Why Should One Hire a CPA to Avoid Tax Audits?

Posted on March 31, 2023 by schatzi

A certified public accountant or CPA helps a business owner learn about various tax deductions that reduce the latter’s tax burden. A CPA can also help a business owner organize his financial records so that tax preparation becomes easier at the end of the year.

Besides, a CPA performs another function which is beneficial for a small business. Hiring a certified accountant helps small businesses avoid tax audits.

If you have been in business for the last few years, you must be familiar with the complexity involved in income tax preparations for a business. This makes it quite difficult to avoid mistakes while filing the tax returns. So, here are some good reasons that should inspire every small business owner to hire a CPA and avoid the possibility of triggering a tax audit:

Experience in Tax Return Filing
If you are able to find an experienced CPA, you can take advantage of his years of experience with filing tax returns. An experienced accountant must have been serving other small businesses in tax return preparations.

As such, he is expected to be familiar with the pitfalls and problematic areas that ultimately lead to tax audits. For this, make sure that you hire a CPA after learning about his experience in the industry.

Efficient Accounting
Maintaining business accounts is important to avoid tax audits. If you have maintained day to day accounts for the whole year, it helps you report your full income while filing tax returns. However, small business owners are often negligent toward regular accounts maintenance. A CPA can help you with this by offering two important sets of services – bookkeeping and financial accounting.

If you hire a CPA in the beginning of a fiscal year, he helps you maintain the financial records of your business right from the beginning. You must know the fact that a CPA can handle bookkeeping as well as financial accounting. Everything from payroll to business cash flow is streamlined by a certified accountant.

When it is the time for tax preparations to be done, a CPA will have a clear understanding of your business’s financial picture. With very financial record in its place, the possibility of tax audits can be thwarted

Advice on Company Status
An experienced CPA has the knowledge about what should be the status of a business to enjoy tax benefits without indulging in things that can trigger a tax audit. A CPA should advise you on whether your business should have the status of a corporation or an LLC.

The CPA might also advise you on the benefits of a partnership. A CPA helps you handle your financial dealings in a way so that they comply with the standards set by the IRS, choose whatever legal status.

Tax Documentation
Most small business owners find it difficult to prepare the documents required for income tax filing. It is indeed more complex to document business tax returns than individual tax returns. A CPA helps by making it simple to prepare tax return documents in the most accurate manner. The documents related to your financial dealings throughout the year are maintained and utilized by the CPA to prepare accurate tax returns at the end of the year.

Legal Deductions
A business owner must be familiar with the tax deductions that are legal and those, which are not. A CPA has in-depth knowledge about various deductions that can reduce the burden of tax for a small business owner. At the same time, a CPA has information about deductions that are invalid and should not be included in the tax return documents.

Any attempt to gain benefits out of invalid tax deductions can lead to the issuing of tax audit against your business. Besides, a CPA helps a business owner maintain all required documentary proofs that support the deductions included in the tax returns.

Credibility of CPA
The certified public accountants enjoy a legal and reputed status in the eyes of the IRS. Hiring a CPA over other tax preparers is preferred as the former has a legal standing in the industry. This ultimately lends credibility to the business that hires the services of a CPA. In the eyes of the IRS, the business hiring the services of a CPA is less likely to indulge in fraud or mistakes that lead to tax audits.

The tax return forms contain a section, which is to be signed by a tax preparer. If you have a CPA as the tax preparer, it reflects in the tax return forms, and the IRS has a reason to consider your tax returns to be free of errors.

Tax audits are frustrating situations for a business owner and can lead to huge penalties. So, you must choose an experienced and reputed CPA who can help you with the various stages of tax preparations so that the chances of a tax audit can be easily avoided.

Posted in Tax | Tagged | Comments Off on Why Should One Hire a CPA to Avoid Tax Audits?

So You Want to Be a Real Estate Agent? Good Luck!

Posted on March 30, 2023 by schatzi

CHAPTER 1: SOME QUICK BEGINNER’S TIPS

• Tip 1: There is a ton of money being made in real estate. It’s just not going to be made by you. In truth, much of it is actually going to come FROM you. The real estate companies themselves make an obscene amount of money in part by churning people through their “programs” and spitting them out with emptier pockets.

• Tip 2: There’s no salary. Make sure you have enough money in the bank to eat and pay your bills for six months. And start looking for a real job NOW. By the time you get it, you’ll be out of money. I landed a position at a company six months and 1 day from the day of my layoff. If it wasn’t for Unemployment, I would have been living in a cardboard box waiting for my real estate career to blossom.

