While the Internal Revenue Service provides publications about a wide range of topics, there is one publication every taxpayer should have with them when they are preparing their federal tax return. Publication 17, Your Federal Income Tax is available at IRS.gov and contains a wealth of information for individual taxpayers.
Here are the top five things the IRS wants you to know about Publication 17 and how it will come in handy when you prepare your taxes.
The online version of Publication 17 contains electronic links that make finding your answer simple. Both the downloadable PDF and online 2009 Publication 17 have more than 6,000 hyperlinks.
Publication 17 features details on recent tax law changes and legislation that can help you save money at tax time. You’ll find lots of helpful information about the American Recovery and Reinvestment Act of 2009, including the Making Work Pay Credit and the First-time Homebuyer Credit.
This publication is packed with basic tax-filing information and tips on what income to report and how to report it. Publication 17 also includes information on figuring capital gains and losses, claiming dependents, choosing the standard deduction versus itemizing deductions, and using IRAs to save for retirement.
Publication 17 is also available in Spanish.
You can get a hard copy of Publication 17 for free. To get a copy, visit IRS.gov or call 800-TAX-FORM (800-829-3676).
As always if you have any questions or comments please email me at rondazaragoza@gmail.com. I will try and reply to your question within 24-48 hours of receipt.
Thursday, January 28, 2010
Get Your Refund Faster - Choose Direct Deposit
If you want to get your refund as quickly as possible, just tell the IRS to deposit your refund directly into your bank account. By choosing Direct Deposit, you can get your refund much sooner than if you chose to have a paper check mailed to you.
Here are the main reasons 73 million taxpayers chose Direct Deposit in 2009:
Security Thousands of paper checks are returned to the IRS by the U.S. Post Office every year as undeliverable mail. Direct Deposit eliminates the possibility you won’t receive your check and prevents your refund from being stolen.
Convenience The money goes directly into your bank account. You won’t have to make a special trip to the bank to deposit the money yourself.
Ease When you’re preparing your return, simply follow the instructions on your return. Make sure you enter the correct bank account and bank routing numbers on your tax form and you’ll receive your refund quicker than ever.
Options You can also deposit your refund into multiple accounts. With the split refund option, taxpayers can divide their refunds among as many as three checking or savings accounts and up to three different U.S. financial institutions. Use IRS Form 8888, Direct Deposit of Refund to More Than One Account, to divide your refund among different accounts. A word of caution: some financial institutions do not allow a joint refund to be deposited into an individual account. Check with your bank or other financial institution to make sure your Direct Deposit will be accepted.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com. I will try and reply to your question within 24-48 hours of receipt.
Here are the main reasons 73 million taxpayers chose Direct Deposit in 2009:
Security Thousands of paper checks are returned to the IRS by the U.S. Post Office every year as undeliverable mail. Direct Deposit eliminates the possibility you won’t receive your check and prevents your refund from being stolen.
Convenience The money goes directly into your bank account. You won’t have to make a special trip to the bank to deposit the money yourself.
Ease When you’re preparing your return, simply follow the instructions on your return. Make sure you enter the correct bank account and bank routing numbers on your tax form and you’ll receive your refund quicker than ever.
Options You can also deposit your refund into multiple accounts. With the split refund option, taxpayers can divide their refunds among as many as three checking or savings accounts and up to three different U.S. financial institutions. Use IRS Form 8888, Direct Deposit of Refund to More Than One Account, to divide your refund among different accounts. A word of caution: some financial institutions do not allow a joint refund to be deposited into an individual account. Check with your bank or other financial institution to make sure your Direct Deposit will be accepted.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com. I will try and reply to your question within 24-48 hours of receipt.
Tuesday, January 26, 2010
Haiti Tax donations qualify for 2009 deductions
WASHINGTON — People who give to charities providing earthquake relief in Haiti can claim these donations on the tax return they are completing this season, according to the Internal Revenue Service.
Taxpayers who itemize deductions on their 2009 return qualify for this special tax relief provision, enacted Jan. 22. Only cash contributions made to these charities after Jan. 11, 2010, and before March 1, 2010, are eligible. This includes contributions made by text message, check, credit card or debit card.
"Americans have opened their hearts to help those affected by the Haiti earthquake," said IRS Commissioner Doug Shulman." This new law provides an immediate tax benefit for the many taxpayers who have made generous donations."
Taxpayers can benefit from their donations, almost immediately, by filing their 2009 returns early, filing electronically and choosing direct deposit. Refunds take as few as ten days and can be directly deposited into a savings, checking or brokerage account, or used to purchase Series I U.S. savings bonds.
The new law only applies to cash (as opposed to property) contributions. The contributions must be made specifically for the relief of victims in areas affected by the Jan. 12 earthquake in Haiti. Taxpayers have the option of deducting these contributions on either their 2009 or 2010 returns, but not both.
To get a tax benefit, taxpayers must itemize their deductions on Schedule A. Those who claim the standard deduction, including all short-form filers, are not eligible.
Taxpayers should be sure their contributions go to qualified charities. Most organizations eligible to receive tax-deductible donations are listed in a searchable online database available on IRS.gov under Search for Charities. Some organizations, such as churches or governments, may be qualified even though they are not listed on IRS.gov. Donors can find out more about organizations helping Haitian earthquake victims from agencies such as USAID.
The IRS reminds donors that contributions to foreign organizations generally are not deductible. IRS Publication 526, Charitable Contributions, provides information on making contributions to charities.
Federal law requires that taxpayers keep a record of any deductible donations they make. For donations by text message, a telephone bill will meet the recordkeeping requirement if it shows the name of the donee organization, the date of the contribution and the amount of the contribution. For cash contributions made by other means, be sure to keep a bank record, such as a cancelled check, or a receipt from the charity showing the name of the charity and the date and amount of the contribution. Publication 526 has further details on the recordkeeping rules for cash contributions.
This year’s special Haiti relief provision is modeled on a 2005 law that, in the wake of the Dec. 26, 2004, Indian Ocean tsunami, allowed taxpayers to deduct donations they made during January 2005 as if they made the donations in 2004.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com. I will try and reply to your question within 24-48 hours of receipt.
