What is Goods and Services Tax?
The Goods and Services Tax (GST) is a tax we have to pay every time we buy goods or services. In this system, the consumer pays the final tax but an efficient input tax credit system ensures that there is no cascading of taxes — tax on tax paid on inputs that go into manufacture of goods. Put simply, GST is levied only on the value-added at every stage of production. The price of any input going into production will have a cost and a tax component. The system ensure that when the final tax is calculated, the tax paid on input is taken out and the tax is levied only on the cost of the good produced. It is therefore, also known as value added tax in some countries and trade blocks.
Why is it considered a better system than the current one?
Currently there are a multiple of indirect taxes -- central taxes such as excise duty, service tax, countervailing duty, special additional duty on customs, all cesses and surcharges and state taxes including value added tax(VAT), sales tax, entertainment tax, luxury tax, tax on lottery, betting and gambling, entry tax and state cesses and surcharges. This would cause an effective tax rate to be high and the differences across states fragments the national market along state boundaries. GST will replace all these taxes with a simple levy, lowering effective tax on goods and creating a national market in goods and services.
What is the GST model India plans to adopt?
Most countries have a unified GST system. India, however, has opted for a dual GST system prevalent in Brazil and Canada. Under the dual GST model, both the centre and states, have the right to levy and collect tax on the sale of goods. Consultations are on between the centre and the state government through the empowered committee of state finance ministers to finalize the detailed structural framework of the tax.
What will be the GST rate?
There is no decision yet on the rate structure of GST. A task force set up by the Thirteenth Finance Commission that gave its report recently recommended a rate of 12%. States, however, have said they will not settle for a rate less than 15%. Internal studies carried out by the centre and various states point to rate of 14-16%. At present, the talks have veered around to the view that there should be two slabs-- one lower or floor rate for essential items and another higher or effective rate for most items. There will also be an exempted list of items and a lower rate of 1% for precious metals such as gold, platinum, silver.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com.
Thursday, December 31, 2009
Wednesday, December 30, 2009
Taxes are on the agenda but no one is talking about them
In the back of every Washington politician's mind is this sobering fact: Unless Congress acts, the temporary tax cuts it passed when George W. Bush was president will expire at the end of next year.
If the Democrats who control Congress do nothing and let the tax rates on the highest income brackets return to their pre-2001 levels, their Republican rivals and many Americans will slam them as tax hikers. If they prevent the legislation from expiring, however, they and any Republicans who support this approach will add $2 trillion to the already-growing federal budget deficit over the next decade. The news media and influential watchdog organizations will slam them for that. The 2001 and 2003 tax reductions are the big gorilla in the room that everyone's ignoring. But by the end of 2010, a year of midterm congressional elections, Congress must address this key economic issue.
"I think the easier course for both sides of the aisle to take is to extend at least most of the Bush tax cuts before you get to the end of 2010," said Diane Lim Rogers, the chief economist for the Concord Coalition, a nonpartisan budget watchdog group.
By passing a temporary extension of temporary tax reductions, the Obama administration and Democrats in Congress can buy time, she said, and the likely outcome is the formation of a study group to examine the kinds of extensive tax revisions that many experts argue are needed.
"There's not enough time to do serious tax reform before the Bush tax cuts expire," Lim Rogers said, adding that lawmakers are likely to be too bruised from the health care battle to pursue significant tax restructuring next year.
President Barack Obama has said that he expects to retain most of the Bush tax reductions, letting them expire only for individuals or couples who earn more than $250,000 annually in taxable income. This would apply to income taxes and to capital gains on investments, making Bush's tax cuts Obama's tax cuts.
Under Obama's plan, high earners no longer would fall into a 35 percent top tax bracket, but into new 36 percent or 39.6 percent brackets. Capital gains taxes would rise from the current 15 percent to 20 percent for long-term investments, and up to 39.6 percent for gains from short-term investments.
Businesses would like an early signal from lawmakers and the administration about what might happen, but they're not expecting one.
"That would be the best thing to do, but they're not going to do that. They've got way too much on their plate," said Martin Regalia, the chief economist for the U.S. Chamber of Commerce. "They will talk about tax reform, but I don't see them getting around to doing tax reform in an election year. They'd have to do it before March."
As part of the economic recovery efforts, Obama created a panel to look into ways that tax restructuring could boost the economy. However, the panel failed to issue a planned report in December, Lim Rogers said, and was given very little room to work. It was prevented from recommending tax increases for individuals or couples who earn less than $250,000 annually.
"There's not a very meaningful goal for that advisory panel," she said, expecting lawmakers to begin looking at a more fundamental revamp of the tax system in 2011.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com I will try wo reply within 24-48 hours of receipt.
If the Democrats who control Congress do nothing and let the tax rates on the highest income brackets return to their pre-2001 levels, their Republican rivals and many Americans will slam them as tax hikers. If they prevent the legislation from expiring, however, they and any Republicans who support this approach will add $2 trillion to the already-growing federal budget deficit over the next decade. The news media and influential watchdog organizations will slam them for that. The 2001 and 2003 tax reductions are the big gorilla in the room that everyone's ignoring. But by the end of 2010, a year of midterm congressional elections, Congress must address this key economic issue.
"I think the easier course for both sides of the aisle to take is to extend at least most of the Bush tax cuts before you get to the end of 2010," said Diane Lim Rogers, the chief economist for the Concord Coalition, a nonpartisan budget watchdog group.
By passing a temporary extension of temporary tax reductions, the Obama administration and Democrats in Congress can buy time, she said, and the likely outcome is the formation of a study group to examine the kinds of extensive tax revisions that many experts argue are needed.
"There's not enough time to do serious tax reform before the Bush tax cuts expire," Lim Rogers said, adding that lawmakers are likely to be too bruised from the health care battle to pursue significant tax restructuring next year.
President Barack Obama has said that he expects to retain most of the Bush tax reductions, letting them expire only for individuals or couples who earn more than $250,000 annually in taxable income. This would apply to income taxes and to capital gains on investments, making Bush's tax cuts Obama's tax cuts.
Under Obama's plan, high earners no longer would fall into a 35 percent top tax bracket, but into new 36 percent or 39.6 percent brackets. Capital gains taxes would rise from the current 15 percent to 20 percent for long-term investments, and up to 39.6 percent for gains from short-term investments.
Businesses would like an early signal from lawmakers and the administration about what might happen, but they're not expecting one.
"That would be the best thing to do, but they're not going to do that. They've got way too much on their plate," said Martin Regalia, the chief economist for the U.S. Chamber of Commerce. "They will talk about tax reform, but I don't see them getting around to doing tax reform in an election year. They'd have to do it before March."
As part of the economic recovery efforts, Obama created a panel to look into ways that tax restructuring could boost the economy. However, the panel failed to issue a planned report in December, Lim Rogers said, and was given very little room to work. It was prevented from recommending tax increases for individuals or couples who earn less than $250,000 annually.
"There's not a very meaningful goal for that advisory panel," she said, expecting lawmakers to begin looking at a more fundamental revamp of the tax system in 2011.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com I will try wo reply within 24-48 hours of receipt.
Tuesday, December 15, 2009
New to Networking No problem
New To Networking? No Problem
Build your networking skills--one step at a time.
By Ivan Misner | November 30, 2009
Print ShareThis Get the Mag Weekly Updates [-] Text Size [+]
As an entrepreneur, one of your primary goals is to continue to fill your pipeline with new business. One of the most cost-effective ways to do this--particularly for a smaller business--is through networking. Before you can begin to be an effective networker, it's important to identify some of the strengths and skill sets that you bring to the table as a business professional.
