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It's Tax Time Again!

February 5th, 2009
This time of year in small business and among individuals is like a race against the clock. We will spend a good amount of time locating, organizing and filing tax documents to the Internal Revenue Service.

Many small businesses enlist the help of an accountant to help navigate the maze of tax filing. However, the IRS provides a one-stop tax information center to help small businesses and the self-employed properly file their taxes. Of course, accountants will find these resources quite helpful too with up-to-date tax rules and regulations.

Learn about filing requirements for both self-employed individuals and small businesses with employees.

Find out what business expenses are tax deductible and how you can benefit from depreciating capital equipment purchases.

Short audio and video presentations help you easily learn about the complex subject of business taxes.

Visit and learn all the facts so your tax filing will go smoothly.

Business Tax Ratings: Which States will you pay the Least

January 21st, 2009
The share of small business profits and personal income you are required to give the state in the form of taxes is a big consideration.

See where your state ranks and which provide the best business tax climate in the 2009 State Business Tax Climate Index. Recently released by the nonprofit Washington research firm The Tax Foundation, this report examines unemployment insurance, income, property, business profits and sales tax rates.

Of course, other factors contribute to a state's overall business climate - labor force, the market for products and services, proximity to suppliers and quality of life are just a few.

For 2009, the following are the 10 best states in the rankings:

1. Wyoming
2. South Dakota
3. Nevada
4. Alaska
5. Florida
6. Montana
7. Texas
8. New Hampshire
9. Oregon
10. Delaware

The 10 worst states in 2009 in regard to their tax climate are:

41. Minnesota
42. Nebraska
43. Vermont
44. Iowa
45. Maryland
46. Rhode Island
47. Ohio
48. California
49. New York
50. New Jersey

Financial Bailout Legislation Resolved Some Tax Issues, Leaves Others in Question

October 13th, 2008
The Emergency Economic Stabilization Act of 2008 was hastily passed through Congress and signed into law by President Bush on October 1st. Some tax provisions were included as parts of the final bill to help it win passage in the House, but other important issues were left to the next Congress to grapple with.

The American Institute of Certified Public Accountants (AICPA) has lobbied Congress heavily for some of these provisions, which have been included in other tax bills passed by Congress but never signed into law since agreement could not be reached on how to pay for them.

One example included in this new law is a provision equalizing the penalty provisions for tax preparers and tax payers, which AICPA vice president of taxation Tom Ochsenshlager commented "We finally got across the finish line," alluding to the fact they have lobbied heavily for it this year.

Other, more popular tax policies were also included in the bailout bill, most notably the exemption of 20 million taxpayers to the Alternative Minimum Tax, or AMT, which many see as an important tax fairness issue. The budgetary headaches were left for the next Congress to deal with however since it is not expected much will done in the upcoming lame duck session after the election.

Technology companies will also see some benefit with the extension of the expired research and development tax credit.

Since it is retroactive, the immediate benefit will be additional cash flow for companies according to Tony Mondoro, national director of research credit and technology at Ernst & Young. "With the credit crunch, a number of companies feel that they should plow the money from the credit back into their research" commented Mondoro.

Congress also increased the alternative simplified credit from 12 to 14 percent. One proposal was to increase it to 16%, which may happen next year.

Besides the budgetary matters mentioned before, Congress did not approach other tax issues that will expire in 2010, namely the estate tax cut, capital gains tax rates, and income tax rates ushered early in the Bush years. If they are allowed to expire, rates will return to their pre 2001 levels.

Tax legislation next year will, of course, hinge upon the outcome of the upcoming presidential election, but the faltering economy will certainly be the elephant in the room. "For sure there will be some major tax changes no matter which candidate is elected president. Hang onto your hat next year," Ochsenchlager warned.

Hiring Professionals for Tax Preparation and Bookkeeping

May 22nd, 2008
Don't be tempted to do your own bookkeeping and tax preparation advises Portland tax professional Joseph Anthony. Small business startups with a few partners may decide to do everything they can themselves and contract out the rest. However, just because you can do something, doesn't mean you should.