Taxpayers who itemize deductions on their 2009 return qualify for this special tax relief provision, enacted Jan. 22. Only cash contributions made to these charities after Jan. 11, 2010, and before March 1, 2010, are eligible. This includes contributions made by text message, check, credit card or debit card.
"Americans have opened their hearts to help those affected by the Haiti earthquake," said IRS Commissioner Doug Shulman." This new law provides an immediate tax benefit for the many taxpayers who have made generous donations."
Taxpayers can benefit from their donations, almost immediately, by filing their 2009 returns early, filing electronically and choosing direct deposit. Refunds take as few as ten days and can be directly deposited into a savings, checking or brokerage account, or used to purchase Series I U.S. savings bonds.
The new law only applies to cash (as opposed to property) contributions. The contributions must be made specifically for the relief of victims in areas affected by the Jan. 12 earthquake in Haiti. Taxpayers have the option of deducting these contributions on either their 2009 or 2010 returns, but not both.
To get a tax benefit, taxpayers must itemize their deductions on Schedule A. Those who claim the standard deduction, including all short-form filers, are not eligible.
Taxpayers should be sure their contributions go to qualified charities. Most organizations eligible to receive tax-deductible donations are listed in a searchable online database available on IRS.gov under Search for Charities. Some organizations, such as churches or governments, may be qualified even though they are not listed on IRS.gov. Donors can find out more about organizations helping Haitian earthquake victims from agencies such as USAID.
The IRS reminds donors that contributions to foreign organizations generally are not deductible. IRS Publication 526, Charitable Contributions, provides information on making contributions to charities.
Federal law requires that taxpayers keep a record of any deductible donations they make. For donations by text message, a telephone bill will meet the recordkeeping requirement if it shows the name of the donee organization, the date of the contribution and the amount of the contribution. For cash contributions made by other means, be sure to keep a bank record, such as a cancelled check, or a receipt from the charity showing the name of the charity and the date and amount of the contribution. Publication 526 has further details on the recordkeeping rules for cash contributions.
This year’s special Haiti relief provision is modeled on a 2005 law that, in the wake of the Dec. 26, 2004, Indian Ocean tsunami, allowed taxpayers to deduct donations they made during January 2005 as if they made the donations in 2004.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com. I will try and reply to your question within 24-48 hours of receipt.
Ten Facts About Claiming Donations Made to Haiti
If you are donating to charities providing earthquake relief in Haiti, you may be able to claim those donations on your 2009 tax return. Here are 10 important facts the Internal Revenue Service wants you to know about this special provision.
A new law allows you to claim donations for Haitian relief on your 2009 tax return, which you will be filing this year.
The contributions must be made specifically for the relief of victims in areas affected by the Jan. 12 earthquake in Haiti.
To be eligible for a deduction on the 2009 tax return, donations must be made after Jan. 11, 2010 and before March 1, 2010.
In order to be deductible, contributions must be made to qualified charities and can not be designated for the benefit of specific individuals or families.
The new law applies only to cash contributions.
Cash contributions made by text message, check, credit card or debit card may be claimed on your federal tax return.
You must itemize your deductions in order to claim these donations on your tax return.
You have the option of deducting these contributions on either your 2009 or 2010 tax return, but not both.
Contributions made to foreign organizations generally are not deductible. You can find out more about organizations helping Haitian earthquake victims from agencies such as the U.S. Agency for International Development ( www.usaid.gov).
Federal law requires that you keep a record of any deductible donations you make. For donations by text message, a telephone bill will meet the record-keeping requirement if it shows the name of the organization receiving your donation, the date of the contribution, and the amount given. For cash contributions made by other means, be sure to keep a bank record, such as a cancelled check or a receipt from the charity. Receipts should show the name of the charity, the date and amount of the contribution.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com. I will try and reply to your question within 24-48 hours of receipt.
A new law allows you to claim donations for Haitian relief on your 2009 tax return, which you will be filing this year.
The contributions must be made specifically for the relief of victims in areas affected by the Jan. 12 earthquake in Haiti.
To be eligible for a deduction on the 2009 tax return, donations must be made after Jan. 11, 2010 and before March 1, 2010.
In order to be deductible, contributions must be made to qualified charities and can not be designated for the benefit of specific individuals or families.
The new law applies only to cash contributions.
Cash contributions made by text message, check, credit card or debit card may be claimed on your federal tax return.
You must itemize your deductions in order to claim these donations on your tax return.
You have the option of deducting these contributions on either your 2009 or 2010 tax return, but not both.
Contributions made to foreign organizations generally are not deductible. You can find out more about organizations helping Haitian earthquake victims from agencies such as the U.S. Agency for International Development ( www.usaid.gov).
Federal law requires that you keep a record of any deductible donations you make. For donations by text message, a telephone bill will meet the record-keeping requirement if it shows the name of the organization receiving your donation, the date of the contribution, and the amount given. For cash contributions made by other means, be sure to keep a bank record, such as a cancelled check or a receipt from the charity. Receipts should show the name of the charity, the date and amount of the contribution.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com. I will try and reply to your question within 24-48 hours of receipt.
Saturday, January 23, 2010
Talking Tax Forms
The Internal Revenue Service has federal tax form formats which are available to individuals who are sight impaired. More than 700 talking federal income tax forms are available on its web site. The speech friendly forms are easy to use with Microsoft Active Accessibility compliant screen readers and Dragon Naturally Speaking Voice Recognition Software. Braille and large-print forms and publications are also available on-line.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com. I will try and reply to your question within 24-48 hours of receipt.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com. I will try and reply to your question within 24-48 hours of receipt.
The Health Coverage Tax Credit and the COBRA Subsidy
Some people who are eligible for the COBRA subsidy, which has been extended through Feburary also qualify for the health coverage tax credit (HCTC) and may want to choose this more generous benefit, instead. The HCTC pays 80 percent of health insurance premiums for those who qualify. Eligible individuals must be receiving Trade Adjustment Assistance benefits or be over the age of 55 and receiving pension payments from the Pension Benefit Guaranty Corporation. Individuals must also be enrolled in a qualified health plan.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com. I will try and reply to your question within 24-48 hours of receipt.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com. I will try and reply to your question within 24-48 hours of receipt.
