texas called Family Legacy Missions. They are dedicated to working with orphans in Zambia. I have found that if you need to feel better about your life, help out someone who is in much worse shape.

I'm Foxie

2009-10-19T15:27:00.009-05:00

Ok we are officially in a new era of media coverage, you can no longer ignore the shift. How else could you explain top officials from the administration of the President of the United States taking on a major news (or opinion if you prefer) outlet in a war of name calling. White House senior advisor, David Axelrod, was on "This Week" with George Stephanopoulos saying that Fox News was not a "real" news organization. At the same time a video of Obama's communications director Anita Dunn surfaces talking about how their team "controlled" the media coverage during the election, forcing the reporters to cover what the Obama team wanted covered.

If you want to go back to when Ronald Reagan was president, I think you can see even then a shift in the relationship with news organizations and politicians. Do you remember the line from "Back to the Future" when Doc Brown in the 1950's has finally accepted that Ronald Reagan is president in the '80's. He says "no wonder your president is a movie star, he has to look good on television". Reagan did look good and came across good on television and I would argue was a "rock star president" when Obama was still in college.

Around this same time you had the tipping point in the proliferation of cable channels and alternative news outlets like CNN. You also started hearing about the "liberal media" a lot more during the Reagan era. Folks in the media are people with opinions and it has become much more accepted for them to express their opinions. Go back to George Stephanopoulos, the guy worked for Bill Clinton before he worked at ABC. (For the record, I actually think Stephanopoulos has done a pretty good job of being unbiased, better in fact than most of ABC's other national anchors)

Fast forward to 2009 and the abundance of blogs, news sites and even comedians delivering the news. (I read a poll that people under the age of 30 listed John Stewart as their number one source for news) We should not be surprised when personal bias starts to seep through in news coverage. What do I mean seeps through, strong opinions is the basis for attracting an audience for many shows today. The problem is it gets harder to know who to believe and we get upset when a new era news outlet does not have the same bias as we do. (I have not heard anyone from the current administration complaining about the obvious left leaning politics at MSNBC, but they sure don't like the right leaning politics of Fox.)

When I go back and listen to Anita Dunn's video, I actually realize she get's it and her team probably did the right thing. Their job was to get their story out and they found a way to work around the bias in today's news media. The part I don't understand is why they can get that complex issue, come up with an effective game plan and yet don't realize it does them no good to go to the mattresses with Fox. Even if you think Fox started the fight, which they did.

My mother always said if you wrestle with a pig, you both get filthy, but the pig enjoys it.

The choice for you and me is we either choose our camp and continue to believe what that camp's "talking heads" tell us or we have to work at this and get a lot smarter by listening to all sides to figure out what we believe for ourselves.

I bet you wish you could go back to just having Walter Cronkite tell you what you needed to know.

Who is Meghan McCain and why should you care?

2009-10-15T12:13:00.007-05:00

Meghan McCain is the 24 year old daughter of Senator and former presidential candidate John McCain. Her father may not have won the presidential election last year, but his daughter certainly won a new found celebrity status following the campaign. Meghan now writes for the Daily Beast and seems to show up regularly on television, including appearances on Larry King, Bill Maher and the View. I will be honest that I did not know much about her until I started reading about some of her political views. What caught my attention was a comment that she considered herself a social liberal and economic conservative, which pretty well describes how I feel about most things. More importantly it describes the views of my three sons (who are around Meghan's age) and most of their friends. (those are the folks who will be electing our political leaders in years to come)

What I really find interesting as I have read more about Meghan is the reaction she generates from the far right and far left of America. She, much like her father, has staked out a pretty moderate position in the political spectrum. She wrote a column questioning the Republican party and its support of ultra-right journalist Ann Coulter and other far-right politics. In response conservative talk show host Laura Ingraham basically said Meghan was young, stupid and fat. (when they get personal, it means you have already won the argument) She appeared on "Real Time with Bill Maher" and was taken to task by left leaning Paul Begala for some of her statements. Leftist columnist seem to think Begala "schooled" Meghan. Personally I think Begala just comes across as mean spirited. Watch and decide for yourself.

Meghan's latest public drama comes because last night she posted a twitpic of herself holding a book about Andy Warhol. (I am pretty sure it's not the book that garnered so much attention)

Meghan seems to have a pretty complex set of beliefs, which I think is probably true of most of us. Unfortunately for her, there are also a lot of people who like to create "boundary issues" to help them identify who their friends and enemies are. When someone comes along that crosses many of those boundaries, these types of folks don't know how to deal with it. Meghan is also a young, attractive, up and coming next generation of American. As dogs get older they get meaner and more protective of their territory.

I should also point out that in today's short attention span, media saturated, sound bite world it is much easier to get folks attention (and make a living) by being a highly opinionated, yelling and screaming media head than it is to sit down and have a rational, even tempered discussion about all of our complex beliefs and how we might find some common ground to agree on and how to get along with each other.

Of course given the buzz about her TwitPic, Meghan may have just schooled that whole older generation on how to be complex and still get people's attention.

OK City best place to launch a new business

2009-10-13T10:59:00.001-05:00

CNNMoney just released its list of the 50 best places to launch a new business and the number one spot goes to our neighbors to the north, Oklahoma City. Oklahoma City scores points for having the second lowest foreclosure rate and second lowest median rent among large metropolitan areas. CNNMoney also noted that OK City has a concentration of deep pocketed investors from the oil and gas industry of years past. In fact the biggest knock on the city to our north is its lack of professional sports franchises. I am not real sure why having professional sports is beneficial to launching a business, but I guess the startups in Oklahoma City will have to make the drive south to Dallas to get their sports fix.

Intuit releases Quickbooks 2010

2009-09-29T09:15:00.001-05:00

Intuit, the makers of the popular small business accounting software Quickbooks have announced the release of Quickbooks 2010. Some of the new features in the most recent release are the ability to manage and share documents online, enhanced report

customization and the ability to convert customer check payments into electronic transfers by scanning the document in Quickbooks. You can find out more about the new version on Intuit's website.

Acorn sues the folks that exposed its criminal activity

2009-09-24T12:28:00.005-05:00

Yes you remember Acorn, the community activist group that was on the news a few weeks ago, because two of their employees were video taped advising a man and woman posing as a pimp and prostitute how to "hide" their illegal activity. Just when you were about to forget about them and move on to something else, Big Government.com is reporting that the group is throwing themselves back out for public scrutiny by suing the two people who made the video tape. Apparently Maryland law requires two-party consent to create an audio recording, plus the two employees have suffered emotional distress since being fired and exposed as criminals themselves.

The problem I see for Acorn is a legal issue called discovery. By filing this lawsuit they now open themselves up to have their relevant records, emails and documents subject to subpoena. You know the old saying "where there's smoke there's fire", I would bet more evidence exists that this is not an isolated incident. Now that evidence may become part of a public record in this lawsuit. I am pretty sure there is no shortage of well funded conservative groups who will be happy to pay some high powered defense lawyers in hopes of bringing down a liberal leaning organization that has been funded by the government for years.