Most do not consider indirect cost such as their time and supplies they had to purchase when doing something that should be done by someone else. Anthony advises at some point early on, a small business should hire a professional for their tax returns and at least some of their bookkeeping.

One main reason is that tax professionals are more than just preparers. It is important to consult with an accountant outside of the crunch of filing season to be sure you are doing what you can to reduce the tax bill. For instance, many small businesses can benefit from creating a SIMPLE retirement plan for their employees. But, it generally has to be done by October 1 in order for there to be tax benefits for that year.

Keeping your bookkeeping accurate and in good order is not only smart business but also can keep you from having legal problems. A professional, either in-house or hired from the outside, needs to have knowledge of such things as double-entry and how to make a journal entry. Also, your books need to be as organized as possible so the tax pro can do their job effectively and in the least amount of time.

Probably the biggest thing is to be sure your tax pro and bookkeeper work together on your behalf. For instance, a bookkeeper will not know how assets are being depreciated or written off, the accountant will have to advise on that. Bookkeepers and tax pros serve two purposes; they keep you out of trouble and allow you to focus on running your business rather than getting bogged down in financial matters.

Don't Forget to Pay the Most Important Bill of All

August 17th, 2006
By Martin Lukac

What is the one bill that you often forget to pay? You may be thinking that you pay all of your bills, but you are missing one.

You need to pay yourself.

The correct way to manage your finances has you building a greater net worth each year. You have more money this year than you did last year. However, many of us simply use every cent we have on new cars, clothes and things that don't last.

You are letting one bill go long overdue. It is the bill for your future. The longer you put off this bill, the more it will cost you in the long run. If you ignore it, you will eventually face paying big time. And not just in money.

You will gladly begin to pay off your debt. You will gladly take on more debt. But think about what you are really paying for. Are these items that you will have in 30 years from now? Your fun now is costing you a comfortable retirement later.

You can't count on Social Security or Medicare. They are probably not going to be around in 20 years. The only thing you can depend on is your savings.

You are the only one that can make it happen. You can give yourself and your spouse the greatest gift of all -- a comfortable and secure future. Or you can sabotage it. But you can't just ignore it anymore. Because I'm telling you that there is a better way.

Start by eliminating your debt. Every dollar you are paying in interest is taking hundreds of dollars away from your retirement. Think I'm just blowing it all out of proportion? Run a few online calculators to see 1) how long it will take you to get out of debt and 2) how long it will take you to save for retirement at your current pace. If you aren't saving anything and have no plans to do so, you are planning on working until you die. No getting sick, no rest, no breaks. Because there will be no money.

It is a challenge. Every financial decision you make now will affect you for years to come. That is why the way you spend your money is so very important. Pay off your debt, don't incur new debt and save aggressively for your retirement. In this day and age, it is common to work for thirty years and then live for thirty years in retirement. You may think that thirty years is a long time to save, but remember that thirty years is a long time to not have any money. Prepare for your future.

Simply keep in mind how great it would be to retire comfortably. You can do that if you start now. If you have thirty more years, then great. You have time to really build up your worth without sacrificing too terribly much. Just avoid the bad debt of credit cards and unwise auto purchases. If you only have ten or so years, then you are going to have to sacrifice, but it is still possible. The key?

Start right now. Pay yourself and your future.

Martin Lukac represents and, a finance web-company specializing in real estate and mortgage rates. We specialize in daily updates, mortgage news, rate predictions, mortgage rates and more. Find low home loan mortgage interest rates from hundreds of mortgage companies!

Article Source:

March 8th, 2006

How To Interpret And Profit From Financial Statements

December 19th, 2005
by Peter Leeds
The Penny Stock Insider

Financial statements are a useful tool for judging the health of a company, and for comparing it to its competitors. They show what the company owes and owns, the profits or loses it has made over a given period, and how their position has changed since their last statement. Generally if you can tell which direction a company is heading in, you can also forecast future stock prices with some accuracy.