File your Form 990 on time to keep your exempt status
1. Reminder: File Form 990 Series Returns Timely to Preserve Tax-Exempt Status
Most tax-exempt organizations, other than churches, must file an annual Form 990 series return with the IRS. It is important to file a timely return because an organization that does not file a required Form 990, 990-EZ, 990-PF or 990-N ("e-Postcard") for three consecutive years will automatically lose its Federal tax-exempt status. Non-filers will be subject to automatic revocation for the first time beginning in 2010. See IR-2010-10 for further information.
Organizations, practitioners and others should feel free to use our useful fact sheet and drop-in media in newsletters or on their Web sites to communicate the importance of filing timely returns to avoid the automatic revocation of tax-exempt status.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com. I will try and reply to your question within 24-48 hours of receipt.
Most tax-exempt organizations, other than churches, must file an annual Form 990 series return with the IRS. It is important to file a timely return because an organization that does not file a required Form 990, 990-EZ, 990-PF or 990-N ("e-Postcard") for three consecutive years will automatically lose its Federal tax-exempt status. Non-filers will be subject to automatic revocation for the first time beginning in 2010. See IR-2010-10 for further information.
Organizations, practitioners and others should feel free to use our useful fact sheet and drop-in media in newsletters or on their Web sites to communicate the importance of filing timely returns to avoid the automatic revocation of tax-exempt status.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com. I will try and reply to your question within 24-48 hours of receipt.
IRS Announces Qualified Disaster Treatment for Haiti
Washington — The Internal Revenue Service today issued guidance that designates the earthquake in Haiti in January 2010 as a qualified disaster for federal tax purposes. The guidance allows recipients of qualified disaster relief payments to exclude those payments from income on their tax returns. Also, the guidance allows employer-sponsored private foundations to assist victims in areas affected by the January 2010 earthquake in Haiti without affecting their tax-exempt status.
Charities usually fall into one of two categories — public charities or private foundations. Under the tax law, a private foundation that is employer-sponsored may make qualified disaster relief payments to employees affected by a qualified disaster. These payments generally include amounts to cover necessary personal, family, living or funeral expenses that were not covered by insurance. They also include expenses to repair or rehabilitate personal residences or repair or replace the contents to the extent that they were not covered by insurance. Again, these payments would not be included in the individual recipient’s gross income.
Qualified disasters include Presidentially declared disasters and any other event that the Secretary of the Treasury determines to be catastrophic. The IRS has determined that the earthquake in Haiti that occurred this month is an event of catastrophic nature for purposes of the federal tax law.
The IRS will presume that qualified disaster relief payments made by a private foundation to employees and their family members in areas affected by the earthquake in Haiti to be consistent with the foundation's charitable purposes
As always if you have any questions or comments please email me at rondazaragoza@gmail.com. I will try and reply to your question within 24-48 hours of receipt.
Charities usually fall into one of two categories — public charities or private foundations. Under the tax law, a private foundation that is employer-sponsored may make qualified disaster relief payments to employees affected by a qualified disaster. These payments generally include amounts to cover necessary personal, family, living or funeral expenses that were not covered by insurance. They also include expenses to repair or rehabilitate personal residences or repair or replace the contents to the extent that they were not covered by insurance. Again, these payments would not be included in the individual recipient’s gross income.
Qualified disasters include Presidentially declared disasters and any other event that the Secretary of the Treasury determines to be catastrophic. The IRS has determined that the earthquake in Haiti that occurred this month is an event of catastrophic nature for purposes of the federal tax law.
The IRS will presume that qualified disaster relief payments made by a private foundation to employees and their family members in areas affected by the earthquake in Haiti to be consistent with the foundation's charitable purposes
As always if you have any questions or comments please email me at rondazaragoza@gmail.com. I will try and reply to your question within 24-48 hours of receipt.
Haiti Tax Deductions ??
Notice 2010-16 designates the Haiti earthquake occurring in January 2010 as a qualified disaster for purposes of § 139 of the Internal Revenue Code.
Notice 2010-16 will be published in Internal Revenue Bulletin 2010-06 on February 8, 2010.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com. I will try and reply to your question within 24-48 hours of receipt.
Notice 2010-16 will be published in Internal Revenue Bulletin 2010-06 on February 8, 2010.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com. I will try and reply to your question within 24-48 hours of receipt.
Friday, January 22, 2010
Ten Things You Should Know about the Making Work Pay Tax Credit
Many working taxpayers are eligible for the Making Work Pay Tax Credit, a provision created by the American Recovery and Reinvestment Act in early 2009.
Here are 10 things the IRS wants you to know about this tax credit to ensure you receive the entire amount for which you are eligible.
1. In 2009 and 2010, the Making Work Pay provision provides a refundable tax credit of up to $400 for individuals and up to $800 for married taxpayers filing joint returns.
2. For taxpayers who receive a paycheck and are subject to withholding, the credit will typically be handled by their employers through automated withholding changes.
3. Taxpayers receiving less than the full amount of the allowable credit through reduced withholding will be entitled to claim any remaining credit when they file their tax return.
4. The amount of the credit actually received during 2009 in the form of reduced withholding will be reported on your 2009 tax return. Taxpayers who do not have taxes withheld by an employer during the year can claim the credit on their 2009 tax return filed in 2010.
5. Taxpayers who file Form 1040 or 1040A will use Schedule M, Making Work Pay and Government Retiree Credits to figure the Making Work Pay Tax Credit. Completing Schedule M will help taxpayers determine whether they have already received the full credit in their paycheck or are due more money as a result of the credit.
6. Taxpayers who file Form 1040-EZ will use the worksheet for Line 8 on the back of the 1040-EZ to figure their Making Work Pay Tax Credit.
7. In 2010, you may notice that your paychecks are slightly lower than in 2009. The slight decrease may be because of the Making Work Pay Credit. Most of the credit for wage earners is distributed through reduced withholding. The credit – which was spread out over nine months last year – is being spread over 12 months this year. A little less credit in each paycheck means slightly higher withholding. But don’t worry, in the end it all adds up.
