Taxes and accounting done with your CPA using live internet streaming rather than physical office meetings

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Tax planning season is underway. Remember… after December 31st, there is very little an individual or business can do to change their tax situation at that point. It is those precious few months of October, November and December where your CPA can truly help clients plan and prepare for their current year taxes!

I am always looking for new clients. Everything I do now is cloud based. I am looking for individual and small business clients that would enjoy working with their CPA using virtual technology. For example, I provide bookkeeping, financial statements, monthly consultations, QuickBooks training, and tax preparation… but it is ALL done via the internet and/or telephone. I do all of my meetings using programs like GoToMeeting and Skype.

My tax appointments are done the same way where clients securely upload their documents (using my cloud-based server, fax, or email) and then I prepare their returns WITH them over the phone and/or using online interactive meetings. This means they don’t have to leave their office or their homes and they still receive the same personalized services one-on-one with their CPA!

Michele Robbins, CPA
Cloud CPA Services, LLC
410-490-6507 or 888-CPA-0707

Taxing the Rich, Paying the Poor – Just this CPA’s opinion (probably not what you would expect)

Flag of the United States of America

Flag of the United States of America (Photo credit: Wikipedia)

America is based on our freedom to express ourselves and our opinions (at least for now… hehehe). The following is nothing more than MY opinion. I’m sure there are MANY that will agree, disagree, and fall somewhere in between. I love a good healthy debate (without personal attacks, please) so if you would like to add your own comments, I promise to post them wholeheartedly as long as there is not cursing, racism, or personal attacks. (Sorry.. my blog, my freedom of choice – but I promise to be completely unbiased on any comments otherwise) – Girl Scouts Honor.In my opinion, TAXING THE RICH is like penalizing the people in our country for making something of themselves – while rewarding many (not all) that do not. I believe our country was founded upon the ability to make choices and if we choose to work hard, we have the opportunity to become as successful as we want. In our country, there are no limits (or there isn’t supposed to be) on what we can do. Instead however, we are moving more and more toward a society that rewards those that do not work hard, that do not have the motivations of our forefathers, and often (not always) take advantage of the already excessive social programs we now have in place. First, let’s discuss taxes, then just a quick point on the other social programs I am mentioning here.

Taxing the RICH more and the POOR less is a very popular topic right now (and actually has been since our complicated tax laws and social programs really took off after the Great Depression). For simplicity, let’s compare someone making $300k (most would consider this in the ‘RICH’ category) versus someone making 20k (some would consider this in the ‘POOR’ category) per year.  Now suppose instead of this complicated tax law that we currently have, that each paid 10% of their gross income (not net income, no more loopholes, etc.) in TAXES. This is NOT taxing the ‘RICH’ MORE, correct? Even so, the ‘RICH’ person would pay $30,000 in taxes compared to $3,000 from the ‘POOR’ person. See? The ‘RICH’ would already be (and in our current system already IS paying) MORE TAXES.

Taxes

Taxes (Photo credit: Tax Credits)

In my opinion, our system is already unfair in increasing tax rates based upon your income. WHY should someone who works hard and is successful pay 30% compared to 5% or 0%. Don’t we all live in the same society with basically the same opportunities? Every single person in this country could start their own business or any child can go to college if it were their choice. I was very poor growing up (although my mother never let me realize that because of her love and rearing of me)… and I simply got student loans and went to college and have started numerous businesses. More importantly, I was given nothing by my parents (other than love and encouragement) and certainly nothing by our government to do this. It was my choice. Others have the same choice – why should either be penalized or rewarded because of their choices in a country that is supposed to be about freedom of choice?

On the other side (to be fair), I will say that the ‘RICH’ perhaps have the money to pay CPAs (or Tax Gurus) to find loopholes for tax avoidance where the ‘POOR’ do not have that luxury. This is a valid point and unfair truth based on our current tax system that I admit wholeheartedly. We all know that Big Corporations, Banks, Politician, etc., do exactly this and often pay NO tax whatsoever.  The only fair solution to me is to completely re-vamp our tax system altogether.