• Tip 3: Everyone you know will feign support while questioning the decision and making fun of you. I’m serious, and you know this already. You’ve hated every real estate agent you’ve dealt with, didn’t you?

CHAPTER 2: THE INTERVIEW

Real estate offices are constantly listing open positions, so it’s easy to get an interview. Don’t be too nervous, because guess what? You’re hired. This isn’t an interview, it’s a pep talk. You could walk in and urinate in the lobby, you’re probably still hired.

Their ideal agent is someone who is divorced and miserable, sitting on a pile of alimony cash or an available line of credit, and just needs something to keep them busy. Next in line would be someone who is unhappily married, sitting on a pile of cash or an available line of credit, and just needs something to keep them out of the house and away from their spouse. If you’re not one of these two, that’s OK – they’ll take you.

CHAPTER 3: LICENSING

How do you make things better? You get the state involved!

This company that “hired” you will now send you to a training “school” (these are companies that, for a price, teach you all about the real estate industry and help you pass the state required test). This is 2 weeks of classes that have very little to do with the actual career.

There are laws that say that even though your licensing training is taking place in a Real Estate office, that no one from that office may “recruit” you. Expect to be recruited. One of the instructors was a Company X manager and took a special interest in me. He took me to open houses at expensive homes during the weeks of training, introduced me to everyone in the office, took me to lunches and took me out for beers after the training was over. The entire time, he talked about how Company Y (who had sent me to this training) was horrible, and why Company X was far superior, and definitely the place for me. Ethical? No. Fun? Yes. I still went with the company that sent me to the training because it was the right thing to do.

CHAPTER 4: FEES, FEES and MORE FEES

You didn’t think anything was free, did you? Here’s the rundown on fees:

• Licensing. If you talk to a real estate company before you take the class and get licensed, they’ll pay for the class. Well, sort of. They’ll pay for it, then take the fee back out of your first commission. Wait, who paid for it then? Yes, you did. You didn’t think that was free, did you?

•The Multi-List System. You simply cannot be a real estate agent without access to the MLS. It must be free right? No.

• Cardkey. You need this to get into any house that’s up for sale. Yes, you have to pay for it. And they can’t ship it; you need to drive 30 miles to pick it up.

• Associations. The County Realtor Association. You have to join it. It costs money…every year. The State Realtor Association. You have to join it. It costs money…every year. The National Realtor Association. You have to join it. It costs money…every year. Join this organization. Join that organization. You’ll get a magazine, and maybe even a pin. It’s all mandatory, and it all costs money. Sometimes they have free cookies at the meetings though.

• Signs. Small signs, big signs, plastic signs, metal signs, name signs, for sale signs, open house signs. You have to have them, you have to pay for them, and they cost hundreds of dollars.

• Business cards. They’re free! Well, kind of. The basic, crappy versions are free, the ones that scream “I’m new to this!” To get nice ones, with a picture, you have to pay, and you have to pay for the picture.

• Automobile. They’ll pay for your car! No, they won’t. If you’re one of the top 2 producers, and are willing to put a God-awful giant sticker on the sides and back of your (correctly colored) car, they’ll pay a nominal amount to you. Why shouldn’t they? It’s the cheapest advertising they could get.

• Free trips! 5 years from now, if you beat ALL the odds, work ridiculous hours and sell everything you get near, you might get a free trip. Don’t hold your breath.

• Name tag. Good news, the name tag is free. The bad news, you have to wear a name tag. Back when I had a real job, I knew a gentleman who always said “If a man has to wear a name tag during his job, he’s not very successful.”

• Realtor fees get you the “Realtor” pin. This is the most expensive pin you’ll ever hate wearing.

CHAPTER 5: THE “OLD-TIMERS”

They hate you.

When I say “old-timers”, I’m referring to the agents that have been working in the office for more than a year. They will rarely make eye contact at first because they expect you to be gone in a few months and they don’t want to waste their time. Once you’ve been there for 2 weeks, they’ll start offering you the “opportunity” to sit in their open houses for them. What they’re actually asking you to do is sit in a house for three hours that no one will visit, and basically sell it for them, on the off-chance that you could get a client out of it.

When there aren’t enough newbies in the office, they’ll fight over your house-sitting efforts, and may even offer you cash (don’t get excited, I’m talking about $20.) Get paid FIRST, I never did get paid for helping someone out.