For the record, I believe there probably are some well intentioned folks over at Acorn who want to do the right thing, but this has PR disaster written all over it.

If Acorn continues to pursue this case they very likely may prove that the undercover videographers illegally obtained their tape, but to use another old saying "Be careful what you wish for, because you just might get it."

Read more on recommendations for Acorn at ABS, Inc.

Tax court says no deduction for prostitutes and porn

2009-09-17T04:57:00.006-05:00

It seems William G. Halby of Brooklyn New York has lost his battle in the US Tax Court for about $47,000 which he spent on prostitutes and porn and then deducted as a medical expense on his 2005 federal tax return. They also denied his deduction of $76,000 for the same "medical services" from 2004. It should be noted that Mr. Halby also lost a case with the New York State Division of Tax over deductions totaling $322,000 that he claimed on New York tax returns from 2001 to 2005.

To his credit, Mr. Halby did get a detailed journal with the dates, "service provider" name and amount paid for every visit he made to a prostitute. Unfortunately for Mr. Halby, the tax court judge held that all the expenses were personal in nature and did not qualify as medical services, nor did the expenditures for books and magazines on pornography and sex therapy.

Mr. Halby has indicated he intends to appeal the ruling on the grounds that the judge did not consider his argument that the New York law outlawing prostitution violates the constitutional right to privacy.

You can read more at WebCPA and Jr. Deputy Accountant.

State by State Sales Tax Summary

2009-09-01T15:38:00.012-05:00

The issue of sales tax is becoming a hot topic. Primarily the interest is driven by economics. States are loosing sales tax revenue due to the tremendous growth of online sales from out of state merchants. Here is a summary by state of general sales tax information. Additionally if you click on the state name you can link to that state government's relevant website.

Alabama-4% statewide tax which local cities can add on to up to a total rate of 10%.

Alaska-No statewide sales tax; however, local cities can assess up to 7%. Many of them do.

Arizona-A tax rate of 6.3% on gross receipts of merchants. While not technically a sales tax, merchants can pass on the tax to customers and most do.

Arkansas-Statewide tax of 1% to 10% depending on category of product. 6% is the general merchandise rate. Cities and counties can add on local option tax to bring the rate as high as 12%. Arkansas does have a number of exemptions and lower tax rates on groceries.

California-8.25% Statewide tax rate. Cities, counties, service entities and transportation districts can increase the local rate up to 10.25%.

Colorado-The statewide rate is 2.9%. Cities and counties can add on additional tax and typically bump the rate up to 8%.

Connecticut-Statewide 6% tax with no additional local tax.

Delaware-No state sales tax; however, there is a gross receipts tax of around 1-2% on most businesses sales.

Florida-6% statewide sales tax with counties allowed to add up to another 1.5%.

Georgia-4% statewide with counties allowed to add another 3% in 1% increments.

Hawaii-Technically Hawaii has no sales tax. They do have a 4-5% general excise tax that is charged on just about every type of business transaction you can imagine and is in fact broader than the sales tax application in most states. You better believe the tax is built into the price you pay in Hawaii.

Idaho-6% state sales tax, cities and counties can add on up to 3% local tax, although only 10 municipalities and one county do so.

Illinois-6.25% sales tax rate, but local options can push the total rate up as high as 11.5%.

Indiana-7% statewide rate, most municipalities add 1-2% sales tax on food and beverage purchases in restaurants.

Iowa-6% statewide rate with an additional 1% which is added on by almost all counties or cities.

Kansas-5.3% state rate. Counties, cities and special districts can push the rate as high as 8.65%.

Kentucky-6% state sales tax with no local option.

Louisiana-4% state rate, local parishes and cities can add another 5% for a maximum rate of 9%.

Maine-5% general sales tax; however, the rate on food and lodging is 7% and auto rental is 10%.

Maryland-6% statewide tax.

Massachusetts-6.25% statewide tax.

Michigan-6% statewide tax.

Minnesota-6.875% tax with local add ons that can push the total rate to over 10%.

Mississippi-7% statewide. Cities can add on additional tax to restaurant and lodging sales to push the rate to 9%.

Missouri-4.225% state tax rate, but optional taxes from cities, counties and special taxing districts can bring the rate over 9%.

Montana-Montana has no state sales tax, but some municipalities have up to a 3% sales tax.

Nebraska-State rate is 5.5% cities can impose up to another 1.5% for a total of 7%.

Nevada-Nevada has a statewide rate of 6.85%, but cities and counties can add on to raise the rate as high as 8.1%

New Hampshire-New Hampshire does not have a general sales tax. It does impose an 8% tax on meals, rental cars and lodging, a 7% tax on phones, 1.5% on real estate transfers (which is assesed on both the seller and the buyer)

New Jersey-7% statewide tax. Interestingly New Jersey allows for a lower local tax rate in specified "Urban Enterprise Zones".

New Mexico-Another state that technically does not have a sales tax. They do have a 5% Gross Receipts Tax. (see Hawaii for how that works)

New York-New York has 4% state sales tax. Local cities and counties can add another 4.5% and the Metropolitan Transit Authority adds another 0.375% for a total of 8.875. To add to the confusion in New York, local governments determine their own sales tax exemptions.

North Carolina-State tax rate is 5.5%, 8 of 100 counties add 2.5% for a total of 8%. 91 counties add 2.25% for a total rate of 7.75%. As an additional bonus Mecklenburg County (Charlotte) adds another 0.5% to fund light rail for a total rate of 8.25%. North Carolina's state rate was 4.5% but the rate was temporarily raised 1% on Sept 1, 2009 and is scheduled to expire July 1, 2011. (To find out how that has worked out for other states, see Rhode Island below)

North Dakota-North Dakota has a sliding scale of state sales tax from 3-7% based on the category of the item purchased. You can tack on anywhere from 1-2% on top of the base rate for local sales tax.

Ohio-The base rate is 5.5%. Counties and transit authorities can add another 2.5% each, but the total rate cannot exceed 8.5%.

Oklahoma-4.5% state rate and cities and counties can add up to another 4% for a total rate of 8.5%.

Oregon-Oregon has no statewide sales tax. Local cities can impose sales tax and many have added up to 5% tax, typically on food and lodging.

Pennsylvania-6% statewide tax. Allegheny County (Pittsburg) and the city of Philadelphia have an additional 1% for a total of 7%.

Rhode Island-7% statewide rate. The rate went from 5% to 6% in the 1970's and from 6% to 7% in the 1990s. Both increases were temporary, but they have not gotten around to lowering it back down yet. (Pay attention to Rhode Island if you live in North Carolina)

South Carolina-6% statewide rate with local cities and counties allowed to add an additional 1% each for a total rate of 8%. Myrtle Beach also has a 1% Education Capital Improvement Tax which makes its effective tax rate 9%.