I would absolutely LOVE to see a FLAT TAX based on gross income (not net income, not after various loopholes, mind you) for everyone. GASP!!!  I say this and I am a CPA myself? Yes… because I would much rather spend my time on helping my clients grow their business, plan their future, train them on accounting, and reach their goals (i.e., counseling) than  I would working our complicated tax laws to ensure they take this deductions, get that credit, use this exemption, etc.  I know my clients would love it as well. Who likes dealing with taxes anyway, especially with our 5000 pages of tax law that comprise our current system!

The other point people often make is that the ‘RICH’ still only pay 2% of all taxes in our country while the ‘POOR’ pay the remaining 98%.  Okay… but that is misleading! If instead you look at it based on the individual instead of the group, almost every individual in the ‘RICH’ category already pays WAY more than any individual in the ‘POOR’ category – and this includes our gradual step-up of tax rates relative to income rising. The whole statement  is misleading because those in the ‘RICH’ group only make up a small percentage of our society – so of course OVERALL they pay less (as a group) than all the rest of our country’s population.

The problem with all of this lies in our POLITICAL system, of course. All of the special interest groups have their hands out influencing our politicians. In order for the politician to gain support and money for their campaigns to be elected (or re-elected) they have no choice but to pick certain groups, follow the crowd, and do what is in that group’s best interest, rather than the PEOPLE. It’s called bribery and it is thought of as simply normal in our society. I think our forefathers would shoot us all if they saw what we’ve done to our country in this area.

On a personal note – I am not a staunch follower of any particular political party for those very reasons. There are valid issues and points that I believe strongly in on both sides.  Ultimately I suppose I would be considered a Libertarian or Independent because my VERY strongest belief overall is that the government should STAY OUT of our personal lives and making laws that should be individual choices. Period. Period. Period. We are not a socialist, communist, or dictator-lead country. We are supposed to a country that enables its people to make their own choices, follow their own free will, and enjoy the land of opportunity.  I believe strongly the main purpose of government is to do the following and THIS is what our taxes should be spent upon before ANY solitary other thing:

1)      Protect OUR PEOPLE here in this country – protection for us in our streets domestically and certainly internationally, but only when it is clearly warranted. I understand humanitarian efforts are needed in other countries, but until we get our own country in order we simply need to help all those here first. It’s sad, but it is necessary. There are people starving in our own country – and yet we spend $5 million on grass boats in some other country? Really? This is a Republican view, until I stated that I disagree in going abroad. A Libertarian view is one that believes we need to take care of ourselves. Selfish? Perhaps. But we should be helping one another HERE in our country, not just ourselves as a person. If we do that, then perhaps we can use our extra resources to help others abroad. Until then, we need help here now… RIGHT NOW.

2)      Take care of our Children, our Elderly and our Disabled. This is more of a Democratic viewpoint, but it is absolutely critical and even a Libertarian would agree that each community (or State) should take care of its own people (rather than having the Federal government do this. The way to the means does NOT matter to me honestly  – but spending $3 million dollars to save the whales when our children, elderly, and disabled are homeless, starving, or worse in incomprehensible to me.

3)      Provide Healthcare to All American Citizens.  If there is one thing I strongly believe on the democratic side of viewpoints it is this. It is an absolute abomination that our Citizens (not illegal aliens – I’m not going to even touch that topic in this post) do not have healthcare. I’m not talking about affordable healthcare – I’m talking about pure healthcare for every single person in our country – regardless of their status, income, ethnicity, etc. I do not agree with private insurance at all. The wealthiest can afford the best care while the poorest receive nothing. I know… this is the opposite of my view on the tax system – but my reasons here are moral and ethical. Having good health is NOT a choice and an opportunity that everyone in our country currently has (which is different than becoming successful in our country and being penalized or rewarded for it by the tax rate you pay). This issue hits directly to my heart in these days as my mother is currently not cared for by any health program. She worked all her life, but was laid off several years ago. Shortly thereafter she was diagnosed with kidney cancer and needed surgery – but had not insurance or governmental assistance. The ONLY thing she had from her entire life of working was a small (very, very small) IRA left to live on, and her home that she had worked to finally pay off. In order to receive Medicaid, the government will insist on putting liens on that home. In order to have payment arrangements with the hospital (which we felt fortunate to have found one that would even do this), every bit of that small IRA will need to be exhausted. The question is… Where will she live and how will she eat once they take this from her?  The infuriating part (other than this being caused by the Camp Lejeune Marine Base Water Contamination – which I have posted on before) is that had she actually done NOTHING responsible such as saving to own her home and putting a little money away for her retirement… HAD SHE DONE THAT INSTEAD, she would have Carte Blanche and all the state and federal help she needs to for her healthcare. But because she worked and was responsible, she receives NOTHING. Really?!?! Darn, had she only taken advantage of the system, spent all her money, never saved a dime, she could get on welfare, Medicaid, and have her local state grant programs. Hmmm… what are we teaching our citizens here, folks?