And remember, top producers use exclamation points! Lots of them! In everything they do! Just an FYI. I mean: Just an FYI!!!!

CHAPTER 6: THE CLIENTS

They hate you.

You will be asked to basically alienate everyone you know and make social situations incredibly awkward by begging for referrals. Parties, church, school, the gym – anywhere…you need to be fishing for house buyers or house sellers. It is painfully awkward for all concerned. Don’t forget to wear the little R pin everywhere you go!

If you’re lucky enough to get someone to say they’ll use you to sell their house, you should know now that their house is worth much more than the one three doors down that is exactly the same. Why? I don’t know. Maybe they’re delusional. Maybe they’re dumb. Maybe they’re greedy. Maybe they’re upside-down on the house. Maybe they just need the money. It’s probably all of the above.

It’s weird to be involved in such a significant financial project for someone you know. They will use you to buy or sell a house, but no one wants you to know their personal financial business, so it’s difficult. Your friends and family might want little favors, like….they’ll want all their money back. Yes, seriously. I had a relative ask if I would give them back all of my commission if they used me to buy a house. I declined, and the request was probably the nail that sealed my real estate coffin shut.

CHAPTER 7: YOUR LIFE AS AN AGENT

Say goodbye to fun and leisure. Here’s your week:

• Monday. Mandatory meetings and house tours, all day. The meeting is useless, which is why you’ll rarely see old-timers there, they veer off after the first house and end up God-knows-where. They’re probably at the bar. The tour is fun, though. You get to hear everyone complain about everyone they work with and everything in the houses. You get to walk through a stranger’s house and hear your co-workers (proudly displaying their name badges) criticize the homeowner’s choices in everything. Examples: What were thinking with this carpet? Have they ever cleaned this room? Wow, those are some ugly kids in that picture. I can’t believe they left Prozac AND Paxil on the sink, what a basket case.

• Tuesday. In-house training, or “how to waste 3 solid hours of prime work time.”

• Wednesday. “Twilight” open houses. This means your night is shot.

• Thursday. Nothing is required. This is your weekend, enjoy. Don’t spend money though, you don’t have it.

• Friday. Mailings, client hunting, sitting around.

• Saturday. Mandatory training…all freaking day. Done with the mandatory 15 week training? Start ongoing training that repeats what they taught you in the 15 week training!

• Sunday. No more football games, family picnics, etc., because you need to sit in Open Houses.

At various times during the week, you’ll get a few 2 hour stints answering the phone. The idea is that clients will call in looking for an agent because they have a house they want to buy. I would guess that this has happened once, ever, in the history of real estate. Most of the time you’re sending calls to the old-timers.

I had a gorgeous Ford Mustang GT when I got this “job”. I sold it because I was told that you have to take your clients all over the place to view houses. Out with the sports car, in with the Volvo station wagon (in the horrid corporate color, of course.) As it turns out, no one wants to ride with their real estate agent; they want to follow you around in their car. This is for many reasons: so they can escape you when they want, so they can talk about the houses without you hearing them (even though you are their trusted advisor)…oh, and they hate you. I really miss that Mustang.

CHAPTER 8: “SUPPORT” (note quotation marks)

• Computers. Don’t know a computer from a toaster? Don’t worry, no one else does. I don’t know why, but everyone I worked with was horrible with any technology-related tool. They constantly needed help with the computer, and the PC’s were always down with a virus of some sort.

• Your web site. The company has set up a page for you on their website, you need to fill it with useless things that no one cares about, like “resident of (our general area) for umpteen years” and Realtor and “Member of (Our County) Real Estate Club. None of this helps them or you, but it does fill the page, even though no one will look at it. You can put a picture up there too, unless you’re ugly or hideously disfigured.

• Mailings. I lucked out with Company Y, they pay for mailings. This means they provide the marketing materials and they pay the postage for a certain amount to be mailed out. The database of addresses that you could send mail to was protected by a Rottweiler in our office, a man I’ll call Travis. Travis was tremendously tan year-round, with slicked-back hair, and he was dressed like a 1970’s JC Penny mannequin every day. I don’t know if he was gay, but I bet his boyfriend was.