South Dakota-4% statewide sales tax with an additional 2% tax added on by cities and up to an additional 4% that can be added by Special Jurisdictions (Indian Tribal Territories). South Dakota also has a tourism tax of 1% that is added on to lodging and amusement services all year except for visitor intensive businesses, which only pay the tax in June, July, August and September. (I am a warm weather guy, so I am not sure it's worth 1% savings to visit South Dakota in January.)

Tennessee-The state charges 7% sales tax. (5.5% on groceries) Counties can add another 2.75%, but if the county does not charge the maximum rate, cities in that county can impose a sales tax to bring the total up to 9.75%.

Texas-6.25% State sales tax. Cities, counties, special taxing districts and transit authorities can add on up to 2% more.

Utah-4.75% State rate, but cities, counties, unincorporated towns, rural hospital districts, local highway, zoos and art districts and resorts drive the rate as high as 16.35%. Different categories of items in Utah have vastly different sales tax rates.

Vermont-6% General state rate, but meals and lodging is 9% and alchoholic beverages 10%. 1% local option can be added on top of any of the state rates.

Virginia-5% rate broken into 4% for the state and 1% for local government. Certain groceries are taxed at 2.5%.

Washington-6.5% statewide rate with local option taxes from counties, cities, hospital districts, transit districts and revenue development districts pushing the rate as high as 10% in some areas. Washington does have a number of exemptions to sales tax including most groceries and prescription drugs, newspapers and sales to members of indian tribes.

Washington DC-5.75% sales tax which increases to 6% effective Oct 1, 2009.

Wyoming-4% statewide rate. Local counties and resort districts can add additional tax to bring the rate up to 9%.

PayPal and Old School Bookkeeping

2009-08-27T20:07:00.006-05:00

Many online vendors who use PayPal, mistakenly assume they also have to use Quicken or Quickbooks for their bookkeeping. While PayPal has done a very nice job of integrating these two popular products into the transaction reporting of their site, I am not sure this is always the best option for every online seller. I am going to point out two other bookkeeping options that may be better suited to your business.

First you need a quick history lesson. Before almost everything about bookkeeping
became computerized, it was a manual process. Businesses kept what were known as sub-ledgers. A sub-ledger might record all of your sales transactions for a month. At the end ofthe month, you would total your sub-ledger and transfer that total as one line into your general ledger. Both of the tips I show you today will essentially go back to creating a sub-ledger,
although we will be using the computer.

I will also tell you how going “old school” and having a sub-ledger may
give you a powerful marketing tool.

Option 1. PayPal has
a wonderful reports section. When you are on the My Account tab in PayPal, hover over the tab for History. You should see a drop down menu and towards the bottom of that menu is the link for Reports. Click on the Reports link and you will go to a screen that summarizes your PayPal account transactions. In the middle of that page is a link for Monthly sales report. After clicking this link, you will select the month to view, typically the prior month and select View Report. What you should see now is a very nice clean summary by day of your monthly sales for the previous month. You can even download this report in a pdf, comma delimited or spreadsheet format. I suggest you pick whatever format you are most comfortable working with. Name the file something like “July-2009-PayPal-Sales”. You will notice at the bottom of the report are totals. If you are using a bookkeeping program, such as Outright, open your bookkeeping program and record the total of the amount received column under the income tab. Then under the expense tab, record the total of the payment fees column. You may want to create a separate category for PayPal fees to keep track of the cost to your business for using the service. If you have any refunds on your report, you need to enter these amounts the same way except enter them as a negative number by putting a minus sign in front of the number.

(tip: the minus sign works in Outright, but if you use a different bookkeeping software check to make sure it will accept negative values)

Option 2. Option 2
works very much the same as option 1. It actually requires an extra step, but I will tell you why I think that step is worth the minimal effort. Return to your My Accounts tab in PayPal and hover over the History tab again. Above the Reports link is a Download History link. Select this link and you will see options to download your transaction history.

From this page you can download your PayPal transaction history for any time period you select, keep it simple and download all of the prior month. If you download to a comma delimited file, you can open this in any spreadsheet program like Excel, Google Docs or Open Office. You will have the same columns in your spreadsheet that you had in your monthly sales report. You use the same process as in Option 1 to enter your income and expense.

(tip: select the last day of the month you are
reporting as the transaction date for your entry in your bookkeeping software)

Here is the one additional step, you will have to enter formulas to total your columns, and calculate the amount to put into your bookkeeping records.

As promised, here’s the payoff. You now have a very powerful database of all of your PayPal sales transactions for an entire month. There is even an option to download All Activity, which will give you customer names, email addresses, shipping information, what they purchased and the date and time of the purchase. Using the database functions in most spreadsheet programs, you can sort this information any number of ways. You can even graph how many widgets were sold between 2 and 3 am on Saturdays. That is pretty powerful marketing information to have.

PayPal is by far the most popular online payment option used by e-sellers today.

As of 2009, PayPal reports that it has approximately 70 million active users.

For 2008 they transacted over $60 billion and expect that to double over the next 3 years.

According to Paymentsviews.com,
merchants who add PayPal see sales increase up to 14%. Now you also know how to integrate PayPal with your bookkeeping and improve your marketing at the same time.

Life's Not Fair

2009-08-13T15:44:00.006-05:00

You have obstacles that have been placed in your way and that’s not fair. I know this because the day life becomes fair St. Jude, Family Legacy Missions and child protective services will be out of business. You may be treated unfairly, but if you are sitting in front of a computer reading a blog written by some random guy, I can guarantee you there are other people in this world who have bigger problems than you.

If you are a person who sees it as their mission in life to speak out for a disenfranchised group, I challenge you to demonstrate your passion for that cause by forgoing any compensation for those efforts for one year. If in one month, people are not outraged and demanding to support you, then you have a pretty good indicator how others view the value of your work.

I believe you can complain about the obstacles life puts in front of you and gain some people's sympathy or you can overcome those obstacles and earn everyone's respect.

Is Age Just a Number?

2009-08-05T08:11:00.007-05:00

I bet you did not even know that the US Supreme Court recently made a dramatic change in procedures for litigating age discrimination cases. The court agreed to hear a case involving what is called "mixed-motive" discrimination. Basically that means there is more than one factor involved with a layoff, demotion or other negative employment decision. Previously an employee had to prove that age was one of the factors to file an age discrimination claim against an employer. It was then the employers burden to show that the decision was made for legitimate reasons OTHER THAN age.

What the Court did with this ruling is shift the total burden of proof to the employee, who must now prove that age was the deciding factor in order to pursue a case of age discrimination. Age discrimination is difficult to prove to begin with and now the court has set a pretty high standard for future cases.

The truth is, it can be almost impossible to know what the real factors are in any employment decision. Probably a much bigger problem facing older workers today is not the decisions in current employment, but the fact that they often are screened out before the interview process even starts.

Here are a few tips for those "over 50" job seekers.