Gaining a basic knowledge of financial statements, and applying this knowledge when choosing or assessing investments can help you pick tomorrow's winning stocks, while avoiding tomorrow's losers.
Of course, financial statement analysis will not always factor in significant news events, unexpected incidents, changes in management, and other factors which may influence share prices, but it provides a starting point from which to gauge the present value of shares, independent of future occurrences.

The following report details some simple financial statement explanation and analysis methods. Although the topic can get much deeper and more complex, this article is designed to give investors the ability to understand the numbers and simpler of financial ratios, and be able to use that knowledge to assist them to make better decisions when doing their due diligence.

Balance Sheet

The balance sheet shows a company's financial position at a specific date, usually the last day of the company's fiscal year for annual reports. One side of the balance sheet shows what the company owns and has owing to it, called assets. The other side represents liabilities, which are what the company owes, and also has shareholders' equity, which represents the excess of the company's assets over its liabilities. Shareholder's equity is often referred to as book value.
Total assets are equal to the sum of the company's liabilities plus the shareholders' equity. In other words, take away liabilities from assets and the remainder is what value is owned by the shareholders.
The Balance Sheet can be used to uncover the value of the company, the debt load, and cash position.

Earnings Statement

Also called the Income Statement or Profit and Loss Statement, it shows how much revenue a company received during the year from the sale of its products and services, and the expenses the company incurred due to wages, taxes, operating costs, etc... The difference between the two is the company's profit or loss for the year. The amount left over after taxes is the net earnings.

Net earnings are basically saying how much money the company 'really' made over the course of the year. Some companies can have low earnings if they used much of their money for research and development, to acquire other companies, fuel aggressive growth, move into new markets, etc, which is much more favorable than if the company had low earnings because they didn't generate many revenues, their expenses were too high, etc...

Statements of Changes in Financial Position

This shows how the company's financial position changed from one year to the next. Also called the cash flow statement, this details how the company generated and spent its cash during the year.
This statement can be used in evaluating the liquidity and solvency of a company, and to assess the ability of that company to generate cash internally, to repay debts, to reinvest in itself, etc...

Sources of Financial Reports

Certainly you can get financials from the companies themselves. Most will gladly fax them to you, or mail you their latest quarterly and annual reports.

However, a faster way to access the information can be by Internet. For example, go to and choose stock quotes. Enter the ticker symbol for the company you are interested in, and Yahoo will provide its most recent press releases, which will include past quarterly and annual reports with the financial statements. You can also check the previous reports to compare which direction the company is moving in and look for trends (i.e. increasing debt load, unpredictable earnings, decreasing revenues, erratic revenues, etc...).

There are also many other Internet resources which provide similar information, such as,, ( for Canadian issues), etc...

Comparison Shopping

To familiarize yourself with some of the numbers, try looking up the financials of three companies you own or are interested in.

(Balance Sheet) Which of the companies has the greatest long term debt load? Do any of the companies have greater current liabilities than current assets? Compare the current share price to the shareholder's equity (book value): is the share price much greater or less than the book value?

(Earnings Statement) What were the revenues of the most recent year (or quarter) and does the number represent an increase or decrease from the previous period? How much money per share did the company earn (or lose) in the most recent period?

(Statement of Changes in Financial Position) Has company debt been increasing or decreasing? What was the greatest expense the company incurred according to the statement?

Decision Making

Understand that financial statements can provide investors with a partial fundamental snapshot of a company. They only represent one piece of the puzzle. Remember that, while financial statements can help investors compare several companies, comparison is limited only to the numbers provided.

In other words, you can see that one company made money while the other lost money, but you don't know which has the better technical outlook (based on analysis of the trading chart), which is a potential takeover target, which will have the best future earnings, etc...

As well, the impact of financial statements tends to be long-term as it relates to share prices. Four quarterly reports showing increasing earnings may push the stock into an upward trend as the market begins to recognize the fundamental improvements of the underlying company, but one quarter of increasing earnings may or may not have a significant impact on shares.

Therefore, most investors use financial statements as part of a greater overall decision making process. Certainly, though, an understanding of and familiarization with the data can benefit any investor who takes the time to make educated trading decisions.