8. Certain taxpayers should review their tax withholding to ensure enough tax is being withheld in 2010. Those who should pay particular attention to their withholding include: married couples with two incomes, individuals with multiple jobs, dependents, pensioners, Social Security recipients who also work, and workers without valid Social Security numbers.
Having too little tax withheld could result in potentially smaller refunds or – in limited instances – small balance due rather than an expected refund.
9. To ensure your current withholding is appropriate for your individual situation, you can review Publication 919, How Do I Adjust My Tax Withholding? You can also perform a quick check of your withholding using the interactive IRS Withholding Calculator on IRS.gov.
10. If you find you need to adjust your withholding, submit a revised Form W-4, Employee's Withholding Allowance Certificate to your employer.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com. I will try and reply to your question within 24-48 hours of receipt.
Here are 10 things the IRS wants you to know about this tax credit to ensure you receive the entire amount for which you are eligible.
1. In 2009 and 2010, the Making Work Pay provision provides a refundable tax credit of up to $400 for individuals and up to $800 for married taxpayers filing joint returns.
2. For taxpayers who receive a paycheck and are subject to withholding, the credit will typically be handled by their employers through automated withholding changes.
3. Taxpayers receiving less than the full amount of the allowable credit through reduced withholding will be entitled to claim any remaining credit when they file their tax return.
4. The amount of the credit actually received during 2009 in the form of reduced withholding will be reported on your 2009 tax return. Taxpayers who do not have taxes withheld by an employer during the year can claim the credit on their 2009 tax return filed in 2010.
5. Taxpayers who file Form 1040 or 1040A will use Schedule M, Making Work Pay and Government Retiree Credits to figure the Making Work Pay Tax Credit. Completing Schedule M will help taxpayers determine whether they have already received the full credit in their paycheck or are due more money as a result of the credit.
6. Taxpayers who file Form 1040-EZ will use the worksheet for Line 8 on the back of the 1040-EZ to figure their Making Work Pay Tax Credit.
7. In 2010, you may notice that your paychecks are slightly lower than in 2009. The slight decrease may be because of the Making Work Pay Credit. Most of the credit for wage earners is distributed through reduced withholding. The credit – which was spread out over nine months last year – is being spread over 12 months this year. A little less credit in each paycheck means slightly higher withholding. But don’t worry, in the end it all adds up.
8. Certain taxpayers should review their tax withholding to ensure enough tax is being withheld in 2010. Those who should pay particular attention to their withholding include: married couples with two incomes, individuals with multiple jobs, dependents, pensioners, Social Security recipients who also work, and workers without valid Social Security numbers.
Having too little tax withheld could result in potentially smaller refunds or – in limited instances – small balance due rather than an expected refund.
9. To ensure your current withholding is appropriate for your individual situation, you can review Publication 919, How Do I Adjust My Tax Withholding? You can also perform a quick check of your withholding using the interactive IRS Withholding Calculator on IRS.gov.
10. If you find you need to adjust your withholding, submit a revised Form W-4, Employee's Withholding Allowance Certificate to your employer.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com. I will try and reply to your question within 24-48 hours of receipt.
Thursday, January 21, 2010
Twenty-Two Last-Chance Opportunities for Tax Savings
1. Income. Up to $2,400 of unemployment compensation benefits are excluded from gross income by the recipient. However, the exclusion is not available for benefits received in tax years beginning after 2009 [IRC Sec. 85(c)].
2. Personal deductions. Clients can claim a deduction (whether they itemize or claim the standard deduction) for sales or excises taxes paid on the purchase of a new vehicle. The deduction (phased out at higher income levels) does not apply to purchases after December 31, 2009 [IRC Sec. 164(b)(6)(G)].
3. Personal deductions. Clients who claim the standard deduction can take an additional deduction for state and local property taxes, up to a maximum of $500 ($1,000 for joint return filers). The deduction is not available for tax years beginning after 2009 [IRC Sec. 63(c)(7)].
4. Personal deductions. A client can elect to take an itemized deduction for state and local general sales taxes instead of an itemized deduction for state and local income taxes, but the election is available only for tax years beginning before Jan. 1, 2010 [IRC Sec. 164(b)(5)(I)].
5. Personal deductions. A client may claim an above-the-line deduction for “qualified tuition and related expenses” paid for the enrollment or attendance of the client, the client’s spouse, or a dependent at an eligible institution of higher education. The deduction cannot exceed $4,000 (phased out at higher income levels) and applies only to tax years beginning before January 1, 2010 [IRC Sec. 222(e)].
6. Personal deductions. The maximum deduction allowed annually for charitable donations is increased in the case of “qualified conservation contributions.” The increased deduction is not available for donations after December 31, 2009 [IRC Sec. 170(b)(1)(E)].
7. Business deductions. For tax years beginning before 2010, teachers in grades K-12 and other eligible educators can claim an above-the-line deduction for up to $250 of their out-of-pocket expenses for books and supplies used in the classroom [IRC Sec. 62(d)(1)].
8. Business deductions. A client can claim an additional 50% depreciation allowance for qualifying business machinery and equipment placed in service before January 1, 2010 [IRC Sec. 168(k)(2)(A)].
9. Business deductions. A client can claim a Section 179 expensing deduction for the first $250,000 of qualifying equipment and machinery placed in service during the year, subject to a phase out if more than $800,000 of eligible property is placed in service during the year. For tax years beginning after December 31, 2009, the maximum Section 179 deduction drops to $125,000 (adjusted for inflation) with the phase-out starting at the $500,000 level [IRC Sec. 179(b)(7)].
10. Business deductions. The cost of qualified leasehold improvement property, restaurant property, and retail space improvement property can be written off over 15 years. The 15-year write-off period is not available for property placed in service after December 31, 2009 [IRC Sec. 168(e)(3)(E)].
11. Business deductions. Business clients may claim enhanced deductions for donations of food inventory to a charitable organization if the organization uses the property solely for the care of the ill, the needy, or infants. The enhanced deduction does not apply to donations after December 31, 2009 [IRC Sec. 170(e)(3)(C)].