1. Minimize dates on your resume but don't be misleading. Emphasize the positive economic impact you have had on previous companies rather than your tenure. Most resumes get a quick keyword scan these days, so draw the attention to your previous contributions not your years of experience.

2. Keep your technology skills current. No matter what job you are applying for you should know how to use Microsoft Word, Excel and Powerpoint. If you can't put that on your resume, go take a class and then put it on your resume. In my opinion, don't put that you know how to use Outlook. It is assumed EVERYONE knows how to use email.

3. I know you have a cell phone and I know that in 2009 that cell phone is capable of receiving text messages. Under contact information put cell/txt and your cell phone number. Then go get one of your kids or grandkids to show you to read and reply to text messages.

4. Have an online presence. Sign up for an account on LinkedIn, Facebook and Twitter. Yes sign up for ALL THREE. Trust me it is not that hard and if it is that hard for you, think of it as a chance to spend some quality time with a 12 year old you know who can help you out. This is one you can actually turn around to your advantage, because a lot of 20 somethings still have not learned that employers really do check these sites.

I know you are not going to have a picture of yourself drunk at a frat party. You would not want anyone to see you in those patent leather shoes and plaid bell bottom pants you wore to the last frat party you attended anyway.

5. Finally check your email address. If it is Num1granpa@verizon.net, go to www.gmail.com and get a new professional looking one to use for job searching. You might consider a gmail account regardless, just because it is free and gmail was launched in 2005. Having a gmail address proves you have actually used the internet in the last 4 years.

Where to find More Information:

Job Hunting for Those Over 50

HR World

Jobs Over 50.com

AARP's Job Information

The Old Folks who Stuck It to the Old Folks

That's Why you Hire Accountants

2009-07-31T09:41:00.010-05:00

You may have read in the news that the Cash for Clunkers program is being scrapped, after ONE WEEK. Let me explain the basic problem with the program and why it lived such a short life.

Don't panic, I know the President and Congressional leaders could not do the math but I promise to make it simple for you the average non-accounting type.

Congress appropriated $1 Billion for the program

sounds like a lot right?

Each car that qualified and was traded in is worth at least

$3,500 so that's 285,714.28 cars. ($1B/$3,500)

Let's be generous and round that up to 286,000. I saw a 1/2 a car once but I never have never seen 0.28 of a car.

There are 16,000 car dealers signed up for the program.

That works out to about 18 cars per dealership. (286K/16K)

Even with all the bad news about car sales there were about 13.2 million cars sold at approximately 20,000 car dealers last year. That's an average of 660 cars per dealer in a year. If a dealership is open 200 days a year they sell about 3 cars per day. (even if they were open 300 days a year it's more than 2 cars per day)

So at 3 cars per day to sell 18 cars will take the average dealership 6 days.

I know not every car that sells would qualify for the program, but I figure that is offset by the fact the above average dealerships most likely would participate in the program and some of them sell 600 cars in less than 2 months. Plus some of the cars qualified for $4,500 in rebates not $3,500. These are approximations.

Besides, I am trying to keep the math simple just in case someone from the government actually reads my blog.

Too bad the Whitehouse doesn't have any accountants working for them, or they could have pulled out their calculator and told someone that one billion dollars in the program was going to last ohhh about a week!

They do say that Congress is looking for more money for the program. I have an idea sell GM!

And just in case anyone from Washington does read my blog, I just want to go on record as saying how much I respect you fellas over at the IRS.

UPDATE

Bloomberg has reported the House approved an additional $2B for the Cash for Clunkers program. $1B lasted a week, I have brought you this far so today's pop quiz is how long will another $2B last? Oh where is all that bailout money when you need it?

The year of the CFO

2009-07-30T12:41:00.004-05:00

I love that title. Ok I am biased because I am one. You should read a post by the Economists that explains why 2009 is the year of the CFO.

Canoe Trip

2009-07-26T15:38:00.028-05:00

I was a Boy Scout when I was younger. I even earned my Eagle Scout award. One of my favorite things about scouts were the trips. I was especially fond of canoe trips, which fortunately my troop went on several times a year. Usually a group of the fathers and most of the troop would go. We would camp out the night before and canoe down the river the next day.

We had a limited supply of canoes and typically rode 3 to a boat. There is a specific pecking order in a canoe. The person in the stern (back) is the top dog, because he is the more experienced and steers the boat, the guy in the bow is number 2 because he has the best view. The bottom of the list is the guy in the middle. In most of the canoes we used, the middle guy was lucky if he had a seat and didn't have to sit on his knees. Each trip our scoutmaster would decide how to split up everyone and assign us to canoes.

It was normal that each of the fathers got to be a stern man and would typically have two of the younger guys assigned to his canoe. The older scouts in groups of three would often get their own canoe and take turns riding in the stern.

On one trip when I was 15, for some reason our scoutmaster appointed me to be a stern man and assigned not 2 but 3 of the youngest of the group, 11-12 year old guys to my canoe. I am not sure how their mothers would have felt knowing their babies' lives were put in my hands, but I am happy to say we did survive. It's not like we took on any class 5 rapids, but we did have some fairly challenging parts of the river to navigate.

On this particular trip we stopped for lunch right before an especially unique set of rapids. At this point the river split for about 100 yards and you had to choose between a pretty straight shot right off a bridge. The other choice was a route where rocks and downed tree limbs caused rapids that made an almost 90 degree right hand turn just before the two channels came back together. Put together 40 guys who range in age from 11 to 50 something and you get a lot of testosterone and inevitable competitive spirit. Add to that, we had an hour for lunch to evaluate, discuss and taunt each other about the challenge of making it down this portion of the river. We also had to evaluate the obvious risk to taking this route. Even at 15, I actually did take my responsibility for the 3 newbies seriously.

After lunch, two of the dads who had some older boys in their canoes decided they were up for the challenge. The generally accepted strategy seemed to be approach the turn slowly to insure the stern man has the best chance of steering through the gap. We all watched as the first canoe went off and almost immediately hit a tree limb at the turn flipping the canoe and dumping the occupants in the river. The second group had

an even worse time, their strategy was to get sideways before they got to the turn. They miscalculated the speed of the water and before getting through the angle their canoe struck a boulder with the water sucking the canoeist out and carrying them 20 yards down the river without their canoe.

By now most of the other guys have decided to take the safe route, and I have three 11-12 year old boys. What do 11-12 year old guys know? They have been watching this and think it looks like great fun not risky at all. So I am now committed to taking the challenging route with my sorely inexperienced crew.

The secret to canoeing through rapids is to move your canoe faster than the water, so I told my crew to hell with the accepted strategy, just paddle like crazy as soon as we take off and don't stop. I did my best to point the canoe in the general direction of the gap, so we don't have to make the turn completely, but can hopefully cut off the corner and shoot through the middle.

I suppose you have guessed we successfully shot through the rapids and made the turn coming out on the other side of the channel upright and dry. Our group in fact was the only one to make it though the challenge that day, in fact most of the other canoes opted for the safe route.