• Office Help. They hate you. The first day I met Travis, he was in the middle of a full-fledged hissy fit because someone had stolen his Cross pen. This is understandable, as it’s not like they sell them at drug stores for a few dollars. Yes, they do indeed sell them at drug stores for a few dollars. The hissy fit lasted an hour, and included our manager sending a phone message to every agent in the office to please return the pen if they had it. Travis also kept a much-needed eye on the labels that one would use to send out these mailings. To get them, you had to request the exact number of sheets you needed. There were 25 on a sheet and if you were printing 68 labels, you would not get 3 sheets.

CHAPTER 9: “ETHICS” (note quote marks)

Ethics rule #1 is “just get the listing.”

This means that if you have a person that wants to sell their house for $330,000 but you and everyone know it won’t fetch $250,000, you tell them that you will list it for their price, and then slowly let the price drop when people laugh at the house.

CHAPTER 10: AFTERTHOUGHTS

I am one man. The Realtor’s Association is a huge conglomerate which no doubt has numerous lawyers on the payroll. My brother-in-law is a lawyer….but I still feel outnumbered. So you’ll notice I only refer to real estate agents, not Realtors.

Keep in mind though, that you have two choices here: you can either become a Realtor or you can become a Realtor. Yes, you read that right. I’ll make no judgments on the value of the organization, except to say that sitting through the most boring training ever nets you a tiny R pin. Nothing says I’m a success better than a pin with an R on it…right next to your name tag.

Referral Status means that you’ve quit the day-to-day grind of trying to sell/buy houses. You become inactive, but now if you point someone who is looking to buy or sell a house to your real estate company, you get a percentage of the commission.

All you have to do is pick up the phone, tell the company their name and telephone number and where they’re looking. The irony? NOW it’s payday. I know people who made more on referrals than I did as a real estate agent, many times over. Of course, there’s a fee to be in the program, but you didn’t think that was free, did you? And to stay in “referral status” you need to take ongoing training.

This is just my story. Don’t let it change your mind if you want to enter the world of residential real estate. Heck, I had a former real estate agent tell me what a horrible idea it was and I still went forward with my stupid plan.

I’m sure it’s completely different in YOUR area though, and they’re telling you the truth when they say so…

Posted in Real Estate | Tagged | Comments Off on So You Want to Be a Real Estate Agent? Good Luck!

Understanding Effectiveness of Inbound Marketing

Posted on March 29, 2023 by schatzi

Inbound marketing is largely viewed as an effective medium of brand promotion. However, it’s often viewed as a “good to have” as opposed to a necessary aspect. It is now turning out to be key essential component.

In this article, we’ll outline the meaning of the term inbound marketing and then elaborate why it’s becoming an important part of your online marketing plans.

Understanding Inbound Marketing?

In case you’re new to digital marketing; you may be a little bit confused about the concept of inbound advertising. It’s a relatively new strategy that’s almost exclusive to the web.

Inbound marketing, comprehensively, is a means of enabling your brand to get noticed by customers. Listed below are a couple of ways to achieve the desired results from your inbound marketing efforts.

The first and most popular inbound marketing strategy involves the effective utilization of content. It’s quite often that the phrase “Content Marketing”and “inbound marketing” are used interchangeably. The reality is that content marketing is a subset of inbound marketing.

With the help of effective content marketing or management, brands publish authentic and helpful content on a blog and on their website. They optimize the content to achieve better ranks in the search engine results pages (SERPs). Instead of advertising upfront and pushing the content, the content pulls the customer towards itself via blogs, social media platforms and websites. That’s how people find it and connect with the brand. The core idea is that effective content management is used to generate leads which are then converted into customers.

Another admired means that inbound advertising companies use is social media marketing. However, in this case, social media marketing isn’t the paid advertising. It’s instead used to place a human face on the entity. Digital marketers will often use social media to connect with the target audience by posting something witty or a touching story shared by people and has the elements to go viral. Brands get coverage and gain followers when they effectively use a sound social media strategy.

Now that we’ve understood a bit about inbound marketing, let’s observe why it’s essential.

Usage of Ad Blockers:

Ad blockers have been the annoyance of digital marketers for quite some time. There’s no sign that’s going to let up any time soon.

Ads are a typical example of outbound marketing. They’re usually interruptive in nature especially if they’re pop-up ads. They stand in contrast to inbound advertising companies which use different ways of pulling customers towards brands through intelligent content marketing.

People don’t like pop up ads. No matter how clever, cute, or creative your ad appears, many users simply don’t want to see it. They will install an ad blocker and take the annoyance out of their Internet experience.