12. Business deductions. The maximum first-year depreciation deduction for passenger automobiles used for business purposes is increased by $8,000 for automobiles placed in service before 2010 [IRC Sec. 68(e)(3)(B)].
13. Business deductions. Certain qualifying machinery and equipment used in a farming business may be written off over a five-year cost recovery period. The original use of the property must begin with the taxpayer and the property must be placed in service before January 1, 2010 [IRC Sec. 168(e)(3)(B)].
14. Personal tax credits. A client who hasn’t owned a home during the previous three years can claim a first-time homebuyer credit of up to $8,000 (phased out at higher income levels) for the purchase of a principal residence. The credit can be claimed only for homes purchased before December 1, 2009 [IRC Sec. 36].
15. Business credits. Employers may claim a 20% income tax credit for qualifying differential pay paid to employees on active military duty. The credit expires for payments made after December 31, 2009 [IRC Sec. 45P].
16. Business credits. An eligible contractor may claim a credit of up to $2,000 for each qualified new energy efficient home that the contractor constructs and that is acquired from the contractor for use as a residence. The credit does not apply to homes acquired after December 31, 2009 [IRC Sec. 45L].
17. Alternative minimum tax. Clients can offset nonrefundable personal tax credits, such as the child and dependent care credit and the Lifetime Learning credit, against their alternative minimum liability. The offset will not be available for tax years beginning after 2009 [IRC Sec. 26(a)(2)].
18. Alternative minimum tax. For tax years beginning in 2009, the exemption amounts used in calculating a client’s alternative minimum taxable income of $70,950 for married couples filing a joint return and $46,700 for singles and heads of households. For tax years beginning after 2009, these amounts are scheduled to drop to $45,000 and $33,750, respectively [IRC Sec. 55(d)(1)].
19. Estimated taxes. For small business owners with adjusted gross income of $500,000 or less, the “required annual payment” of 2009 estimated taxes is the lesser of (1) 90% of the current year’s tax or (2) 90% of the prior year’s tax. For 2010, the prior-year’s-tax threshold rises to 100% (or 110% for clients with adjusted gross income of $150,000 or more) [IRC Sec. 6654(d)(1)].
20. Retirement plans. The requirement that an IRA owner age 70 ½ or over must receive a minimum distribution annually is suspended for 2009, but is reinstated in 2010 [IRC Sec. 401(a)(9)(H)].
21. Retirement plans. An IRA may exclude from income distributions of up to $100,000 annually if paid directly by the IRA trustee to charitable organization. The exclusion expires in tax years beginning after 2009 [IRC Sec. 408(d)(8)].
22. Employee benefits. Clients who are covered by employer-sponsored health plans and are laid off before January 1, 2010 can qualify for subsidized plan continuation (COBRA) coverage for up to nine months. Employers can claim a credit against employment taxes for the subsidies provided to employees [IRC Sec. 6432].
As always if you have any questions or comments please email me at rondazaragoza@gmail.com.
1. Income. Up to $2,400 of unemployment compensation benefits are excluded from gross income by the recipient. However, the exclusion is not available for benefits received in tax years beginning after 2009 [IRC Sec. 85(c)].
2. Personal deductions. Clients can claim a deduction (whether they itemize or claim the standard deduction) for sales or excises taxes paid on the purchase of a new vehicle. The deduction (phased out at higher income levels) does not apply to purchases after December 31, 2009 [IRC Sec. 164(b)(6)(G)].
3. Personal deductions. Clients who claim the standard deduction can take an additional deduction for state and local property taxes, up to a maximum of $500 ($1,000 for joint return filers). The deduction is not available for tax years beginning after 2009 [IRC Sec. 63(c)(7)].
4. Personal deductions. A client can elect to take an itemized deduction for state and local general sales taxes instead of an itemized deduction for state and local income taxes, but the election is available only for tax years beginning before Jan. 1, 2010 [IRC Sec. 164(b)(5)(I)].
5. Personal deductions. A client may claim an above-the-line deduction for “qualified tuition and related expenses” paid for the enrollment or attendance of the client, the client’s spouse, or a dependent at an eligible institution of higher education. The deduction cannot exceed $4,000 (phased out at higher income levels) and applies only to tax years beginning before January 1, 2010 [IRC Sec. 222(e)].
6. Personal deductions. The maximum deduction allowed annually for charitable donations is increased in the case of “qualified conservation contributions.” The increased deduction is not available for donations after December 31, 2009 [IRC Sec. 170(b)(1)(E)].
7. Business deductions. For tax years beginning before 2010, teachers in grades K-12 and other eligible educators can claim an above-the-line deduction for up to $250 of their out-of-pocket expenses for books and supplies used in the classroom [IRC Sec. 62(d)(1)].
8. Business deductions. A client can claim an additional 50% depreciation allowance for qualifying business machinery and equipment placed in service before January 1, 2010 [IRC Sec. 168(k)(2)(A)].
9. Business deductions. A client can claim a Section 179 expensing deduction for the first $250,000 of qualifying equipment and machinery placed in service during the year, subject to a phase out if more than $800,000 of eligible property is placed in service during the year. For tax years beginning after December 31, 2009, the maximum Section 179 deduction drops to $125,000 (adjusted for inflation) with the phase-out starting at the $500,000 level [IRC Sec. 179(b)(7)].
10. Business deductions. The cost of qualified leasehold improvement property, restaurant property, and retail space improvement property can be written off over 15 years. The 15-year write-off period is not available for property placed in service after December 31, 2009 [IRC Sec. 168(e)(3)(E)].
11. Business deductions. Business clients may claim enhanced deductions for donations of food inventory to a charitable organization if the organization uses the property solely for the care of the ill, the needy, or infants. The enhanced deduction does not apply to donations after December 31, 2009 [IRC Sec. 170(e)(3)(C)].
12. Business deductions. The maximum first-year depreciation deduction for passenger automobiles used for business purposes is increased by $8,000 for automobiles placed in service before 2010 [IRC Sec. 68(e)(3)(B)].
13. Business deductions. Certain qualifying machinery and equipment used in a farming business may be written off over a five-year cost recovery period. The original use of the property must begin with the taxpayer and the property must be placed in service before January 1, 2010 [IRC Sec. 168(e)(3)(B)].