•Are you a people person?
•Do you enjoy public speaking?
•What kind of professional background did you have before starting your business?
•How long have you lived in the area where you do business?
•What other natural skills do you have (such as time management, organizational skills or keeping clients focused) that may not fall directly into your business expertise but are valued by people?
One of the biggest roadblocks to networking is the fear that being more of an introvert impedes any successful attempts at networking. In fact, it's a question I get quite frequently: "How do I network if I'm not a naturally outgoing person?"
Go ahead and breathe a sigh of relief, you don't have to become Mr. Man-About-Town, to be a successful networker. Most business people, over time, naturally develop a certain level of comfort from dealings with customers, vendors and others in their day-to-day transactions. So even people who aren't gregarious or outgoing can form meaningful relationships and communicate with a little practice.
Become the host
Over years of teaching people the art of networking we've found many techniques that can make the process markedly easier--especially for those who consider themselves a bit introverted. For example, volunteering to be an ambassador or visitor host for a local business networking event can be a great way to get involved without leaving your comfort-zone.
If you're wondering how being a host can help your introversion just think about it. When you have guests at your house or office, what do you do? You engage them, make them feel comfortable; perhaps offer them something to drink. What you don't do is stand by yourself in the corner thinking about how much you hate meeting new people.
By serving as a visitor host at your local chamber event, you effectively become the host of the party. Try it! You'll find it much easier to meet and talk to new people.
Build your social capital at your desk
If it's taking you a bit longer to get used to face-to-face networking, remember that thanks to technology's continuing advances, you can also network without ever leaving your desk--online networking is a very effective way to connect with potential clients and referral sources.
Computer technology and the growth of the internet has made it easier than ever before to connect with large numbers of people. Online networking gives you broad reach with low cost and effort.
What online networking doesn't do, however, is provide a forum where relationships can deepen. The nature of the medium strips away essential communication cues such as facial expression, tone of voice, and body language. That is why emoticons were invented--to help convey whether one is happy :D, unhappy :(, or joking around ;).
Online networking has an etiquette all its own which some would deem rude. Communications are blunter and less polite, and this often comes across as aggressiveness. It's easy to get "flamed" online-- encounter open hostility that is. In person, social norms still dictate more restraint.
It's usually better to use online networking with people only after you've established a relationship with them by traditional means. To develop trust, respect and true friendship, it's hard to beat in-person conversation and the occasional handshake or pat on the shoulder.
Offer advice to break the ice
So, we're back to the challenge of doing some face-to-face networking and you haven't had much practice at it, or you're not sure how to break the ice. You might want to start by offering some free professional advice.
Let's say you're a real estate agent talking with someone at a networking event who, although not ready to buy a home today, is heading in that direction. You could say something like this:
Well, I know you're not interested in buying a home right now. But when you're ready to start looking, I'd highly recommend checking out the north part of town. A lot of my clients are seeing their homes appreciate in the 10 to 20 percent range, and from what I understand, the city is thinking about building another middle school in that area.
See how it's possible to offer some value-added advice without coming across too sales-y? A statement like this acknowledges that you aren't trying to push them, while still demonstrating your expertise. He will probably remember the conversation when he's ready to act.
This model works for just about anyone in a service-based industry in which knowledge is the main product. If you're a marketing consultant, give your prospects a couple of ideas on how they can increase the exposure of their business. Don't go overboard; maybe share a technique you read in a magazine or tried with one of your clients.
This technique open up a good conversation with the person while you're networking and, if you play your cards right, who do you think they'll go to when they're in need of your kind of service? When it comes to building rapport and trust, few things do it better than solid, helpful information provided out of a genuine concern for the other person.
Become a trusted source for quality referrals and contacts
Another way to ease into networking is to provide a referral or contact. This could be a direct referral (someone you know who's in the market for another person's services) or a solid contact (someone who might be helpful down the road).
Let's say you're networking, and you run into a person who owns a printing shop. You talk for a while, you hit it off, and even though you don't know of anyone who's looking for this person's selection of print services right now, you'd like to help him out. So you say:
Jim, I don't know of anyone who's actively in the market for printing services right now, but I do have someone who I think could be a big help to your business. Her name is Jane Smith, and she's a marketing consultant. I know a lot of her clients need business cards, flyers and things like that printed, and while I don't know if she has a deal on the table right now, I think you both would really hit it off if you got together.
You see how easy that was? You stated right up front you don't know what will come of the contact. But you then followed up by saying you do think this person could help and briefly described how. Chances are this will sound like a good idea to your new contact.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com.
Build your networking skills--one step at a time.
By Ivan Misner | November 30, 2009
Print ShareThis Get the Mag Weekly Updates [-] Text Size [+]
As an entrepreneur, one of your primary goals is to continue to fill your pipeline with new business. One of the most cost-effective ways to do this--particularly for a smaller business--is through networking. Before you can begin to be an effective networker, it's important to identify some of the strengths and skill sets that you bring to the table as a business professional.
•Are you a people person?
•Do you enjoy public speaking?
•What kind of professional background did you have before starting your business?
•How long have you lived in the area where you do business?
•What other natural skills do you have (such as time management, organizational skills or keeping clients focused) that may not fall directly into your business expertise but are valued by people?
One of the biggest roadblocks to networking is the fear that being more of an introvert impedes any successful attempts at networking. In fact, it's a question I get quite frequently: "How do I network if I'm not a naturally outgoing person?"
Go ahead and breathe a sigh of relief, you don't have to become Mr. Man-About-Town, to be a successful networker. Most business people, over time, naturally develop a certain level of comfort from dealings with customers, vendors and others in their day-to-day transactions. So even people who aren't gregarious or outgoing can form meaningful relationships and communicate with a little practice.
Become the host
Over years of teaching people the art of networking we've found many techniques that can make the process markedly easier--especially for those who consider themselves a bit introverted. For example, volunteering to be an ambassador or visitor host for a local business networking event can be a great way to get involved without leaving your comfort-zone.
If you're wondering how being a host can help your introversion just think about it. When you have guests at your house or office, what do you do? You engage them, make them feel comfortable; perhaps offer them something to drink. What you don't do is stand by yourself in the corner thinking about how much you hate meeting new people.
By serving as a visitor host at your local chamber event, you effectively become the host of the party. Try it! You'll find it much easier to meet and talk to new people.
Build your social capital at your desk
If it's taking you a bit longer to get used to face-to-face networking, remember that thanks to technology's continuing advances, you can also network without ever leaving your desk--online networking is a very effective way to connect with potential clients and referral sources.
Computer technology and the growth of the internet has made it easier than ever before to connect with large numbers of people. Online networking gives you broad reach with low cost and effort.
What online networking doesn't do, however, is provide a forum where relationships can deepen. The nature of the medium strips away essential communication cues such as facial expression, tone of voice, and body language. That is why emoticons were invented--to help convey whether one is happy :D, unhappy :(, or joking around ;).
Online networking has an etiquette all its own which some would deem rude. Communications are blunter and less polite, and this often comes across as aggressiveness. It's easy to get "flamed" online-- encounter open hostility that is. In person, social norms still dictate more restraint.
It's usually better to use online networking with people only after you've established a relationship with them by traditional means. To develop trust, respect and true friendship, it's hard to beat in-person conversation and the occasional handshake or pat on the shoulder.