That’s an effective step for them to get desired user experience, but it doesn’t do any good to marketers who run such ads in an effort to gain more business. That’s why alternative marketing strategy must be used.

What is the effective alternative available option to running ads? You absolutely guessed it right. It’s inbound advertising. Availability of experienced inbound marketing companies makes your journey of obtaining effective results easier.

Posted in Markets | Tagged | Comments Off on Understanding Effectiveness of Inbound Marketing

How To Apply For A Loan With Fewer Headaches

Posted on March 28, 2023 by schatzi

Not sure how to get a loan? Before applying for a loan, decide if you really need one. Is it for a home repair you can’t go another day without? Is it for a loaner car because your daily driver just retired? Is it for college which you couldn’t otherwise pay for out of pocket?

On the other hand, is it for a hot tub you just really want, or a new fancy car you just saw on television? Is the purpose for the loan a nice island vacation or a brand new bedroom furniture set?

Think First! It’s recommended to get a loan for something which will either return you greater value, or something you truly need. If it is a luxury item, you’ll be better off just saving your cash and buying it outright in the long run. Not only do most purchases of luxury items tend to be more expensive than necessity items, but you’ll also throw on top a huge chunk of interest to pay off over time if you purchase with a loan, compounding the cost of your lush new buy.

A loan is an agreement to borrow money, in exchange for repaying it with additional interest over a period of time. We are in a low interest environment now, but even a small percentage of interest can add up significantly over a long period of time. Interest rates can also be fixed for variable. Be sure to know the details before you sign a dotted line, as both fixed and variable have advantages and disadvantages.

The loan term is the duration of time you plan to pay back the loan to the issuer. This can be a very short time if it’s a small personal loan, or it could be a very long time, such as a 30 year mortgage. Although the time period is stated, most loans can be paid back faster; this could save you a lot in interest as well!

The loan principal is the actual amount the issuer is going to hand you when you sign for the loan. The principal is usually one of the key factors in applying for a loan, because the issuer will want to verify you have a need for the full principal.

The first thing you’ll need to apply for a loan is some sort of document showing you income. Typically, a W-2 or a few months worth of paycheck stubs should do the trick. Employment history may also be important in this phase, depending on the size of the loan. If the borrower is a business, K-1’s, tax returns, 1099’s or other paperwork may be required.

Next, an inventory of your assets will likely be accounted for. Items such as bank accounts, CD’s, 401(k) statements, stocks and mutual funds, cash value in life insurance, and other equities you might hold. These are usually additional proof you have what it takes to pay back the loan. Your assets are also sometimes eligible to be seized in the event you default on your loan.

Your personal information is also required, such as driver’s license or passport, social security number, current and past residences, contact numbers, or any other information the issuer might need in order to keep on file if they needed to find you should you be in a default situation.

Once you have applied for the loan, the issuer will more than likely run your credit score, verify your income, verify your assets, and begin taking your entire profile into account. If eligible, the issuer will write an agreement for you to sign, which will state the terms of the loan. This will include the agreed upon principal, eligible interest rate, fees to originate the loan, pay back policies, and other disclosures, rules and regulations applicable to the loan type applied for.

Be sure to read everything as this stage of the process! If you don’t understand what something means, or you are unsure if something seems right, stop and ask questions! The last thing you want is to be bound to a loan you didn’t intend to be. There is always the human element as well, and there could be a simple mistake which could cost you down the road.

Finally, after you have been accepted and have signed off the loan documents, it is now your responsibility to abide by the terms of the loan. First and foremost, be on time with you payments! Missed or late payments not only can affect your credit score for future loans, but incur fees and interest which compound against your loan amount. Late fees and penalties are a quick way to spiral your loan out of control, and cost you significantly more than you ever intended on paying.

Also, if you do pay on time, the opposite is true! You credit score can improve as you make your payments, and you’re more likely to be given any amount of leeway down the stretch should you run into unexpected hardship.

Be sure to monitor your loan regularly. Make sure you are taking advantage of the loan as best as possible. Some issuers allow you to get lower credit by auto-drafting your account and other lenders might be willing to lower your interest rate through a restructure or refinance. Whenever possible, make an extra payment or balloon payment to pay the loan down faster, as this will save you money in the long run. Loans can be a great help when used properly, but they can be a detriment if used irresponsibly.

Posted in Loans | Tagged | Comments Off on How To Apply For A Loan With Fewer Headaches