14. Personal tax credits. A client who hasn’t owned a home during the previous three years can claim a first-time homebuyer credit of up to $8,000 (phased out at higher income levels) for the purchase of a principal residence. The credit can be claimed only for homes purchased before December 1, 2009 [IRC Sec. 36].
15. Business credits. Employers may claim a 20% income tax credit for qualifying differential pay paid to employees on active military duty. The credit expires for payments made after December 31, 2009 [IRC Sec. 45P].
16. Business credits. An eligible contractor may claim a credit of up to $2,000 for each qualified new energy efficient home that the contractor constructs and that is acquired from the contractor for use as a residence. The credit does not apply to homes acquired after December 31, 2009 [IRC Sec. 45L].
17. Alternative minimum tax. Clients can offset nonrefundable personal tax credits, such as the child and dependent care credit and the Lifetime Learning credit, against their alternative minimum liability. The offset will not be available for tax years beginning after 2009 [IRC Sec. 26(a)(2)].
18. Alternative minimum tax. For tax years beginning in 2009, the exemption amounts used in calculating a client’s alternative minimum taxable income of $70,950 for married couples filing a joint return and $46,700 for singles and heads of households. For tax years beginning after 2009, these amounts are scheduled to drop to $45,000 and $33,750, respectively [IRC Sec. 55(d)(1)].
19. Estimated taxes. For small business owners with adjusted gross income of $500,000 or less, the “required annual payment” of 2009 estimated taxes is the lesser of (1) 90% of the current year’s tax or (2) 90% of the prior year’s tax. For 2010, the prior-year’s-tax threshold rises to 100% (or 110% for clients with adjusted gross income of $150,000 or more) [IRC Sec. 6654(d)(1)].
20. Retirement plans. The requirement that an IRA owner age 70 ½ or over must receive a minimum distribution annually is suspended for 2009, but is reinstated in 2010 [IRC Sec. 401(a)(9)(H)].
21. Retirement plans. An IRA may exclude from income distributions of up to $100,000 annually if paid directly by the IRA trustee to charitable organization. The exclusion expires in tax years beginning after 2009 [IRC Sec. 408(d)(8)].
22. Employee benefits. Clients who are covered by employer-sponsored health plans and are laid off before January 1, 2010 can qualify for subsidized plan continuation (COBRA) coverage for up to nine months. Employers can claim a credit against employment taxes for the subsidies provided to employees [IRC Sec. 6432].
As always if you have any questions or comments please email me at rondazaragoza@gmail.com.
Tuesday, January 12, 2010
Word of Mouth marketing can bite back
Word-of-Mouth Marketing Can Bite Back
A lot of reputations are at stake when you give a referral--including yours. Make it count and keep your integrity.
By Ivan Misner | March 04, 2009
Word-of-mouth is the most effective form of advertising--but it's not the safest. Some people approach referral marketing with an attitude that all they have to do is get to know people and referral business will simply bubble up like spring water. What they don't realize is that once trust evaporates, so does the water.
In word-of-mouth (or referral) marketing, your integrity and your reputation are on the line all the time. You can't hide behind an ad. In the referral process, you're continually transparent; you've got to do what you say you're going to do. You've got to be professional. Any flaw in your integrity becomes instantly visible to everyone you're dealing with.
When you give a referral, you give away a little bit of your reputation. While giving a good referral will enhance your relationship, a bad referral will hurt it. If the person you referred does a poor job or is dishonest, your reputation is what takes the biggest hit. Your relationship with the prospect will probably suffer, at least temporarily, and you may even lose that person as a customer.
For example, even top-flight master networkers can inadvertently pass a bad referral once in a while. I started a new company with two partners--Mike A and Mike B. Knowing that we'd be doing a lot of business printing, Mike A referred one of his clients, who owned a business-printing company, to Mike B. A deal was made, but before long it became apparent that the vendor was charging for services that hadn't been included in the quote. Mike B called Mike A and complained. Mike A called the business printer and complained. The vendor called Mike B and apologized for neglecting to reveal hidden charges in the contract. Mike B told him, "I'll accept your apology, but I think the bigger apology needs to go to my partner, because he's the one who referred you. You've done him a lot more damage than you've done me."
Since that time, we've done no business with that business printer and would never consider referring him to anyone we know. It was later learned that the vendor had cheated other people Mike A had referred him to and that, like termites, the damage to Mike A's reputation stayed hidden until it came to light in his own business referral. In the end, Mike A greatly mitigated the damage by contacting and apologizing to each of the people whose business had been harmed by the unscrupulous vendor he'd referred them to. In this way, he was able to minimize the damage to his own networking relationships.
As you can see, the biggest risk in this referral was to the referral giver's reputation and business relationships. Many people hired this printer without a bid process because of Mike A's reputation and clout. That's why referral marketing is dangerous, and why the referral giver owes it to himself and others to know as much as possible about the vendors he's referring to others. Take the time to get to know the people you're referring. Make sure they have integrity; if they don't, your reputation is at risk. Here's another important point: Never give good referrals to people who don't want them or can't handle them with integrity and professionalism.
Similarly, if the person being referred assumes he's got carte blanche because he's a referral--a friend of a friend--he can do himself permanent damage by performing poorly or dishonestly. When your business depends on word-of-mouth, you can't hide behind a mass advertising campaign and bank on plenty of new customers replacing used-up, disgruntled ones. Word-of-mouth is always working--if not for you, then against you.
The same thing goes for the prospect. If you're expecting to get a break--say a special price or a freebie--or if you try to take advantage of a situation in which a friend referred you to a vendor she knows, there's a strong chance you're damaging the vendor's relationship with your friend by making her look bad. Rather than refer other vendors to you and risk damaging those relationships, chances are the referral giver is going to avoid you in the future.