Important Points

Many growth companies don't need nor are expected to have positive earnings. Instead, they generally accumulate debt as they focus on research and development of new technologies, aggressively move into new markets, fight for market share with competitors, etc... Other companies with minimal growth prospects on the other hand, have more importance placed on actual earnings, lowering operational costs, etc...

Be sure to understand what numbers are important and unimportant to a specific company based on their situation and the position they are in. This can be done easily by going to and doing an industry comparison on the company in question. Do companies in the same industry seem to have positive earnings, or is the focus on growth, research, etc... Are they a larger or smaller company than the industry average, and are they growing faster than the others?
Read the fine print to make sure the numbers you are reading have been audited, rather than being just company estimates, or unverified results. This generally is not something you need to worry about with most exchange-listed companies, but it is important practice.

Many annual statements will begin with positive news about sales or revenue increases, or other positive comments, but further reading reveals that the company actually lost more money, increased debt, or had a poor quarter or year. For most companies their financial statements are part of their promotional material and they need to make the information sound as impressive and positive as possible, even if the overall results were disappointing.
Be wary of one-time earnings or loses. For example, a company may win a huge lawsuit settlement and the influx of money gives them positive earnings for the quarter. However, how would they have done when the one-time extraordinary is ignored?

Peter Leeds, one of North America's leading Investment Coaches, is a self-made millionaire who has created his fortunes on the stock markets. He has also empowered thousands of individuals to do the same. He offers sites like
to help penny stock investors make wise decisions.

Employee Retention: It's A Changing Game

September 14th, 2005
by Mike Beitler

As a management consultant, I have seen some poorly conceived retention policies at otherwise well-run companies. The philosophies underlying these policies lack some basic knowledge of two things:

1. human nature, and

2. the changing world around us

Human Nature

Let's start with human nature. The practice of management requires an understanding of how people work. Successful managers can be forgiven if they do not know how a particular machine works, or how to debit and credit the general ledger, or how to write HTML code. But, managers must know how people work. Specifically, they need to know how people work well.

People are motivated by goals. their own! Organizations that help individuals achieve their goals and career aspirations have less trouble with retention. Are you helping your best employees achieve their goals?

I recently read some research findings that were just plain silly. The findings you ask: Workers leave organizations for two reasons:

1. they feel mistreated or unappreciated

2. they can get more money/compensation from another organization

The researchers went on to say, most workers are unaware of more money at other organizations until they feel mistreated or unappreciated. Did you catch that? If not, re-read the "two" findings.

Here's my interpretation: If you treat your workers well and make them feel appreciated they will stay with your organization; money is not the primary driver for workers leaving. Help you workers achieve their goals. I believe "appreciative" workers are more motivated than "happy" workers.

Before you think this is more "soft" management talk, let's look at some "hard" facts. The average cost of hiring a new worker is one-and-a-half times the worker's annual salary. And, the average worker will need a year to master his/her job skills.

The Changing World Around Us

As the world changes around us, we must change the way we think about retention (and everything else). Gone are the days of the homogeneous workforce. The world is being changed by unstoppable trends: globalization and an aging workforce.

Future work teams will include three generations of workers (a 23-year-old worker, a 48-year-old worker, and a 73-year-old worker), workers with different religions and nationalities, and workers with dramatically different life experiences.

The brain drain in developed countries can be slowed by retaining older, highly skilled workers. But, that is not nearly enough. Companies must compete globally for talent. (And remember what is necessary to retain these individuals. We must understand their individual goals and career aspirations.)

American companies that hope to depend on American talent exclusively will fail miserably. American knowledge workers are losing their competitive edge. Let's look at some more "hard" facts:

1. In China, 42% of students earn undergraduate degrees in science or engineering. In the U.S., the figure is less than 5%.

2. Only 70% of U.S. high school students graduate. The U.S. public education system was recently ridiculed by a British news journal. When you consider that the British public school system is arguably the worst in Europe, Americans should hear this as a wake-up call.