Offer advice to break the ice
So, we're back to the challenge of doing some face-to-face networking and you haven't had much practice at it, or you're not sure how to break the ice. You might want to start by offering some free professional advice.
Let's say you're a real estate agent talking with someone at a networking event who, although not ready to buy a home today, is heading in that direction. You could say something like this:
Well, I know you're not interested in buying a home right now. But when you're ready to start looking, I'd highly recommend checking out the north part of town. A lot of my clients are seeing their homes appreciate in the 10 to 20 percent range, and from what I understand, the city is thinking about building another middle school in that area.
See how it's possible to offer some value-added advice without coming across too sales-y? A statement like this acknowledges that you aren't trying to push them, while still demonstrating your expertise. He will probably remember the conversation when he's ready to act.
This model works for just about anyone in a service-based industry in which knowledge is the main product. If you're a marketing consultant, give your prospects a couple of ideas on how they can increase the exposure of their business. Don't go overboard; maybe share a technique you read in a magazine or tried with one of your clients.
This technique open up a good conversation with the person while you're networking and, if you play your cards right, who do you think they'll go to when they're in need of your kind of service? When it comes to building rapport and trust, few things do it better than solid, helpful information provided out of a genuine concern for the other person.
Become a trusted source for quality referrals and contacts
Another way to ease into networking is to provide a referral or contact. This could be a direct referral (someone you know who's in the market for another person's services) or a solid contact (someone who might be helpful down the road).
Let's say you're networking, and you run into a person who owns a printing shop. You talk for a while, you hit it off, and even though you don't know of anyone who's looking for this person's selection of print services right now, you'd like to help him out. So you say:
Jim, I don't know of anyone who's actively in the market for printing services right now, but I do have someone who I think could be a big help to your business. Her name is Jane Smith, and she's a marketing consultant. I know a lot of her clients need business cards, flyers and things like that printed, and while I don't know if she has a deal on the table right now, I think you both would really hit it off if you got together.
You see how easy that was? You stated right up front you don't know what will come of the contact. But you then followed up by saying you do think this person could help and briefly described how. Chances are this will sound like a good idea to your new contact.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com.
Saturday, December 12, 2009
Obama proposes tax incentive to hire workers
Obama proposes tax incentive to hire workers
By STEPHEN OHLEMACHER (AP) – 4 days ago
WASHINGTON — President Barack Obama on Tuesday proposed a tax incentive for small businesses that add workers, even as Congress struggles to figure out how such an idea would work.
Lawmakers have been working for several months to develop a tax credit for businesses that hire workers, but they have been unable to figure out how to do it in a way that won't be abused.
Neither Obama nor his top advisers offered details Tuesday. They didn't say how big the tax break would be nor how it would be administered. Obama pledged to work on the issue with Congress.
"I believe it's worthwhile to create a tax incentive to encourage small businesses to add and keep employees and I'm going to work with Congress to pass one," Obama said.
Congress is running out of time to pass a jobs package this year, and the process will be even more complicated if the administration doesn't come up with details. Moreover, the Senate is preoccupied with the health care debate, making any action less likely.
Obama's other tax proposals were more familiar to lawmakers. He proposed extensions and enhancements of several tax breaks that were part of the economic stimulus package passed in February, including enhanced tax write-offs for companies that buy new equipment.
Obama also proposed eliminating capital gains taxes on small business stock, if it is purchased in 2010 and held for at least five years, expanding a tax break enacted in the stimulus package.
Majority Democrats in Congress, wary of an unemployment rate that stands at 10 percent as they enter an election year, said they would work with Obama to pass a jobs bill.
Republicans said Democratic efforts to pass a new jobs bill shows the last stimulus package was ineffective.
"We need to give the private sector confidence with permanent, long-term tax relief and immediate steps to rein in our skyrocketing deficits," said Rep. Tom Price of Georgia, chairman of the Republican Study Committee. "Temporary tax relief won't overshadow the long-term concerns of anxious employers."
Some tax experts said it would be difficult to fashion a tax credit that efficiently provides an incentive to small businesses to add workers. Do you offer a tax break for simply increasing payroll, or do companies have to hire more workers? How long must companies keep the workers? How would the requirements be enforced?
"You're trying to subsidize people for doing things they wouldn't otherwise do, but we don't know what they would otherwise do," said Eugene Steuerle, a Treasury Department official in the Reagan administration who is now co-director of the Tax Policy Center, a Washington think tank.
John H. Bishop, an economist and a professor at Cornell University, has helped develop a proposal for a tax credit for companies that increase the amount of their payroll subject to Social Security taxes. Since only the first $108,600 of a worker's pay is subject to Social Security taxes, executives couldn't get the credit by giving themselves big bonuses, he said.
Some companies could get credits simply by raising the pay of existing workers, but that would help the economy, too, Bishop said. Bishop's proposal, modeled after a similar tax credit enacted in the 1970s, has been circulating on Capitol Hill for several months.
"It does exactly what we want," Bishop said. "It focuses on hiring Americans to work now."
Copyright © 2009 The Associated Press. All rights reserved
As always if you have any questions or comments please email me at rondazaragoza@gmail.com.
By STEPHEN OHLEMACHER (AP) – 4 days ago
WASHINGTON — President Barack Obama on Tuesday proposed a tax incentive for small businesses that add workers, even as Congress struggles to figure out how such an idea would work.
Lawmakers have been working for several months to develop a tax credit for businesses that hire workers, but they have been unable to figure out how to do it in a way that won't be abused.
Neither Obama nor his top advisers offered details Tuesday. They didn't say how big the tax break would be nor how it would be administered. Obama pledged to work on the issue with Congress.
"I believe it's worthwhile to create a tax incentive to encourage small businesses to add and keep employees and I'm going to work with Congress to pass one," Obama said.
Congress is running out of time to pass a jobs package this year, and the process will be even more complicated if the administration doesn't come up with details. Moreover, the Senate is preoccupied with the health care debate, making any action less likely.
Obama's other tax proposals were more familiar to lawmakers. He proposed extensions and enhancements of several tax breaks that were part of the economic stimulus package passed in February, including enhanced tax write-offs for companies that buy new equipment.
Obama also proposed eliminating capital gains taxes on small business stock, if it is purchased in 2010 and held for at least five years, expanding a tax break enacted in the stimulus package.
Majority Democrats in Congress, wary of an unemployment rate that stands at 10 percent as they enter an election year, said they would work with Obama to pass a jobs bill.
Republicans said Democratic efforts to pass a new jobs bill shows the last stimulus package was ineffective.
"We need to give the private sector confidence with permanent, long-term tax relief and immediate steps to rein in our skyrocketing deficits," said Rep. Tom Price of Georgia, chairman of the Republican Study Committee. "Temporary tax relief won't overshadow the long-term concerns of anxious employers."
Some tax experts said it would be difficult to fashion a tax credit that efficiently provides an incentive to small businesses to add workers. Do you offer a tax break for simply increasing payroll, or do companies have to hire more workers? How long must companies keep the workers? How would the requirements be enforced?
"You're trying to subsidize people for doing things they wouldn't otherwise do, but we don't know what they would otherwise do," said Eugene Steuerle, a Treasury Department official in the Reagan administration who is now co-director of the Tax Policy Center, a Washington think tank.
John H. Bishop, an economist and a professor at Cornell University, has helped develop a proposal for a tax credit for companies that increase the amount of their payroll subject to Social Security taxes. Since only the first $108,600 of a worker's pay is subject to Social Security taxes, executives couldn't get the credit by giving themselves big bonuses, he said.