4)      Education for our Children – If our tax dollars are spent on anything, our children’s education needs to be included. Again this is a democratic viewpoint I suppose, but they are our future and without providing them this, our country’s entire future could be at risk. There is no excuse for a country like ours to not educate our children beyond the low state standards that our set. This goes hand in hand with paying our teachers a fair salary (as well as holding them accountable for their performance) and teaching our children about the opportunities for higher education, college loans, and the opportunities available to them – regardless of where they come from and to teach them that saying the ‘cycle of poverty, bad education, and crime’ is no longer true – it truly is a choice in this day and age.

In my opinion, other than the main issues mentioned above, I think just about every other social program should disappear, except under extreme circumstances that are reviewed and approved on a case by case basis.

  • Welfare is the most widely abused social program I know of.  If it didn’t exist people WOULD get jobs, even if it meant finding jobs where childcare is provided or childcare swapping groups would be formed.  Again there are extreme cases, but they should be reviewed case-by-case and approved only when absolutely necessary for a limited time while the person is being taught how to get back on track.
  • Unemployment is also abused. Although certainly needed by so many today, it is ABUSED by 80% of its recipients and the people who pay for this program are those that pay taxes (i.e., those that are working). How can someone be on unemployment for 18 months (now reduced to six months recently) and still own luxurious assets and go on vacation? Is anyone really verifying they are trying to find work? Again, this is another social program that is overly abused and should be monitored much more extensively and provided under certain circumstances and guidelines to be awarded.

Overall, I believe, the Federal government should pretty much STAY OUT of our personal lives. Why do so many groups out there insist on trying to pass laws that are personal and of moral and ethical basis? In my opinion, the government should NOT be able to tell me that guns are illegal, that marijuana is illegal (although I personally wouldn’t smoke it if you paid me to), and that religion is not allowed in schools, that abortion is legal or illegal. These are all personal choices and every time the government tells us or passes a law involving moral and ethical issues, we take one step closer to being a Socialistic society and one step away from living in the Land of the Free.

Thanks to Leslie for inspiring this topic this morning. Although her views on this are different from mine, I love that even more – because in our country, we do have freedom of speech (at least for now).

Extension to pay vs Extension to file

Taxes

Taxes (Photo credit: Tax Credits)

Individual income tax returns are due on April 17, 2012 (tomorrow). If you need to file an extension to file your tax returns, you can do so by completing Form 4868 http://www.irs.gov/pub/irs-pdf/f4868.pdf – or online at any free third-party IRS approved vendor site http://apps.irs.gov/app/freeFile/jsp/index.jsp?ck. This is an extension to file your income tax returns… it is NOT an extension to PAY your income tax returns.

The IRS announced last month it’s Fresh Start initiative program. One part of this program offers relief to certain taxpayers in PAYING their taxes.  To be eligible for this, you must have either 1) been unemployed for at least 30 days in 2011 and/or through April 15, 2012.. OR 2) been self-employed and had a 25% decrease in revenue (relative to 2010) due to the economic downturn. If you fall into one of these categories you can file Form 1127-A http://www.irs.gov/pub/irs-pdf/f1127a.pdf to request a six month extension to pay your taxes (only eligible if owing under $50k in taxes). As long as your taxes are paid by October 15, 2012 this program gives the taxpayer an extension to pay their taxes without the 5% per month late filing penalty. Interest charges will still apply.