I tell this story because I think there are a lot of business lessons in it.

* Watch the people who go before you and learn from their mistakes.

* You always need to paddle faster and harder than the water around you.

* Enough enthusiasm from your team can make up for lack of experience.

* Be willing to cut corners when you need to and take an unorthodox approach.

* Even if the challenge seems overwhelming don't shy away from taking the difficult route.

( it is usually the most rewarding.)

* Enjoy your victories, for years afterwards those three younger guys would remind me about our success together.

Entrepreneurs

2009-07-25T22:40:00.015-05:00

I recently had the privilege of being in the room with about 30 small business owners and entrepreneurs. It really drove home to me why I like working with these folks so much. It was a pretty diverse group of gender, race, age and level of business experience. There were a number of folks who had been laid off in the past year or so and decided self-employment was their best option. There were some young, recent college grads who got out of school and found they were not headed for that great corporate job, because there were none to be had.

The thing that struck me though is the one common attribute every one

of these people had was optimism. To be honest there were probably a few of them who should not have been quite so optimistic, because they had no income, no funding and only a concept of a business. The purpose of the meeting was to bring together folks who were in similar situations of being recently self employed. Which in many cases meant they were recently unemployed.

They took a poll and every single person there was a Schedule C business, even the ones who had been in business 5 years and had a couple of employees. These were folks who were not sitting around moaning about how bad the economy was or how evil their former

employer was for laying them off, nor even looking for job leads. Everyone in the room had dusted themselves off, pulled up their britches, faced the fact that they had to control their future and so were doing something about it. In fact they were excited and energized to be doing something about their future regardless of where they were along the path of getting a business going.

I thought about all the business meetings I have sat through with big corporations. Meetings where we might be talking about excellent new business opportunities or even meetings where we were discussing how well things were going with a recently launched line of business. Not one of those big corporate meetings had anywhere near the level of positive energy that you could literally feel in my entrepreneur gathering.

Having worked in both environments lead me to thinking about why things are so different in big companies vs. small entrepreneurs, so here's my observations:

External Competition:

I have noticed that big business almost always views competitors as bad. The competition exists only as a target for you to crush.

Small business folks are competitive and want to win, but not many of them think having 100% market share is a good thing. I remember discussing a competitor who was opening a store literally right across the parking lot from an existing small business. The entrepreneur was not worried, he saw competition as a good thing and he had complete faith in his product. The end result was the competitor opened for business and the existing store's revenue jumped 30%. It turns out having both stores next to each other drove a lot more traffic to the shopping center. Being a major player in your market may sound appealing, but in my experience it rarely turns out well in the long term. Major market share tends to lead to laziness because you are already consuming most of the business available so additional effort to gain more brings little reward. It also allows corporate ego to set in where you think you are in control and you think you know your market and your customers so well, but in truth you eventually become out of touch with both because you quit trying. It turns out some competition and a fear of failure is a great motivator. Competition also validates that you are doing something right.

Internal Competition: In my opinion, this has to be the worst part of working in big business. Even though you would think working for the same company people could see that they are on the same team, but the truth is I have found it to be a dog eat dog environment.

There is no sense of loyalty shown to fellow employees and everyone seems to be out to promote their own personal agenda before anything else. I don't mean to make everyone working in a large company sound evil, they are human just like everyone else and human nature is to survive. Survival in a large company means staying around and beating other co-workers for the opportunities to move up. Obviously there can be infighting in a small company also, but I think in a small company it is easier to see the entire picture, making it easier for individuals to understand and buy into the idea that everyone benefits from the success of the whole team.

Enthusiasm: Like I said the group of entrepreneurs I met with were excited about their business and some had not even earned the first dollar from their new job. Contrast that with my experience in big business where it seems to be frowned upon to be overly excited about anything. I had an experience where our company was given the opportunity to showcase some of our products, for free, on a popular national television show. It is the kind of promotion value you can't buy, but rather than enthusiasm, the opportunity was generally met with an attitude that it was an inconvenience. I had to push and persuade people to get on board with the project and give any level of support to make it happen. Contrast that with a similar situation with a small company, where folks gladly threw everything at and were all pumped up about an opportunity to be featured on a local venue, even though we paid for the privilege. Maybe it is the internal competition thing where people don't want to work on something another person may get credit for. Maybe it is just difficult to find a passion for advancing the interests of a big impersonal corporation, but it is not often you see employees in large organizations who are excited about what is going on at work.

Long-Term vs. Short-Term Think:

The mantra for big business seems to be "what have you done for me lately?". I really see this in difficult economic times like the current economy. Large companies are not looking for opportunities, they just want to cut cost, usually by cutting jobs, to keep their profits on an upward trend. A capitalistic economy will always have up and down cycles, that is just the basic economics of supply and demand. Small businesses may be struggling even more than large corporations right now, but most of the entrepreneurs I talk to realize this is a down cycle and that down cycles are when you find opportunities. Finding and taking on opportunities mean the small business person has to be willing to accept lower short term profits for the potential of long term gains.

Risk Taking vs. Status-Quo: Entrepreneurs are usually risk takers. Striking out to start your own company is an unbelievably risky endeavor. It is true that the majority of new

businesses fail within the first 5 years. Large companies always seem to be trying to maintain the status-quo. I understand why. It makes success much easier and allows a company to be more efficient if things don't change. The problem I see with that attitude is change is unavoidable. In fact I believe our economy is entering an era when the pace of change is rapidly increasing. The Internet has made it so easy to identify a new market opportunity and create a startup venture, sometimes literally in days. Because of the desire to maintain status-quo it is not unusual for large companies to stay 1 or 2 steps behind the curve. It is very rare to hear of a large corporation being on the "cutting edge". In my opinion, the future is going to find large companies 5 or 6 steps behind smaller competitors which in most cases will be an impossible gap to close.

If you work in a large corporation, they are certainly not evil and you are not an evil person for working there. Every big company, started out as a small company and they drive a large part of our economy. In fact large corporations are very well suited for many people's personalities. They offer structure and a degree of security.

If you do work for a big company, but find that corporate life doesn't seem to fit, I recommend reading Escape from Cubicle Nation.

I think I am a reasonably self aware person and some of my characteristics are:

I tend to be optimistic

I tend to think long-term

I tend to be loyal to people

I tend to be willing to accept reasonable risk

If you have not figured it out yet, I tend to prefer working with small companies also.

Recent experiences have only reinforced that for me.

In my profession, I find it unbelievably rewarding to help entrepreneurs achieve success with their business. (In many ways using knowledge I gained working for large companies) The enthusiasm and "can-do" attitude is contagious.

If you have recently become self-employed, I suggest you check out the Unintentional Entrepreneur. It is put together by Network Solutions and Outright.com and it's FREE.