Some companies could get credits simply by raising the pay of existing workers, but that would help the economy, too, Bishop said. Bishop's proposal, modeled after a similar tax credit enacted in the 1970s, has been circulating on Capitol Hill for several months.
"It does exactly what we want," Bishop said. "It focuses on hiring Americans to work now."
Copyright © 2009 The Associated Press. All rights reserved
As always if you have any questions or comments please email me at rondazaragoza@gmail.com.
Monday, December 7, 2009
How & Where People Network
How--and Where--People Network
Online isn't for everyone; geography matters when it comes to building connections.
By Ivan Misner and Lisa Harris and Alan Rae | November 10, 2009
There are countless online networking activities we could participate in but it's not always clear which online networking sites are truly beneficial. Plus, it can be difficult to figure out how much time we should devote to online networking in order for it to be effective.
One of the things that's changed over the last five or six years is that people no longer trust the experts very much; instead we trust our peers. Therefore--in order to try to get some answers to our questions about how much time we should spend networking and where we should network (face-to-face and online)--we thought the best thing route would be to ask our colleagues.
So last autumn we created a questionnaire, asking people like ourselves how much time they spent networking, what specific marketing tools they used and how they balanced online and real world networking. The last questions we asked pertained to how they liked to network, which events worked best, what size group proved was most beneficial for them and how the process of trust development played out. In the end, 650 people completed the questionnaire; mostly entrepreneurs found through BNI, Ecademy or LinkedIn.
The results of the questionnaire provide very useful information to consider when contemplating a networking strategy.
• The average amount of time business owners spend promoting their business is 12-15 hours. Promotion activities include everything from sales to networking to online and conventional marketing.
• While face-to-face networking activity proved to be overwhelmingly important to respondents, it's also clear that LinkedIn has become an important networking tool, especially for small businesses.
• Other popular tools include workshops, PR, online advertising, and e-mail (more than 25 percent of respondents did one or all of these activities regularly or said they depended on them).
• On the internet side of networking, LinkedIn and Ecademy were favored sites. In the physical world, BNI and other structured events seem to be where people are focusing their networking efforts.
Most people reported that they prefer to network in groups of 20 to 40 people, but there were some that reported a preference for much larger groups. Larger networking groups appear to be more popular among employees of larger companies, European companies, high growth and global companies.
The people who most effectively utilize online media are also good face to face networkers; it seems they're using technology to as an alternative to conventional growth business models.
We also investigated the effects of scalability--whether or not the business is limited by demand rather than its ability to supply or whether a local, national or global orientation has any effect on how people network. It turns out whether or not the business considers itself local (defined as getting 80 percent of its business within a 50 mile radius) or national in scope has a pronounced effect on networking strategies.
Entrepreneurs that think of their companies as national are:
• Twice as likely to use LinkedIn; 40 percent vs. 20 percent,
• More likely to use Twitter; 10 percent vs. 2 percent,
• Twice as likely to use online social networks; 30 percent vs. 15 percent,
• More than twice as likely to have a blog; 25 percent vs. 10 percent,
• More likely to value chance encounters; 22 percent vs. 14 percent,
• Three times as likely to prefer big networking groups of 100 to 1000 members; 16 percent vs. 5 percent.
Thomas Power, chairman of Ecademy, says the key challenge in marketing is to meet and become liked by the 50 people who can most affect your business. An analysis of the data from our survey suggests if you have a local, non-scalable business--like a small, community-oriented organic vegetable business--you can better find those 50 people by conventional, local networking.
However, if you're trying to promote ideas or scalable services nationally, you'll benefit from the random connections that internet networking offers.
Our survey also revealed commonalities across the various groups. All networkers spoke of the importance of a core, local support group. Further, most people prefer to face-to-face networking groups of 20 to 30 individuals.
In addition, all survey participants believe that trust is generated by listening, practicing Givers Gain® and following up with people quickly. A good reputation is based on the opinions of others, evidence of enthusiasm and commitment and the ability to give referrals before expecting them.
Most important to building a good reputation--you must develop the characteristic of clarity. Be clear about what you do, what you stand for and what benefits you and your business offers people who might use your services. Only after peers like you, trust you and clearly know what you do will they give you referrals; regardless of whether you're dealing in online or face-to-face networking.
Since the overwhelming majority of our survey respondents offer business services, and since most business in that industry comes by referral or recommendation, this is real food for thought.
So, where does your business fit into these findings? Do you feel that spending more time online would benefit you or not?
As always if you have any questions or comments please email me at rondazaragoza@gmail.com.
Online isn't for everyone; geography matters when it comes to building connections.
By Ivan Misner and Lisa Harris and Alan Rae | November 10, 2009
There are countless online networking activities we could participate in but it's not always clear which online networking sites are truly beneficial. Plus, it can be difficult to figure out how much time we should devote to online networking in order for it to be effective.
One of the things that's changed over the last five or six years is that people no longer trust the experts very much; instead we trust our peers. Therefore--in order to try to get some answers to our questions about how much time we should spend networking and where we should network (face-to-face and online)--we thought the best thing route would be to ask our colleagues.
So last autumn we created a questionnaire, asking people like ourselves how much time they spent networking, what specific marketing tools they used and how they balanced online and real world networking. The last questions we asked pertained to how they liked to network, which events worked best, what size group proved was most beneficial for them and how the process of trust development played out. In the end, 650 people completed the questionnaire; mostly entrepreneurs found through BNI, Ecademy or LinkedIn.
The results of the questionnaire provide very useful information to consider when contemplating a networking strategy.
• The average amount of time business owners spend promoting their business is 12-15 hours. Promotion activities include everything from sales to networking to online and conventional marketing.
• While face-to-face networking activity proved to be overwhelmingly important to respondents, it's also clear that LinkedIn has become an important networking tool, especially for small businesses.
• Other popular tools include workshops, PR, online advertising, and e-mail (more than 25 percent of respondents did one or all of these activities regularly or said they depended on them).
• On the internet side of networking, LinkedIn and Ecademy were favored sites. In the physical world, BNI and other structured events seem to be where people are focusing their networking efforts.
Most people reported that they prefer to network in groups of 20 to 40 people, but there were some that reported a preference for much larger groups. Larger networking groups appear to be more popular among employees of larger companies, European companies, high growth and global companies.
The people who most effectively utilize online media are also good face to face networkers; it seems they're using technology to as an alternative to conventional growth business models.
We also investigated the effects of scalability--whether or not the business is limited by demand rather than its ability to supply or whether a local, national or global orientation has any effect on how people network. It turns out whether or not the business considers itself local (defined as getting 80 percent of its business within a 50 mile radius) or national in scope has a pronounced effect on networking strategies.
Entrepreneurs that think of their companies as national are:
• Twice as likely to use LinkedIn; 40 percent vs. 20 percent,
• More likely to use Twitter; 10 percent vs. 2 percent,
• Twice as likely to use online social networks; 30 percent vs. 15 percent,
• More than twice as likely to have a blog; 25 percent vs. 10 percent,
• More likely to value chance encounters; 22 percent vs. 14 percent,
• Three times as likely to prefer big networking groups of 100 to 1000 members; 16 percent vs. 5 percent.
Thomas Power, chairman of Ecademy, says the key challenge in marketing is to meet and become liked by the 50 people who can most affect your business. An analysis of the data from our survey suggests if you have a local, non-scalable business--like a small, community-oriented organic vegetable business--you can better find those 50 people by conventional, local networking.