As you can see, everybody in this three-way referral relationship is in a fishbowl. Everything you're doing or communicating, everything you're displaying, is part of your word-of-mouth message. Dishonesty, incompetence and carelessness quickly become apparent to all. In traditional advertising, a graphic designer can create your image--your brand. In word-of-mouth marketing, your image is not only what's been created for you, it's also the way you come to the table--even the way you behave in roles outside of business. For example, if your child's Little League coach is timely, well-behaved, professional and a good leader, you'll be favorably disposed toward giving him your business when you learn he's also a respected attorney. His professional demeanor outside of business is likely to win him clients. Taking a similar approach in life is likely to win you business, too.
Even for someone who's honest, skilled and dedicated, word-of-mouth marketing may not be the best choice. If your business can ring up plenty of sales based on your customer service reputation alone, if you're uncomfortable spending the face time needed to maintain good networking relationships and if you don't want to do marketing yourself--traditional advertising probably should be your choice of marketing strategy.
Remember, word-of-mouth is always working; it's just not always working for you--especially if you're a jerk.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com.
A lot of reputations are at stake when you give a referral--including yours. Make it count and keep your integrity.
By Ivan Misner | March 04, 2009
Word-of-mouth is the most effective form of advertising--but it's not the safest. Some people approach referral marketing with an attitude that all they have to do is get to know people and referral business will simply bubble up like spring water. What they don't realize is that once trust evaporates, so does the water.
In word-of-mouth (or referral) marketing, your integrity and your reputation are on the line all the time. You can't hide behind an ad. In the referral process, you're continually transparent; you've got to do what you say you're going to do. You've got to be professional. Any flaw in your integrity becomes instantly visible to everyone you're dealing with.
When you give a referral, you give away a little bit of your reputation. While giving a good referral will enhance your relationship, a bad referral will hurt it. If the person you referred does a poor job or is dishonest, your reputation is what takes the biggest hit. Your relationship with the prospect will probably suffer, at least temporarily, and you may even lose that person as a customer.
For example, even top-flight master networkers can inadvertently pass a bad referral once in a while. I started a new company with two partners--Mike A and Mike B. Knowing that we'd be doing a lot of business printing, Mike A referred one of his clients, who owned a business-printing company, to Mike B. A deal was made, but before long it became apparent that the vendor was charging for services that hadn't been included in the quote. Mike B called Mike A and complained. Mike A called the business printer and complained. The vendor called Mike B and apologized for neglecting to reveal hidden charges in the contract. Mike B told him, "I'll accept your apology, but I think the bigger apology needs to go to my partner, because he's the one who referred you. You've done him a lot more damage than you've done me."
Since that time, we've done no business with that business printer and would never consider referring him to anyone we know. It was later learned that the vendor had cheated other people Mike A had referred him to and that, like termites, the damage to Mike A's reputation stayed hidden until it came to light in his own business referral. In the end, Mike A greatly mitigated the damage by contacting and apologizing to each of the people whose business had been harmed by the unscrupulous vendor he'd referred them to. In this way, he was able to minimize the damage to his own networking relationships.
As you can see, the biggest risk in this referral was to the referral giver's reputation and business relationships. Many people hired this printer without a bid process because of Mike A's reputation and clout. That's why referral marketing is dangerous, and why the referral giver owes it to himself and others to know as much as possible about the vendors he's referring to others. Take the time to get to know the people you're referring. Make sure they have integrity; if they don't, your reputation is at risk. Here's another important point: Never give good referrals to people who don't want them or can't handle them with integrity and professionalism.
Similarly, if the person being referred assumes he's got carte blanche because he's a referral--a friend of a friend--he can do himself permanent damage by performing poorly or dishonestly. When your business depends on word-of-mouth, you can't hide behind a mass advertising campaign and bank on plenty of new customers replacing used-up, disgruntled ones. Word-of-mouth is always working--if not for you, then against you.
The same thing goes for the prospect. If you're expecting to get a break--say a special price or a freebie--or if you try to take advantage of a situation in which a friend referred you to a vendor she knows, there's a strong chance you're damaging the vendor's relationship with your friend by making her look bad. Rather than refer other vendors to you and risk damaging those relationships, chances are the referral giver is going to avoid you in the future.
As you can see, everybody in this three-way referral relationship is in a fishbowl. Everything you're doing or communicating, everything you're displaying, is part of your word-of-mouth message. Dishonesty, incompetence and carelessness quickly become apparent to all. In traditional advertising, a graphic designer can create your image--your brand. In word-of-mouth marketing, your image is not only what's been created for you, it's also the way you come to the table--even the way you behave in roles outside of business. For example, if your child's Little League coach is timely, well-behaved, professional and a good leader, you'll be favorably disposed toward giving him your business when you learn he's also a respected attorney. His professional demeanor outside of business is likely to win him clients. Taking a similar approach in life is likely to win you business, too.
Even for someone who's honest, skilled and dedicated, word-of-mouth marketing may not be the best choice. If your business can ring up plenty of sales based on your customer service reputation alone, if you're uncomfortable spending the face time needed to maintain good networking relationships and if you don't want to do marketing yourself--traditional advertising probably should be your choice of marketing strategy.
Remember, word-of-mouth is always working; it's just not always working for you--especially if you're a jerk.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com.
Thursday, January 7, 2010
Facebook | Eagle Eye Accounting Links
Facebook | Eagle Eye Accounting Links
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, January 5, 2010
Use small actions to get big results
Use Small Actions to Get Big Results
When it comes to creating relationships with other companies, take a long-term approach.
By Ivan Misner | December 03, 2008
I was recently speaking to a friend of mine who's a partner in an international consulting and training company when we discovered we had a mutual acquaintance--a bestselling author and fairly well-known speaker.
In our discussion, we found out he'd contacted each of us individually to see if there were any possibilities for some type of strategic alliance with his company and each of our own, individually. We were both open to the possibility but couldn't see an immediate and dramatic way our companies could link with his and undertake any specific projects at that time. We were both a bit amused to then discover that we were summarily "dropped" from his radar after that.
We sensed he was looking for that one big alliance that would help his company soar to the next level. Ironically, we'd had the same type of phone call with each other just 18 months earlier. We had come basically to the same conclusion: There was nothing on a grand scale that we could do together at that moment. The difference, however, was the rest of the story.