3. Only 32% of U.S. students leaving high school qualify to attend a four-year college or university.

Add to this some alarming facts about off-shoring. One organization recently said it was off-shoring jobs to India not simply because the cost was lower, but because the quality of work was better. The off-shoring of high-level professional jobs (such as engineering and IT) is now a common practice.


Organizations must do two critical things:

1. develop retention policies that recognize the need to understand the individual workers' goals and career aspirations, and

2. learn how to recruit and develop talent from around the world.

These are big changes for most organizations. Is your organization ready for these changes?

Dr. Mike Beitler is the author of "Strategic Organizational Change." Get a free 7-part mini-course and learn more about the book at

How Could Increased Credibility Help You Grow Your Business?

August 29th, 2005
by Laura Orsini
In What Subject Are You An Expert?

If you're a small business owner, presumably you are an expert in your industry or profession - or you would not be in that industry or profession.

Expertise does not mean being the best in the world at something - like Lance Armstrong or Bill Gates. Can you imagine being ranked #1 IN THE WORLD at a particular skill or talent?? It sure would be nice - but it doesn't happen for most of us. And yet many more of us are experts than we may realize.

With more than 6 billion people in the world, good thing it's utterly unnecessary to be the best in the world at something to qualify as an expert. All expert means is that you know your subject BETTER THAN MOST people. American Heritage Dictionary defines an expert as "a person with a high degree of skill in or knowledge of a certain subject." Given those more relaxed standards, chances are pretty good you know a great deal about at least one particular subject, meaning that you are an expert in some area.

So you've given it some thought and have acknowledged that you really are very good at something. Canvas pool covers. History of birdhouses in America. Ways to help college freshmen succeed. The subjects are limitless - but you ARE an expert at one of them.

Question: What are you doing with that knowledge and expertise? If "using it to build credibility in my area of specialization" is not your answer, it should be!

Why Credibility?

Simple. Credibility is the thing that makes people respect you as an expert. It's the thing that gives you an edge because it causes people to seek you out for your knowledge. Credibility means the quality of being logically or apparently valid. And with credibility comes authenticity, believability, genuineness, legitimacy, visibility, trust, plausibility, reputation, and word of mouth.

Are those qualities helpful in building a successful business? You'd better believe they are!

Benefits Of Creating Credibility For Yourself / Your Business

Perception of Trust - Credibility creates an implied trust that decreases your need to work as hard to prove yourself. People trust you if you have credibility.

Knowledge Showcase - Credibility allows you to share useful and/or entertaining information about your area of specialization that draws added attention to you/your business but is not confused with advertising.

Implied Quality - Credibility carries with it an assumption of due diligence. For example, if Oprah recommends a book, do people bother to read other reviews or do they run out and buy the book? Deserved or not, Oprah's opinion carries some of the highest credibility in the world.

Increased Exposure - Credibility enables you to reach potential customers who fall beyond the reach of your traditional marketing efforts.

Improved Recall & Recognition - Credibility reduces your audience's resistance to your marketing message. With traditional advertising, a customer must hear your message as many as 21 times before they recognize your message as your message, remember the contents of your message, and are moved to take action.

Heightened Demand - The more credibility you have, the more likely someone is to want to pay for your product or service.

Brighter Visibility - The more your credibility increases, the more likely people are to seek you out to suggest joint ventures and other opportunities.

How Can You Build Expert Credibility?

There are many ways to increase your credibility, some of them more instant in nature, while others require a more plodding, long-term effort.

Get interviewed by the mass media. PRO: Provides immediate visibility. CON: Is inordinately difficult to accomplish. KEY: The old 80/20 rule - put the large majority of your efforts into more realistic goals, but never neglect the attempt for widespread coverage entirely.

Contribute to mass media publications. PRO: Offers virtually instant credibility. CON: This market is neither specialized nor particularly focused on your industry. KEY: Regular appearances, like a featured column.

Get interviewed by or contribute to niche media outlets. PRO: Is easier to achieve than national exposure. CON: Offers less exposure than national outlets. KEY: Write or speak as THE expert in your field.