Numbers

2009-07-25T09:17:00.006-05:00

Maybe it comes from being an accountant. You would expect an accountant to be a "numbers guy", but I am facinated when numbers align just right. For example in about a month and a half we will have September 9. The significance is the date will 09.09.09. You get to experience this the first 12 years of every century. I enjoy how numbers interact and I think I like that with numbers there is always an answer.

Take any three digit number. 123

Repeat that number to make a new number 123,123

Divide by 7 17,589

Divide by 11 1,599

Divide by 13 123

You will aways get back to your orinial number

111,111,111 times 111,111,111 equals 12,345,678,987,654,321

I know the nerd in me is coming out big time, so here is the ultimate nerdiness for the day. When I got up this morning I checked my Twitter account and if I posted 2 updates all the numbers would align for my followers, following and updates.

All three stats at 2,000, now that's cool!

Yea I need to get out more often I know,

but first I have to start working my way up to 3,000.

UPDATE

The planets are aligning or something because it happened again today and this was just random that I happened to notice everything lined up 2,237. Forget 3000, I am going to buy a lottery ticket!

Ben Roethlisberger vs John Daly

2009-07-24T11:29:00.002-05:00

First off I live in Dallas Texas, so don't expect me to be a big Ben Roethlisberger fan, but in regards to the recent rape allegations I can only state that I am always skeptical when someone claims they are raped, declines to file criminal charges and a year later files a civil lawsuit. Before any rape advocacy folks start screaming at me, I think rape is horrific and I understand the tremendous emotional and physical toll it takes on a woman, but also understand in my opinion you are only digging that hole deeper when you won't call a criminal act a criminal act, but you do want monetary compensation for your pain and suffering.

Now that we are finished with the disclaimers we can get to the meat of this post. Is Ben Roethlisberger morphing into John Daly? You be the judge:

Another man's exotic

2009-07-21T06:20:00.004-05:00

I will admit I have never been there, but I have heard stories and just the name seems so exotic. Belize City, Belize. If you don't know, Belize is a small country on the Caribbean coast just below Mexico. In fact if you look at the map you would think Belize was created for the sole purpose of screwing Guatemala out of some prime beach.

I'm thinking of Belize today because I get regular updates from American Airlines on their great deals for last minute trips. When AA has too many empty seats, they deeply discount last minute fares. It seems Belize City is always on the list. Obviously there just are not enough folks wanting to go to Belize City on a regular basis. Today the list of destinations that needed more visitors was:

Belize City Belize
Corpus Christi TX

Ft. Wayne IN

San Angelo TX
Texarkana AR
and Wichita KS

No offense to these fine towns, but unlike Belize City I have been to all of them and I'm not sure they compare. How are you going to compete with a city that when I did a Google search here are some of the pictures that come up?

Come on Corpus Christi is the only other place on the list that even has a beach.

You know the old saying the grass is always greener on the other side of the fence. I suppose there are folks living in Belize City, who would love a chance to vist San Angelo, Texas. They do say they have every recreational activity under sun in San Angelo.

It struck me, because I realize I have lived in places other folks choose to come to and spend their vacation. Yet I rarely think of my hometown as a vacation spot. Vacation seems to mean that you are going somewhere much more different and exotic than where you live. Maybe if you live in Belize City you dream of snow in Colorado, I can't say because as much as I love the beach, living in Houston about an hour from Galveston is as close as I have ever come to living on the beach. Granted there were days in August in Houston, when Colorado sounded really appealing, but it never seemed "exotic".

According to Wikipedia, Belize City's sister city in the US is Ann Arbor Michigan. (Hey you have to dream big)

In fact, when I was 6 my folks brought me to the DFW area for vacation and I remember having a wonderful time. Of course lot's of places seemed exotic compared to Corinth Mississippi. And yes, Corinth is a vacation destination for Civil War buffs.

But, even at the young age of six, I was pretty sure DFW did not have a cool giant blue hole surrounded by reefs.

New Demographic

2009-07-18T12:37:00.002-05:00

Turns out I am now hot with the 20-30 year old female demographic. You need to read my article for Glamour Magazine

Amazon Tax

2009-07-15T08:31:00.005-05:00

States across the US are dealing with budget shortfalls and a popular new law that seems to be spreading is what the New York Post has called the "Amazon Tax". To help understand the concept, let's start with Max who lives in California and wants to buy a new flat screen television. Max goes down to Walmart, finds the perfect TV and pulls out his credit card. Included in the purchase prices of Max's new TV is sales tax which Walmart collects and sends on to the state of California.

In fact in 2008 just over 26% of California's total state revenue came from sales tax. Suppose Max thinks better about the purchase and instead goes back home to search for televisions online. Max in fact finds the exact same TV online at Bob's television and pet emporium in El Paso Texas. Since Bob is in Texas and Max is in California, Bob does not charge Max sales tax, because Texas, like every other state, does not require companies to collect sales tax on items that are sold outside of the state.

Now technically Max is required to report his purchase to California and pay the sales tax that he would have paid if he had purchased the TV at Walmart. Of course Max is probably not going to do that, because nobody else in California or in any other state does it. California doesn't like it, but they don't really want to track down every Max who buys a TV and hound him for sales tax. The state would much rather go after Bob who sells a 100 televisions a month to California residents and make Bob pay the tax on the TVs he ships into their state. Essentially it is much easier to collect tax from Bob, plus Bob doesn't get to vote in California elections, so who cares if he's mad at state government.

The only thing Bob has going for him is a legal concept called nexus. Nexus basically means that Bob doesn't have a business presence in California, so California has no legal right to require him to collect or pay tax to their state.

What the Amazon tax is attempting to do is expand the concept of nexus. Let's say Sue promotes Bob's TV business by advertising on websites or any other way she can to get people to buy televisions from Bob. In return Bob pays Sue an affiliate commission for every TV sold within 200 miles of her home, which happens to be in

Garden Grove, California. Sue doesn't work for Bob, she is and independent business person who just promotes Bob's business. Through the Amazon tax what California wants to say is Bob has nexus in the state because of his relationship with independent business person Sue.

So far New York and Rhode Island have passed Amazon tax laws. North Carolina has said it will pass the Amazon tax, possibly as early as July. California, Connecticut, Florida, Hawaii, Illinois, Maryland, Minnesota and Tennessee have all indicated they are studying the possibility and have proposed laws in their legislatures now.

I am not sure how Amazon.com feels about having a tax named after their company, but they have certainly been playing hardball with states that pass the tax. When New York and Rhode Island passed the tax, Amazon sent letters to all of it's affiliates in those states telling them Amazon would no longer be paying commissions to or signing up affiliates in those states. According to 5Star Affiliates, the last week of June the same letters went out to North Carolina and Hawaii affiliates.
The impact for the states, at least in regards to Amazon affiliates, is not only does the state not get the sales tax, but they loose any income taxes on Amazon commissions, that were being paid by the affiliates in their state. Overstock.com is another major online retailer that has followed Amazon in cancelling affiliate programs.