Remember, if you also need an extension to FILE your taxes, make sure your Form 4868 is also sent in by April 17, 2010.

Important IRS Regulations and Compliance Changes for Tax Year 2011 – Ask Intuit

Important IRS Regulations and Compliance Changes for Tax Year 2011 – Ask Intuit.

Important information for tax preparers and firms.

Tax question regarding deductions on Form1098 vs HUD1 Settlement Statement when selling residence

Elizabeth asks question regarding deductions listed on Form 1098 vs. Settlement Statement HUD1:

 

 “My brother and sister in law bought and sold a house in October…..only one real estate tax payment is on the 1098’s…..but I know you can read the settlement papers and sometimes those items like PMI are on there instead….the problem is I can’t understand it because it looks both the seller and buyer paid taxes there…..I don’t want to miss a deduction for them and I’m done the entire return except for that.”

 

Elizabeth, if your only question is regarding the taxes, you should go to Maryland property tax assessments at http://sdatcert3.resiusa.org/rp_rewrite/ . Type in the county and the street address. It will pull up the full amount of taxes for the year on the property. If the seller’s side of the HUD1 shows their portion, you can simply deduct the full annual amount from what the seller paid on the HUD1 to determine your brother’s portion of the deduction.  Real estate taxes in Maryland are paid semi-annually so it is very possible that they both paid a portion of the taxes.

 

Otherwise, if you want me to peek at it, let me know and I’ll take a look. I would need to see the Form 1098 and the HUD1 Settlement Statements. Usually the 1098 picks up the interest that is included on the Settlement Statement…. But there have many cases where they miss a small portion (especially if the bank sells the loan during the year). If you want me to look you can fax it, scan it, email it, or we could even Skype it or scan a pic of the docs with your phone. I also have a secure document server you can upload to online.

 

I have a great cheat sheet I will send to you. It has a sample HUD1 and on each column I have written in what is considered BASIS (for when they sell the property) and what is an EXPENSE that can be written off in the year of the sale. Unfortunately, it’s an old paper copy and not with me while I’m out of town.

 

Let me know if I can help further!

 

Michele

 

CPA offering no-gimmick, completely free online answers to your questions relating to tax, accounting, business growth, and entrepreneurship. This is the KEY to growing your own business as well – so even if you don’t have a question, listen up anyway, folks!

Years ago (in the year 2000, I believe) I created a website that allowed people to ask CPA questions online. I charged (if I remember correctly) $9.95 for simple personal questions, $19.95 for basic business questions, and then each category or complexity increasing from there forward, increased the price accordingly. It wasn’t a bad idea and I had a GREAT domain for it (CPAquestion.com – which I now wish I would have at least kept that domain ownership – ah, but we all love hindsight).

Back then, I had no idea how to get people to come to that website, so I went to bulletin boards and basically spammed or used PUSH-marketing to drive people to the site.  It worked ‘fairly’ well (THEN), but I couldn’t get enough exposure to actually make a living, so in the end, I dropped the idea.

If I knew then what I know now I would probably have made it a huge success, at least for a while.

 That idea wouldn’t work very well today. And my method of getting clients to my site would have really failed.

  • The entire marketing and branding demand has changed – and now consumers, clients, and the public are in control of what they see, what they want, and how they want it.
  • The traditional media and government are no longer in control of what consumers and citizens see and discover.
  • It is a NEW ERA – and companies that don’t realize this quickly, will continue to lose money on advertising the old way.

Push marketing, spamming, direct mail, radio, print advertising, yellow pages, television, etc. – IS OUT. Did you hear me? It is GONE.

There is only one way that companies that do not already have nationwide brand recognition will be ‘heard’ going forward, and there are three main things to remember in using it for it to actually work and be effective:

SOCIAL MEDIA is the only avenue where companies will be heard and followed to build their company brand and grow from this point forward.