Get a blog. PROS: Easy to do, very inexpensive, and most blog providers have syndication technology built right in. CONS: Everybody's doing it, and just because you write does not mean anyone will read. KEYS: Write more than one blog on hyper-niche topics, cross-link them, and promote them just like you do your Web site.

Try Podcasting. PROS: Almost as easy as blogging, but with audio - once you learn how; new listeners are seeking Podcasts daily. CONS: Finding the resources to learn how to Podcast is still a challenge; attempting to produce a quality show is more difficult than it seems. KEYS: Commit to a niche topic, have fun, and experiment until you find your own unique show format.

Write! Articles, media releases, books, info products, etc. PRO: It's the easiest way to create visibility. CONS: It takes time, effort, and research; may require you to hire an editor. KEYS: Test various markets; develop a system.

The trick to creating expert credibility and its subsequent increased publicity - even notoriety - in your field is to GET OUT THERE! No matter how good you are at what you do, no one's likely to stumble over your genius as you quietly plod away at your desk or in a corner of your shop. You must draw attention to yourself like a beacon. However, with some directed and dedicated effort, you can achieve expert credibility in your industry and race to the forefront of your profession.

Laura Orsini is an editorial consultant, helping small business owners use words to build credibility and enlarge their client bases. For further information regarding a viable alternative to the credibility-building methods mentioned in this article, join Laura and fellow credibility expert Allan Sabo, of Alti Success Strategies, for their next tele-class, "Credibility-Building Secrets Revealed." Visit for dates and times.

Playing With Money - And Making More

August 18th, 2005
Ready to start playing with your money? Not interested in complicated businesses or boring bank C.D.'s? Here are some methods that aren't quite a business because you can do them once, or just when you feel like it. Start small and the risk is small.

Loan Sharking

Years ago a friend got a good job when I loaned him $300 to buy the necessary tools. I charged a $6 per week loan fee (don't call it interest) until he paid in full. That's more than 100% annual interest, and yes, we're still friends. Check the laws in your area if you try this, and take collateral. I don't loanshark any longer, but in my early twenties I loaned as much as $2,000 at a time ($100/month loan fee), and only once was stiffed on a small loan.

Investing In Other's Expertise

John showed me several car magazines before I understood why an old fiberglass car was a good deal at $2,300. What's a Corvette? He convinced me to put up the money, and after a new transmission for $900, he sold the 1976 Corvette for $4,300, netting us $1,000. I took half the profit ($500) for putting up the money for the two weeks.

I've done this many times with friends who know cars but don't have cash. Incidentally, if I had paid a $50 cash advance fee and 18% interest to raise the money with a credit card, my profit would still have been over $400, and John did all the work. I love playing with money. Do you have any friends who know about boats?

Buying Estates

My wife and I met a couple who buy out estates, sell some of it at flea markets, then run the rest through auctions. They've made a living at this for years. After negotiating to buy a whole house full of stuff, thay load up their trailer. If they don't want to do the flea market thing, they auction everything on Sunday afternoon for a nice profit.

If you're a good judge of value and have an auction nearby, you could also do this with rummage sales. Offer $100 for everything, then auction it off piece-by-piece. An auction near us lets anyone in, with no fee to enter - just a 25% commission on anything sold.

Playing With The Casino's Money

When I worked the roulette wheel at a casino I saw many people foolishly writing down the numbers that came up. Their theories were mostly nonsense. Casinos welcome these players and even hand them the pen and paper.

One man, however, was actually scientific about it. He found a bias in the wheel, after "charting" it for more than 5,000 spins. A number pays 35 to 1, but one of the numbers, due to manufacturing imperfections or whatever, was appearing 1 in 27 spins, instead of the average 1 in 38 spins.

He bet $10 a spin, and he profited $80 for every 27 spins of the wheel in the long run, or about $100 per hour. Since the ups and downs are dramatic, this is not for the faint-hearted. Even though he made tens of thousands, I saw him lose as much as $700 in a night. Remember too that not all wheels have biases (the casino eventually replaced that wheel). Have you ever tried "card counting" in blackjack?...

Steve Gillman has been studying every aspect of money for thirty years. You can find more interesting and useful information on his website;
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