However, if you're trying to promote ideas or scalable services nationally, you'll benefit from the random connections that internet networking offers.
Our survey also revealed commonalities across the various groups. All networkers spoke of the importance of a core, local support group. Further, most people prefer to face-to-face networking groups of 20 to 30 individuals.
In addition, all survey participants believe that trust is generated by listening, practicing Givers Gain® and following up with people quickly. A good reputation is based on the opinions of others, evidence of enthusiasm and commitment and the ability to give referrals before expecting them.
Most important to building a good reputation--you must develop the characteristic of clarity. Be clear about what you do, what you stand for and what benefits you and your business offers people who might use your services. Only after peers like you, trust you and clearly know what you do will they give you referrals; regardless of whether you're dealing in online or face-to-face networking.
Since the overwhelming majority of our survey respondents offer business services, and since most business in that industry comes by referral or recommendation, this is real food for thought.
So, where does your business fit into these findings? Do you feel that spending more time online would benefit you or not?
As always if you have any questions or comments please email me at rondazaragoza@gmail.com.
Thursday, December 3, 2009
10 Ways to Waste Your Time in a Networking Group
10 Ways to Waste Your Time in a Networking Group
Referral business from networking groups can pay off handsomely, so make the most of every meeting.
By Ivan Misner | October 16, 2009
Word-of-mouth marketing is a sure-fire way to generate new business. A single referral can start a chain reaction of new business as positive word spreads. It's no wonder networking groups pay off handsomely in referral business and that membership in a good networking group can be worth a considerable amount of money; especially if you calculate the time you spend each month and the value of that time.
So make your time and efforts worthwhile. Don't squander your opportunity by doing the wrong things in those meetings.
Success in a networking group comes when the rest of the group members trust you enough to open up their best referrals to you. Unless they've seen your work, you have to earn that trust by demonstrating your professionalism to them. Since founding BNI almost 25 years ago, I've seen how people truly succeeded in networks and I've seen how people totally waste their time in them.
Here are 10 mistakes to avoid if you don't want to waste your time in a networking group:
1. Go ahead, air your grievances among your fellow networkers and guests; after all, they really want to hear about your complaints.
2. Wing it in your regular presentations to fellow members--don't worry, you have a mulligan.
3. Use one-on-one meetings to talk about your networking groups' issues instead of learning more about each other.
4. Focus your efforts primarily on selling your services to members of the group.
5. Don't rush to follow up on a referral when someone gives you one. Hey, they know where to find you if they really need you.
6. While other people are doing their introductions, that's the perfect time to think about what referrals you can give that week.
7. Never invite your own guests, just focus on those who show up.
8. Don't worry if you get to the meeting late. No one will notice.
9. Absenteeism, it's no big deal. You can just call in your referrals ... right?
10. Take that phone call and check your messages during a meeting. No, no, it doesn't bother anyone; actually it's a sign of real professionalism that everyone admires.
Imagine how you'd respond if someone in your networking group continually exhibited the behaviors above. Would you be enthusiastic to pass them referrals? Of course not! You'd be hesitant, rightfully, because they've convinced you that they are unprofessional and irresponsible. Of course you'd withhold your valued connections.
We all need to beware of these common pitfalls and take great care to avoid them. They're great reminders that doing business through word-of-mouth marketing requires a special ingredient that only you can supply--commitment.
Commit to the process from the beginning. You have to be an active, responsible, professional, accountable participant and show your fellow networkers the respect, attention, and support that you want them to give you.
You see, the key concept in referral marketing is relationships, and referral relationships don't just spring up full grown--they must be nurtured. Avoid the 10 mistakes on this list because they're detrimental to growing your referral relationships; they will cause the time you spend in your networking meetings to be nothing more than a waste.
Focus on growing your referral relationships by acting in ways that are exactly opposite of what's described above and concentrate on building relationships based on mutual trust and shared benefits. You'll get a lot more out of your group and so will your fellow members.
Remember, if you start putting together your network when the need arises, you're too late. The better way is to begin developing relationships now with the people whose help you will need in the future. Your networking group meetings offer the perfect opportunity and the perfect place to do this. Make the most of this opportunity because there's no room for wasted time. And if you see chronic offenders at your next meeting, print out this list and pass it along.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com.
Referral business from networking groups can pay off handsomely, so make the most of every meeting.
By Ivan Misner | October 16, 2009
Word-of-mouth marketing is a sure-fire way to generate new business. A single referral can start a chain reaction of new business as positive word spreads. It's no wonder networking groups pay off handsomely in referral business and that membership in a good networking group can be worth a considerable amount of money; especially if you calculate the time you spend each month and the value of that time.
So make your time and efforts worthwhile. Don't squander your opportunity by doing the wrong things in those meetings.
Success in a networking group comes when the rest of the group members trust you enough to open up their best referrals to you. Unless they've seen your work, you have to earn that trust by demonstrating your professionalism to them. Since founding BNI almost 25 years ago, I've seen how people truly succeeded in networks and I've seen how people totally waste their time in them.
Here are 10 mistakes to avoid if you don't want to waste your time in a networking group:
1. Go ahead, air your grievances among your fellow networkers and guests; after all, they really want to hear about your complaints.
2. Wing it in your regular presentations to fellow members--don't worry, you have a mulligan.
3. Use one-on-one meetings to talk about your networking groups' issues instead of learning more about each other.
4. Focus your efforts primarily on selling your services to members of the group.
5. Don't rush to follow up on a referral when someone gives you one. Hey, they know where to find you if they really need you.
6. While other people are doing their introductions, that's the perfect time to think about what referrals you can give that week.
7. Never invite your own guests, just focus on those who show up.
8. Don't worry if you get to the meeting late. No one will notice.
9. Absenteeism, it's no big deal. You can just call in your referrals ... right?
10. Take that phone call and check your messages during a meeting. No, no, it doesn't bother anyone; actually it's a sign of real professionalism that everyone admires.
Imagine how you'd respond if someone in your networking group continually exhibited the behaviors above. Would you be enthusiastic to pass them referrals? Of course not! You'd be hesitant, rightfully, because they've convinced you that they are unprofessional and irresponsible. Of course you'd withhold your valued connections.
We all need to beware of these common pitfalls and take great care to avoid them. They're great reminders that doing business through word-of-mouth marketing requires a special ingredient that only you can supply--commitment.
Commit to the process from the beginning. You have to be an active, responsible, professional, accountable participant and show your fellow networkers the respect, attention, and support that you want them to give you.
You see, the key concept in referral marketing is relationships, and referral relationships don't just spring up full grown--they must be nurtured. Avoid the 10 mistakes on this list because they're detrimental to growing your referral relationships; they will cause the time you spend in your networking meetings to be nothing more than a waste.
Focus on growing your referral relationships by acting in ways that are exactly opposite of what's described above and concentrate on building relationships based on mutual trust and shared benefits. You'll get a lot more out of your group and so will your fellow members.
Remember, if you start putting together your network when the need arises, you're too late. The better way is to begin developing relationships now with the people whose help you will need in the future. Your networking group meetings offer the perfect opportunity and the perfect place to do this. Make the most of this opportunity because there's no room for wasted time. And if you see chronic offenders at your next meeting, print out this list and pass it along.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com.
Wednesday, December 2, 2009
SuccessNet Online » Blog Archive » Networking Secrets Unlocked
SuccessNet Online » Blog Archive » Networking Secrets Unlocked
As always if you have any questions or comments please email me at rondazaragoza@gmail.com.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com.