Obviously Amazon is in a unique position that they could be hugely impacted by having to collect sales tax for every state and they can probably afford to push back by dropping affiliates in specific states. It is too early to tell who will win in this game of chicken. As recent as July 2 the governors of California and Hawaii both vetoed Amazon tax bills presented by their respective legislatures. It appears that right now many states, and many other companies with affiliate programs are choosing to sit on the sidelines and watch Amazon and Overstock battle it out with a few states to see which side is winning, before they jump into the war.

The tax will not impact advertising revenue earned by bloggers and websites, as it is directed at sales tax which is typically charged on products. You will be affected if your site directly markets products for out of state vendors earning commission on items sold.

Online E-tailers, EBay sellers and anyone who ships products to out of state customers be sure you keep good records of where your income is generated.

Small Business Resources

2009-07-10T09:32:00.004-05:00

It has been my experience that most entrepreneurs are either really good salespeople or really good technicians. I don't typically run into entrepreneurs who are really good bookkeepers. Unfortunately good bookkeeping is an important part of running a business. I am in the business of helping folks out with their accounting, but I do want to share two really great and FREE online resources for entrepreneurs and small businesses when it comes to bookkeeping.

First is Outright. I have to admit I am somewhat evangelical about their product, I even blog for them on occasion because I think they have a great concept. It is free online bookkeeping, that is so simple to use you won't even know you are doing accounting. This is as close as I have seen to a perfect solution for sole proprietors and Schedule C business people. You enter income, you enter expenses and it creates a P&L for you. It will even estimate your taxes and prepare a 1099 at the end of the year if you use other contractors. The best part is it is free. They do have plans to expand the offering and possibly have some paid options in the future, but the basic service is free. You can even give me, your accountant, access to your records so I can help you out when needed.

Outright is simple and easy to use, but the price you pay is it won't do everything for every business. If your business grows beyond Outright, then you can graduate to Quickbooks Online. Intuit the purveyor of the most popular accounting package for small businesses has launched a free version of their product also. It is more complicated to use and will require more time and effort, but it is Quickbooks and can handle any number of forms of business entity. Plus when you outgrow the free version, it is easy to upgrade to a more advanced version and all your existing records will transfer with minimal effort.

If you are a sole proprietor, independent consultant or any other Schedule C business, check out Outright. When you outgrow Outright, check out Quickbooks. And let me know if you need help with either product, that's what I do.

Feds on the Cloud

2009-07-07T10:34:00.002-05:00

Even the federal government is on the cloud. Can you afford not to be?

Accountants World Article

Kumar Goes to White House

2009-07-06T15:47:00.002-05:00

It's not a Castle, but it is white and is a pretty big house. Kal Penn the actor who has contributed to American cinema those all time classics like Harold and Kumar go to White Castle, Dude, Where's the Party, National Lampoon's Van Wilder, Malibu's Most Wanted, Harold and Kumar Escape from Guantanamo Bay and National Lampoon's Van Wilder: The Rise of Taj. Penn whose real name is Kalpen Suresh Modi has been hired to work in the Obama administration as Associate Director of the Whitehouse Office of Public Liason.

I am not even going to attempt a joke here, because it would just be too easy. I am sure the guy is probably very qualified to do the job and Obama will lock up the 18-24 male vote in 2012.

No word yet if Harold get's to go also.

Our Social Networking Prez

2009-07-01T19:15:00.004-05:00

President Obama conducted an online townhall Q&A meeting today that was broadcast on Facebook and on the Whitehouse website. You could also follow along on Twitter to see comments by searching for #WHHCQ. First off I was pretty impressed that the President has truly embraced the internet and social networks as a way of connecting. I mean he is the President of the United States so it makes him seem more real and like a friend when you follow him on Facebook.

Ok I know he has some well paid staff that actually update his information and he is not really sitting on his Blackberry Tweeting during cabinet meetings. Although it would be pretty funny to be on Twitter and see "@joeyB did you just see Hillary give Geitner that go to hell look?" "@Ramobamo tell @FormerAggie to say he has a plan to take out Ahmadinejad"

After actually watching the Q&A, I am not so excited anymore.

A) The video and audio sucked. Everything kept jumping and stopping. I know it was not just me, because there were any number of comments from other users about the quality of the feed. I guess with all the bailout money being spent we had to cheap out on the web cam setup.

B) The whole thing seemed very scripted. He only took one question from a Facebook users. Every other question from the live audience or pre-tapped video feed looked to be a total lay-up shot for him.

C) I know he is a smart man, but in addition to point B, he never stopped to think about his answer. It's like he already knew the answer before the question was asked!

Maybe I am too harsh, he is at least trying to use technology to connect with people, but now I have to wonder if I really want to be all that familiar with my President. Maybe I was better off not knowing him so well.

To quote another great and powerful leader "just ignore that man behind the curtain".

United States Supreme Court

2009-07-01T08:37:00.002-05:00

The US Supreme Court gets surprisingly little attention unless there is a high profile case to be decided or a new justice to be appointed. That is probably the way the country's founding fathers intended the system to work. However, in today's media saturated society, I think we tend to ignore just how much influence the court has on our laws. Politicians can sometimes be hard to categorize as to if they are liberal or conservative in their views. Sure there are a few extremist on either side who you can depend on, but more and more congressmen and senators tend to stake out a position somewhere near the middle.

That cannot be said for the supreme court. The justices tend to be pretty predictable in how they will vote. The New York Times just ran an article on that very topic and the impact having a new justice, probably Sonia Sotomayor, is likely to have on the court's future rulings.

Justices are appointed for life.

Current Supreme Court Justices and which president appointed them.

John Roberts (Chief Justice) George W Bush

John Paul Stevens Gerald Ford

Antonin Scalia Ronald Reagan

Anthony Kennedy Ronald Reagan

Clarence Thomas George HW Bush

Ruth Bader Ginsburg Bill Clinton

Steven G. Breyer Bill Clinton

Samuel A. Alito George W Bush

Business Week Needs to Hire an Economist

2009-06-30T08:28:00.003-05:00

I like Business Week the magazine. I have them set up on Google reader and usually enjoy their articles. Typically they get it right when reporting on business and economic issues. Today however someone may have missed the target. It is not one article, but a combination of two articles, one right after the other that caught my attention.

First: California's Economy Too Big to Fail? Basically the government of California is probably going bankrupt, because the US Federal government has shown no inclination to give the state a "bailout". Maybe someone finally told Obama that he already spent too much bailing out GM and the Banks and his own checkbook was overdrawn. The state is expected to lay off somewhere around 60,000 workers and issue IOU's to pay it's debts. As a side note California already has the lowest bond rating of the 50 states. None of this would indicate that situation is going to improve.

Second: Is California Real Estate Near Bottom? A few micro-economic statistics would indicate that California real estate prices have bottomed out and may be headed back up. A lot of credit is given to the combination of $8,000 Federal First Time Homebuyer Credit paired with the new state issued $10,000 credit for buyers of new homes.