That’s a bold statement, I know – but the facts show it to be true.

Studies show that by the year 2020, over 75% of businesses will be run by people who are TODAY between the ages of 18 and 30. Think about that. How do these ‘Gen Y’ individuals communicate now?

  • They rarely even use their mobile phones for voice. They use text messaging instead – for personal communication certainly, but now even for business.
  • They will Google something quickly on their laptop or mobile phone, without ever thinking of picking up a Yellow Pages book.
  • They fast-forward right through those television ads and they switch channels on the radio as soon a commercial comes on air. (In fact most have 10,000 songs on their iPod or listen to commercial free websites such as Pandora).
  • Newspapers are now online, and if there is a topic of interest, it can be found at the click of a button on their phone or computer.

The point is THINGS HAVE CHANGED and social media is just about the only avenue a company has to have their message ‘heard’ now and especially in the coming years.

But be careful, simply signing up for multiple social media accounts (Facebook, Twitter, LinkedIn, Tumblr, Foursquare, Pinterest, etc.) is NOT going to work if you don’t have PASSION for what you are doing along with the following three things:

1)      GOOD CONTENT – If you simply blast on your social pages (or worse, others posts) what you do, and how you do it… you will FAIL in addition to making others annoyed or angry.  People can spot SPAM or push-advertising so quickly now, it’s meaningless to try that angle. Instead, people want good content that helps THEM. And they want it for FREE. If you can provide good, helpful content in your genre of business, you need NOT ever insert advertising information about your company, other than perhaps your signature line. If people need or want what you do, and you are providing good content that helps them, they will be attracted to you and/or your business anyway. This is not expensive… but it will be time-consuming.

2)      ADAPTING TO SOCIAL MEDIA TOOLS AND APPLICATIONS – What is hip and popular today will certainly be different by this time next year. You must understand what these Social Media accounts actually do and you must use them effectively. Pinterest is not the same type of tool as LinkedIn or Twitter.  You must study each tool, each application, and use them ALL. It’s not difficult individually, nor is it expensive, but again, it is time-consuming and it changes constantly.

3)      MAKE IT PERSONAL – This is the final key to building business using social media. Answer EVERY question or comment – and make it about helping them, not selling them on your product.  Social media is not personal, unless you make it personal. If you provide good content, and a client follows you because you’ve used the right tool or application to be ‘heard’… but then you don’t have that immediate response or interaction with them, they will probably click the mouse to the next article, blog, tweet, or photo. Again… this is not expensive, but absolutely necessary and time-consuming.

 

I no longer own the domain CPAquestion.com – but I do have a blog, a Facebook page, a Twitter account, a LinkedIn account, etc. (see all the lovely links below) – and I study each day learning these and other social media tools.

The purpose of all this is to simply to help businesses grow, which is my passion.

  • Gaining new tax or accounting clients has been the fortunate result (and can be for you too!) but it is an indirect result of effectively using social media to help others, without asking for their business.

This is the key to the future of business marketing. 

And so, because I am a CPA and a motivated entrepreneur, I would love to hear from you if you have a question or comment or topic relating to helping businesses grow and/or accounting & tax. There is no charge, no catch, no follow-up spam, or gimmick. I only want to provide good, free content relating to accounting, tax, or business growth – which is my passion.

If you don’t have social media account, feel free to email me directly at michele@cloudcpaservices.com. If your comment or question will help others, I will share it (removing any confidential information) so others can benefit. If it isn’t something that will benefit others, that is perfectly fine also!  I will still respond, and help in any way that I can. Some of my social accounts are below, if you have a preference for your question or comment or topic.

Michele Robbins, CPA

Email: Michele@cloudcpaservices.com

Facebook: www.facebook.com/cparobbins

Blog: www.cloudcpaservices.wordpress.com

Twitter: www.twitter.com/cparobbins (@cparobbins)

LinkedIn Profile: http://www.linkedin.com/pub/michele-robbins-cpa/19/756/11

Pinterest Profile: www.pinterest.com/cparobbins

Tumblr Account: www.tumblr.com/cloudcpaservices