Tuesday, December 1, 2009
EMERGENCY - IRS EMAIL IDENTITY THEFT SCAM
EMERGENCY - IRS EMAIL IDENTITY THEFT SCAM
Of all people, my brother got two emails from the IRS.
They stated:
Based on the last annual fiscal activity we have determined that you are eligible to receive a tax refund. Please submit the tax refund request and allow us 6-9 days in order to process it.
To access the form for our tax refund calculator, please copy/paste in your browser, the link bellow (note spelling error):
THEN THERE WAS A LINK
Copywright 2008, Internal Revenue Service U.S.A.
END OF FAKE EMAIL
This link took you to a website that looked like it was an IRS Website. The info it requested was name, email address, SSN, date of birth and mother's maiden name.
PLEASE NOTE THE IRS DOES NOT NEED YOUR DATE OF BIRTH OR SSN - THEY ALREADY HAVE IT!!! AND THEY UNDER NO CIRCUMSTANCE NEED YOUR MOTHER'S MAIDEN NAME!!!
This is an identity theft e-mail scam. Do not click on it or fill any info in.
IMPORTANT - THE IRS WILL NEVER CONTACT YOU VIA EMAIL UNLESS YOU ARE SPECIFICALLY EXPECTING AN EMAIL SUCH FROM THEM. YOU WILL NEVER GET AN UNANNOUNCED OR UNEXPECTED EMAIL FROM THE IRS.
BUT PLEASE DO THE FOLLOWING IF YOU GET ONE OF THESE EMAILS: Forward the original email to the IRS to the following email address: phishing@irs.gov
Also, please forward me a copy so that I can keep up on the scams that are out there.
PS - My brother was smart enough to contact his accountant - you should do so too!
As always if you have any questions or comments please email me at rondazaragoza@gmail.com.
Of all people, my brother got two emails from the IRS.
They stated:
Based on the last annual fiscal activity we have determined that you are eligible to receive a tax refund. Please submit the tax refund request and allow us 6-9 days in order to process it.
To access the form for our tax refund calculator, please copy/paste in your browser, the link bellow (note spelling error):
THEN THERE WAS A LINK
Copywright 2008, Internal Revenue Service U.S.A.
END OF FAKE EMAIL
This link took you to a website that looked like it was an IRS Website. The info it requested was name, email address, SSN, date of birth and mother's maiden name.
PLEASE NOTE THE IRS DOES NOT NEED YOUR DATE OF BIRTH OR SSN - THEY ALREADY HAVE IT!!! AND THEY UNDER NO CIRCUMSTANCE NEED YOUR MOTHER'S MAIDEN NAME!!!
This is an identity theft e-mail scam. Do not click on it or fill any info in.
IMPORTANT - THE IRS WILL NEVER CONTACT YOU VIA EMAIL UNLESS YOU ARE SPECIFICALLY EXPECTING AN EMAIL SUCH FROM THEM. YOU WILL NEVER GET AN UNANNOUNCED OR UNEXPECTED EMAIL FROM THE IRS.
BUT PLEASE DO THE FOLLOWING IF YOU GET ONE OF THESE EMAILS: Forward the original email to the IRS to the following email address: phishing@irs.gov
Also, please forward me a copy so that I can keep up on the scams that are out there.
PS - My brother was smart enough to contact his accountant - you should do so too!
As always if you have any questions or comments please email me at rondazaragoza@gmail.com.
Friday, November 27, 2009
7 Procrastination Busting Techniques
7 Procrastination Busting Techniques
Nothing is so fatiguing as the eternal hanging on of an uncompleted task.- William James Putting off an easy thing makes it hard. Putting off a hard thing makes it impossible. - George Claude Lorimer The best way to get something done is to begin.-AnonymousLast week you took a quiz to determine if you are a chronic procrastinator. But whether or not your procrastination issues are severe, everyone can benefit from a few procrastination busting techniques. In this installment of our two-part series, we provide you with 7 tips on overcoming procrastination:
1. End each day by planning the next.
You will be better prepared, mentally and physically, to tackle difficult tasks head-on when you schedule time to do them. At the end of each workday, review the schedule for the next day so you set aside time to perform those functions you've been postponing. Often you can overcome procrastination by giving yourself the time to do those things you've been avoiding.
2. Tackle the most formidable task first.
Those tasks you put off are generally the most distasteful. You'll be doing yourself a huge favor if you tackle those tasks first. You know what they say: swallow a toad in the morning and you will encounter nothing more disgusting the rest of the day. When you complete these tasks first thing, you'll find yourself recharged and ready to tackle the remainder of your day with ease.
3. Change your vocabulary.
Sometimes a change in perspective will come easily when accompanied by a change in vocabulary. When looking at those tasks you tend to procrastinate you probably feel as if you have to do them." Change "have to" to "want to" and see if that lightens the load a bit. Also certain projects can appear overwhelming. Rather than tell yourself you must "finish" such projects, tell yourself you will get a good "start" on the project. This may motivate you to tackle it a piece at time.
4. Break large projects into manageable tasks.
Those overwhelming projects are best handled bit by bit. Break those large projects into smaller tasks that can be handled on a daily basis. Schedule these smaller tasks into your day so that you're able to better inch towards project completion.
5. Practice the Ten-Minute Rule.
For whatever reasons, we are unmotivated by certain tasks. Practice the ten-minute rule with these tasks by dedicating just ten-minutes to them. Often you'll find that once you get moving, you're motivated enough to continue long after the ten minutes have ended. And if you're not, at least you did something that contributed to the completion of that task, and it's probably more than you would have thought could be accomplished in just 600 seconds.
6. Reward yourself for completed tasks.
When working on especially dreadful tasks, give yourself a small reward for completing the task by a given time. Whether you take a short walk, surf the internet, or read a page from an engaging book, rewarding yourself in small doses may help you work a little harder on those tasks you tend to procrastinate.
7. Feel the fear and do it anyway.
Sometimes we procrastinate certain things because we're afraid we will fail, we don't have the skill set, or are uncertain where to begin. In situations like these it is best if you feel the fear and move forward. Generally you'll find that your fears were unfounded and that you were equal to the challenge.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com.
Nothing is so fatiguing as the eternal hanging on of an uncompleted task.- William James Putting off an easy thing makes it hard. Putting off a hard thing makes it impossible. - George Claude Lorimer The best way to get something done is to begin.-AnonymousLast week you took a quiz to determine if you are a chronic procrastinator. But whether or not your procrastination issues are severe, everyone can benefit from a few procrastination busting techniques. In this installment of our two-part series, we provide you with 7 tips on overcoming procrastination:
1. End each day by planning the next.
You will be better prepared, mentally and physically, to tackle difficult tasks head-on when you schedule time to do them. At the end of each workday, review the schedule for the next day so you set aside time to perform those functions you've been postponing. Often you can overcome procrastination by giving yourself the time to do those things you've been avoiding.
2. Tackle the most formidable task first.
Those tasks you put off are generally the most distasteful. You'll be doing yourself a huge favor if you tackle those tasks first. You know what they say: swallow a toad in the morning and you will encounter nothing more disgusting the rest of the day. When you complete these tasks first thing, you'll find yourself recharged and ready to tackle the remainder of your day with ease.