It seems to me there is a disconnect somewhere between these two articles. Even though they are listed side by side, maybe two different editors proofed and approved these articles. Whatever the problem is, I am pretty sure that if your state government is going bankrupt, laying off 60,000 people and drastically cutting back services it is not going to mean real estate prices are headed up. The folks counting on a $10,000 home buying credit will not be able to spend an IOU. Even the federally subsidized banks are going to require good old US currency to make that house payment.

For my friends who are California real estate investors (you know who you are!) my advice is don't jump in just yet. My prediction is things are still going to get worse before they start getting better. Besides I have some great deals for you in Texas!

DREAM Act

2009-06-26T13:22:00.007-05:00

Are you serious? Why have I not heard about this? I know why, because if it was widely publicized there would be an unbelievable outrage on the part of voters in Middle America. Apparently there is a new law making its way through the US Senate that would use government money to pay for college for illegal immigrant children. Actually to be politically correct I am supposed to say "undocumented youth". I guess that makes it sound like my own kid who is a legal US resident when he looses his drivers license.

No one in the government has yet seen fit to grant me any relief from the cost of paying for my three kids to go to college, but add insult to that now they want me to pay for 65,000 "undocumented youth" to go to college. I DON'T THINK SO. Do you really want to know why people have lost faith in the system and don't want to pay their share of federal taxes. Look no further than this type of legislation. You think it's a joke, well check this out according to their own propaganda web site the bill only needs 8 more votes of support to pass the Senate.

My suggestion is you check the list of Senators who are for or on the fence regarding this legislation and let them know how you feel.

I probably would not feel so passionate about this if I had not worked hard and paid well over $100,000 so far to send my own kids to school and consistently been turned down for any kind of subsidized federal loan or assistance. Let me know how you feel about this, and more importantly let your own senator know. You can contact your Senator HERE.

Social Media and Sociology

2009-06-24T18:23:00.017-05:00

I feel like I am becoming something of a social media guru. I have always been an "early adopter". I have been using the internet since the early 90's. I had a profile on Yahoo, I put up a Myspace page when it came out (one of the first 50,000 users). I tend to try lots of things, some I stick with some I don't.

Facebook is one that I did not jump into early. I had been on MySpace and at first glance it just seemed like more of the same and I really did not see the value. Then my wife went on a trip to Africa with a bunch of mostly 18-24 year olds. When she got back they all bugged her to sign up on Facebook so they could share pictures.

At my house when someone wants my wife to set up something online, what that really means is they want ME to set up something FOR her online, so I did.

I was at it and set myself up a FB page also. Turns out my cousins were on and they found me and we started communicating via Facebook. At some point I let Facebook access my email and send invitations to people I know and find other people for me to befriend. That led to connecting with about 30 friends from high school. (I only had 150 in my class, so 30 is a lot)

I signed up for LinkedIn a couple of years ago, but did not really start using it until early this year. I would argue that it did not reach a critical mass until sometime this year anyway. (LinkedIn launched in May 2003)

Now I am on the latest craze Twitter.

It is a lot like real world networking, you have to put something into these sites to get anything out of them. I checked and I am on 19 different social media or networking sites. To be honest with you I really only work at what I consider the "big 3" right now. Twitter, Facebook and LinkedIn. The other sites get an occasional visit from me and the rest of the time they live on auto feeds from the biggies.

It's not really a revelation, but it struck me today how each social networking site has certain demographics. What really drove it home was a discussion on LinkedIn regarding the "value" of Twitter. I graduated from high school in 1976 and college in 1980, so I fit the majority demographics of LinkedIn a lot better than Facebook or Twitter. But I was shocked at the strong opinions from my demographic about Twitter. Quote:

"Twitter = a gigantic waste of time". In fact the majority of opinions seemed to run that way.

I had flashbacks to when I was in high school and my uncle told me long hair and rock&roll were the downfall of civilized society.

My reality is that I have generated about the same number of legitimate business leads from Twitter as I have from LinkedIn. I would even say that today I can get as many new leads from Twitter or LinkedIn as I would have at the monthly Rotary Club lunch 20 years ago.

You have to recognize the different demographics and "work the crowds" differently. You wore your suit and tie to the Rotary luncheon, but you probably wore a sport coat and no tie to the YPO happy hour. (If you were born after I graduated high school, Google Rotary Club to find out what it is) You can operate in multiple online worlds, just remember where you are and who your

audience is. I do it, so can you.

Here is my highly opinionated primer on the "big 3".

Very business oriented. By far the most conservative and "older" demographic of

the three. Discussions tend to be serious. Selective networking is strongly encouraged but routinely disregarded.

Most of the networking is done in the "groups", but some groups can get bogged down by all the

self-promotion. The best approach is to be very specific about what you have to offer, offer genuine advice on topics you know about, some self-promotion is essential but try to control it. If you had to Google Rotary Club above, remember the folks here don't really want to know what you think of the new Transformer movie. Plus if you post too often, they will start to think you don't ever work.

By far the youngest demographics. Information can be anything from totally random and frivolous to serious business information. Lot's of self

promotion, but do so knowing the risk that people can easily STOP following you. Generally follow to be followed. Find a few folks who are interesting and see who they follow and who follows them. There are any number of third party aps to make your

tweeting experience easier and more productive. Try them out. Try them all out to find out what works for you. Retweet and @reply freely. Use direct messages with discretion. Definitely

put a link to your website in your profile, it is the best way for folks to really connect with you off the tweet. Understand that Twitter is not really designed for networking, more for making and maintaining connections. (kind of like the cocktail party before dinner) If you are my generation, just relax, don't sweat it. You can only post 140 characters and by the time you hit return, there will be another 100 tweets from other folks, so even if you said the wrong thing most followers will just overlook it anyway. Another thing, don't be afraid to follow and be followed by people you don't know. It's ok, not creepy.

Probably the broadest demographics of the three. It also tends to be more personal. Business and marketing use has definitely increased recently, but it still has its roots in a personal connection tool geared towards college age folks. Don't be shocked by

some of the intimate life details, including pictures, that people will share with the world. Use your existing email database to find friends on here. This is one site you might consider it worth having a personal and a business profile, but be warned some business contacts will find your personal site and vice versa. If all you want to do is connect with personal friends this is where you start. If you want to network for business purposes, start with the other two.

If you wish to connect with the author on one of his 19 profiles, go to the bottom of this page and you will see links for several of the more popular social networking sites. If have not made the plunge into social networking and know you are missing out, contact me for information on social media concierge service..you can use email. If you don't have email yet, I don't think I can help you.

PS here is a great blog post on the topic: http://www.chrisbrogan.com/19-presence-management-chores-you-could-do-every-day/

PPS interesting statistics on the growth of social media http://www.slideshare.net/mzkagan/what-the-fk-is-social-media-one-year-later

PPPS still no convinced read How Twitter Got me a 6 figure gig.

http://www.oddpodz.com/blog/1347.html