3. Change your vocabulary.
Sometimes a change in perspective will come easily when accompanied by a change in vocabulary. When looking at those tasks you tend to procrastinate you probably feel as if you have to do them." Change "have to" to "want to" and see if that lightens the load a bit. Also certain projects can appear overwhelming. Rather than tell yourself you must "finish" such projects, tell yourself you will get a good "start" on the project. This may motivate you to tackle it a piece at time.
4. Break large projects into manageable tasks.
Those overwhelming projects are best handled bit by bit. Break those large projects into smaller tasks that can be handled on a daily basis. Schedule these smaller tasks into your day so that you're able to better inch towards project completion.
5. Practice the Ten-Minute Rule.
For whatever reasons, we are unmotivated by certain tasks. Practice the ten-minute rule with these tasks by dedicating just ten-minutes to them. Often you'll find that once you get moving, you're motivated enough to continue long after the ten minutes have ended. And if you're not, at least you did something that contributed to the completion of that task, and it's probably more than you would have thought could be accomplished in just 600 seconds.
6. Reward yourself for completed tasks.
When working on especially dreadful tasks, give yourself a small reward for completing the task by a given time. Whether you take a short walk, surf the internet, or read a page from an engaging book, rewarding yourself in small doses may help you work a little harder on those tasks you tend to procrastinate.
7. Feel the fear and do it anyway.
Sometimes we procrastinate certain things because we're afraid we will fail, we don't have the skill set, or are uncertain where to begin. In situations like these it is best if you feel the fear and move forward. Generally you'll find that your fears were unfounded and that you were equal to the challenge.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com.
7216 - A Number That Changes My Firm
7216 - A Number That Changes My Firm
The number in question is 7216. No, that is not my winning lottery ticket number. But, just like if I hit the lottery, it will make a drastic change to my practice. 7216 refers to Code Section 7216 of the Internal Revenue Code. So, you are wondering why this number is so big of a deal. Basically, code section 7216 is about the tax preparer maintaining your privacy. Trust me, I already do that.
But, code section 7216 has been amended by our wonderful Congress in such a drastic manner that it greatly effects what I can do for you. In the past, you could call me up, and ask me to send a copy of your tax return to your mortgage company - and I would have done it. Now, everything has changed. Under the new rules, I must obtain written directions in advance from the taxpayer (and only the taxpayer) to release information. In addition, I must obtain very detailed information of why you want me to release that information including the purpose of the request etc. If I comply with those rules, I could open myself up to legal implications based on my professional responsibilities. So, it is kind of a catch 22.
In addition, I will have to keep track of each of those written requests for 7 years. Further, I cannot use a "blanket" release and thus I must get a new release each time. Needless to say, that will become overly cumbersome - even in my paperless environment. As such, I am forced to change my policy on releasing data; And with that - here it is:
NEW POLICY ON RELEASE OF INFORMATION
I will no longer release information to any person other than the taxpayer. If you need a copy of your records for someone, I will only send it to you; and you will need to forward the information to the person requesting the information. I regret any inconvenience that this creates but I am sure you will understand. Specifically, here are the parties that I will release information to:
Individuals (non-minor) - taypayer
Minor taxpayers - taxpayer or parents or legal guardians
Estates - Executor (and like parties)
Trusts - Trustee
General Partner - Any general partner (may restrict to owner with highest ownership percentage)
Limited Partner - The general partner
Corporations - Officers and directors
Non-Profits - Board members and executive director
INFORMATION COVERED BY SECTION 7216
Unfortunately, section 7216 defines the information in such a broad manner that it includes all information obtained or gathered in the preparation of your tax return. Under the new rules, I cannot use the information I obtain in preparing your tax return for any other purpose.
EXAMPLE
If your bookkeeper calls and asks for a depreciation schedule so that they can record the monthly expense; Unfortunately, I cannot send that to them. I will send it to you and you will have to forward it.
Ronda Zaragoza Accountant Eagle Eye Accounting
As always if you have any questions or comments please email me at rondazaragoza@gmail.com.
The number in question is 7216. No, that is not my winning lottery ticket number. But, just like if I hit the lottery, it will make a drastic change to my practice. 7216 refers to Code Section 7216 of the Internal Revenue Code. So, you are wondering why this number is so big of a deal. Basically, code section 7216 is about the tax preparer maintaining your privacy. Trust me, I already do that.
But, code section 7216 has been amended by our wonderful Congress in such a drastic manner that it greatly effects what I can do for you. In the past, you could call me up, and ask me to send a copy of your tax return to your mortgage company - and I would have done it. Now, everything has changed. Under the new rules, I must obtain written directions in advance from the taxpayer (and only the taxpayer) to release information. In addition, I must obtain very detailed information of why you want me to release that information including the purpose of the request etc. If I comply with those rules, I could open myself up to legal implications based on my professional responsibilities. So, it is kind of a catch 22.
In addition, I will have to keep track of each of those written requests for 7 years. Further, I cannot use a "blanket" release and thus I must get a new release each time. Needless to say, that will become overly cumbersome - even in my paperless environment. As such, I am forced to change my policy on releasing data; And with that - here it is:
NEW POLICY ON RELEASE OF INFORMATION
I will no longer release information to any person other than the taxpayer. If you need a copy of your records for someone, I will only send it to you; and you will need to forward the information to the person requesting the information. I regret any inconvenience that this creates but I am sure you will understand. Specifically, here are the parties that I will release information to:
Individuals (non-minor) - taypayer
Minor taxpayers - taxpayer or parents or legal guardians
Estates - Executor (and like parties)
Trusts - Trustee
General Partner - Any general partner (may restrict to owner with highest ownership percentage)
Limited Partner - The general partner
Corporations - Officers and directors
Non-Profits - Board members and executive director
INFORMATION COVERED BY SECTION 7216
Unfortunately, section 7216 defines the information in such a broad manner that it includes all information obtained or gathered in the preparation of your tax return. Under the new rules, I cannot use the information I obtain in preparing your tax return for any other purpose.
EXAMPLE
If your bookkeeper calls and asks for a depreciation schedule so that they can record the monthly expense; Unfortunately, I cannot send that to them. I will send it to you and you will have to forward it.
Ronda Zaragoza Accountant Eagle Eye Accounting
As always if you have any questions or comments please email me at rondazaragoza@gmail.com.
Tax and Financial News for November 2009
Tax and Financial News for November, 2009
Year-End Reminders: April 2010 Can Hurt Less
The leaves are falling and winter is just around the corner — so, too, is the end of the year. With that comes the inevitable ritual of searching for ways to minimize your tax burden for 2009. With 10 months already gone, is there a lot you can do to lower this year’s tax bill? Yes, there is. And that is precisely what this article is about, but you must get started soon to keep Uncle Sam from cashing in on your hard work.
Income
The starting point for your tax savings quest is with your income. How much do you project bringing in from sources such as W-2 wages, interest, dividends and other income that is already on the books? Can you defer or, in some cases, accelerate their receipt?
First, let’s talk about deferring income. In most cases, it’s difficult to minimize salary income that’s already scheduled to be paid. However, your employer might be willing to put off payment of year-end bonuses. This is especially true when the payment has no significant effect on either the employer or the employee. For example, regular C-Corporations that report on an accrual basis can typically deduct bonuses that are owed to an employee who owns less than 50 percent of the company as long as those bonuses are paid by March 15 of the following year. If your employer usually pays bonuses on Dec. 31, it probably will not affect its bottom line to put the payment off until Jan. 1, 2010. Receiving that pay one day later can be a significant savings to you and other employees.
What’s the source of your interest income? If you are not already locked into an interest-bearing vehicle that pays at the end of a month, you could reduce taxable income by investing in a certificate of deposit or something else that pays interest after Dec. 31. The same is true for dividend-paying investments. When investing during the last part of the year, one trap you should be wary of is purchasing taxable income. This happens when you buy a mutual fund or stock that is guaranteed to pay a dividend before year’s end. Typically, the price you pay for the investment includes the amount that will ultimately be paid as a dividend. When the dividend is paid, the market price of the investment decreases and you are left paying unnecessary taxes.
How does your investment portfolio look? Believe it or not, there are a lot of folks with investments that are worth less than what they paid for them. The next two months is a good time to harvest a few losses to offset realized gains on other investments. However, remember that Uncle Sam will let you deduct only $3,000 in capital losses against other income, so be judicious in your sales.
Do you have other sources of income such as rents, installment sales or lease bonuses? As a cash-basis taxpayer, these sources do not become taxable to you until you receive them in cash. While care must be exercised to avoid what is called constructive receipt, it is possible to reduce income by putting payment off until 2010.
Constructive receipt is a concept that basically means you can’t avoid tax on income by refusing to accept payment for that which you are legally entitled. For example, say you own a corporation and it rents a building from you. If the business has the cash to pay the monthly rent, you can’t stop accepting rent payment to avoid taxable income.
Earlier, we mentioned accelerating income. Tax planning generally involves playing the rate game. Sometimes, accelerating income for years in which you expect a low marginal tax rate can enhance your overall tax savings. If 2009 is such a year, consider accelerating the income that you can in order to minimize taxes. Additionally, with looming deficits and the current administration’s stated intentions, there is a good chance that capital gains taxes will increase in the future. When that will happen is anybody’s guess, but the probability makes it a reasonable move to report long-term capital gains sooner rather than later.
Expenses
Expenses over which most individuals have control are itemized deductions, rental and Schedule C business expenses. With respect to itemized deductions and rental expenses, the most important thing to remember is that cash is king. If you pay the expenses before Dec. 31, you can deduct them. If you do not pay the expenses by year’s end, you cannot deduct them.
The cash rule can be difficult to follow if your checking account is a little light. Fortunately, there is always the plastic rule. If you pay your deductible medical bills, taxes and contributions with a credit card before year’s end, the deduction is still valid.
Don’t forget to maximize your retirement plan contributions as well. If your plan allows for it and if you can afford to do so, increase your contributions in the last two months of the year to reduce your taxable income.
Conclusion
Just because most of 2009 is now behind us does not diminish all opportunities to save on your tax bill. Give us a call and let’s look at your tax picture now — while there is still time to help you keep more of your hard-earned money.
This article is intended to provide resources for the tax and accounting needs of small businesses and individuals. The information contained in this informative letter is intended to provide general information on matters of interest in the areas of tax and accounting. Readers are encouraged to contact us regarding specific situations.
Ronda Zaragoza
Accountant
Eagle Eye Accounting
PO Box 20925
Albuquerque, NM 87154
505-550-2621
rondazaragoza@gmail.com
As always if you have any questions or comments please email me at rondazaragoza@gmail.com.
Year-End Reminders: April 2010 Can Hurt Less
The leaves are falling and winter is just around the corner — so, too, is the end of the year. With that comes the inevitable ritual of searching for ways to minimize your tax burden for 2009. With 10 months already gone, is there a lot you can do to lower this year’s tax bill? Yes, there is. And that is precisely what this article is about, but you must get started soon to keep Uncle Sam from cashing in on your hard work.
Income
The starting point for your tax savings quest is with your income. How much do you project bringing in from sources such as W-2 wages, interest, dividends and other income that is already on the books? Can you defer or, in some cases, accelerate their receipt?
First, let’s talk about deferring income. In most cases, it’s difficult to minimize salary income that’s already scheduled to be paid. However, your employer might be willing to put off payment of year-end bonuses. This is especially true when the payment has no significant effect on either the employer or the employee. For example, regular C-Corporations that report on an accrual basis can typically deduct bonuses that are owed to an employee who owns less than 50 percent of the company as long as those bonuses are paid by March 15 of the following year. If your employer usually pays bonuses on Dec. 31, it probably will not affect its bottom line to put the payment off until Jan. 1, 2010. Receiving that pay one day later can be a significant savings to you and other employees.
What’s the source of your interest income? If you are not already locked into an interest-bearing vehicle that pays at the end of a month, you could reduce taxable income by investing in a certificate of deposit or something else that pays interest after Dec. 31. The same is true for dividend-paying investments. When investing during the last part of the year, one trap you should be wary of is purchasing taxable income. This happens when you buy a mutual fund or stock that is guaranteed to pay a dividend before year’s end. Typically, the price you pay for the investment includes the amount that will ultimately be paid as a dividend. When the dividend is paid, the market price of the investment decreases and you are left paying unnecessary taxes.
How does your investment portfolio look? Believe it or not, there are a lot of folks with investments that are worth less than what they paid for them. The next two months is a good time to harvest a few losses to offset realized gains on other investments. However, remember that Uncle Sam will let you deduct only $3,000 in capital losses against other income, so be judicious in your sales.
Do you have other sources of income such as rents, installment sales or lease bonuses? As a cash-basis taxpayer, these sources do not become taxable to you until you receive them in cash. While care must be exercised to avoid what is called constructive receipt, it is possible to reduce income by putting payment off until 2010.
Constructive receipt is a concept that basically means you can’t avoid tax on income by refusing to accept payment for that which you are legally entitled. For example, say you own a corporation and it rents a building from you. If the business has the cash to pay the monthly rent, you can’t stop accepting rent payment to avoid taxable income.
Earlier, we mentioned accelerating income. Tax planning generally involves playing the rate game. Sometimes, accelerating income for years in which you expect a low marginal tax rate can enhance your overall tax savings. If 2009 is such a year, consider accelerating the income that you can in order to minimize taxes. Additionally, with looming deficits and the current administration’s stated intentions, there is a good chance that capital gains taxes will increase in the future. When that will happen is anybody’s guess, but the probability makes it a reasonable move to report long-term capital gains sooner rather than later.
Expenses
Expenses over which most individuals have control are itemized deductions, rental and Schedule C business expenses. With respect to itemized deductions and rental expenses, the most important thing to remember is that cash is king. If you pay the expenses before Dec. 31, you can deduct them. If you do not pay the expenses by year’s end, you cannot deduct them.
The cash rule can be difficult to follow if your checking account is a little light. Fortunately, there is always the plastic rule. If you pay your deductible medical bills, taxes and contributions with a credit card before year’s end, the deduction is still valid.
Don’t forget to maximize your retirement plan contributions as well. If your plan allows for it and if you can afford to do so, increase your contributions in the last two months of the year to reduce your taxable income.
Conclusion
Just because most of 2009 is now behind us does not diminish all opportunities to save on your tax bill. Give us a call and let’s look at your tax picture now — while there is still time to help you keep more of your hard-earned money.
This article is intended to provide resources for the tax and accounting needs of small businesses and individuals. The information contained in this informative letter is intended to provide general information on matters of interest in the areas of tax and accounting. Readers are encouraged to contact us regarding specific situations.
Ronda Zaragoza
Accountant
Eagle Eye Accounting
PO Box 20925
Albuquerque, NM 87154
505-550-2621
rondazaragoza@gmail.com
As always if you have any questions or comments please email me at rondazaragoza@gmail.com.
Subscribe to:
Posts (Atom)
Posts