You see, we agreed to stay in touch, and we did. We connected several times over the year and met in person as well. During that time, we gradually found some simple ways to help each other and slowly enhanced the relationship. This was a sharp contrast from the third party we'd talked to individually. We both felt that when this person didn't see any big payoff, we became persona non grata with him. On the other hand, the two of us found ways to help each other gradually and still continue to build our relationship.
We came to the conclusion that most people who are successful at networking and creating strong strategic alliances view the process as a series of small actions taken with many people to create a long-term positive growth for their companies. The process is more of a marathon than a sprint. Throughout the race, you form alliances and help each other in what may seem like little ways over the long haul, but small actions over time can create big results.
Here's another real-life example of a scenario in which two companies reached out to me and my company to try to achieve a strategic alliance:
The first company, which shall remain nameless on the grounds that it likes to slam folks it doesn't approve of in the media, contacted me. Its introduction was akin to "Glad to meet you--let's get married!" I really got the sense from this company that it wanted to give me the privilege of sharing my entire database of contacts with it based on who it was and how amazing it would be for me to even say I had stood in its shadow. Get the picture?
When I explained our corporate philosophy and my own personal belief system that deepening a business alliance and building a relationship with a business partner took time and effort before getting to the "let's get married" stage, this company abruptly ended the call and--I imagine--moved on down its computer-generated list of businesses to call.
By contrast, here's how a second organization in the same business approached the same issue: The owner himself contacted me and started the conversation by asking what our corporate plans were. I shared with him what our overall goal for growth was over the next five years. The next statement from him was, "We want to help you achieve that!"
From there it went from "Glad to meet you" to "Let's get to know each other better." He then shared with me that he had ideas that could help us achieve our corporate goal and help our members perform better in business at the same time.
When I explained, as I had with Company X, that our philosophy as a networking organization was one of mutual cooperation and that our belief was that anything really of value to either of us would take time, he completely got it.
Our relationship has developed organically, and we now have a strong strategic alliance with the organization based on getting to know each other and working with each other gradually.
I'm not sure how Company X is faring; I don't hear so much about their program anymore. I wonder why.
Looking back over two decades of building an international company, I can clearly see that no one person or company brought something to the table that launched my company to the next level. Instead, it was the cumulative effect of many people, many strategic alliances and many well-nurtured relationships that over time catapulted my business higher than ever imagined in the early days. Each contact, each opportunity to reach out to each other and each mutually-beneficial activity served as just one more spoke in the wheel as we rolled up the hill toward success.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com. I will try and return a reply within 24-48 hours.
When it comes to creating relationships with other companies, take a long-term approach.
By Ivan Misner | December 03, 2008
I was recently speaking to a friend of mine who's a partner in an international consulting and training company when we discovered we had a mutual acquaintance--a bestselling author and fairly well-known speaker.
In our discussion, we found out he'd contacted each of us individually to see if there were any possibilities for some type of strategic alliance with his company and each of our own, individually. We were both open to the possibility but couldn't see an immediate and dramatic way our companies could link with his and undertake any specific projects at that time. We were both a bit amused to then discover that we were summarily "dropped" from his radar after that.
We sensed he was looking for that one big alliance that would help his company soar to the next level. Ironically, we'd had the same type of phone call with each other just 18 months earlier. We had come basically to the same conclusion: There was nothing on a grand scale that we could do together at that moment. The difference, however, was the rest of the story.
You see, we agreed to stay in touch, and we did. We connected several times over the year and met in person as well. During that time, we gradually found some simple ways to help each other and slowly enhanced the relationship. This was a sharp contrast from the third party we'd talked to individually. We both felt that when this person didn't see any big payoff, we became persona non grata with him. On the other hand, the two of us found ways to help each other gradually and still continue to build our relationship.
We came to the conclusion that most people who are successful at networking and creating strong strategic alliances view the process as a series of small actions taken with many people to create a long-term positive growth for their companies. The process is more of a marathon than a sprint. Throughout the race, you form alliances and help each other in what may seem like little ways over the long haul, but small actions over time can create big results.
Here's another real-life example of a scenario in which two companies reached out to me and my company to try to achieve a strategic alliance:
The first company, which shall remain nameless on the grounds that it likes to slam folks it doesn't approve of in the media, contacted me. Its introduction was akin to "Glad to meet you--let's get married!" I really got the sense from this company that it wanted to give me the privilege of sharing my entire database of contacts with it based on who it was and how amazing it would be for me to even say I had stood in its shadow. Get the picture?
When I explained our corporate philosophy and my own personal belief system that deepening a business alliance and building a relationship with a business partner took time and effort before getting to the "let's get married" stage, this company abruptly ended the call and--I imagine--moved on down its computer-generated list of businesses to call.
By contrast, here's how a second organization in the same business approached the same issue: The owner himself contacted me and started the conversation by asking what our corporate plans were. I shared with him what our overall goal for growth was over the next five years. The next statement from him was, "We want to help you achieve that!"
From there it went from "Glad to meet you" to "Let's get to know each other better." He then shared with me that he had ideas that could help us achieve our corporate goal and help our members perform better in business at the same time.
When I explained, as I had with Company X, that our philosophy as a networking organization was one of mutual cooperation and that our belief was that anything really of value to either of us would take time, he completely got it.
Our relationship has developed organically, and we now have a strong strategic alliance with the organization based on getting to know each other and working with each other gradually.
I'm not sure how Company X is faring; I don't hear so much about their program anymore. I wonder why.
Looking back over two decades of building an international company, I can clearly see that no one person or company brought something to the table that launched my company to the next level. Instead, it was the cumulative effect of many people, many strategic alliances and many well-nurtured relationships that over time catapulted my business higher than ever imagined in the early days. Each contact, each opportunity to reach out to each other and each mutually-beneficial activity served as just one more spoke in the wheel as we rolled up the hill toward success.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com. I will try and return a reply within 24-48 hours.
Monday, January 4, 2010
You never know who they know
You Never Know Whom They Know
Don't think a gardener can be a referral source to the rich? Think again. Discounting even one potential networking opportunity can be disastrous.
By Ivan Misner | January 15, 2009
We don't walk around wearing signs displaying the names of everyone we know. It would probably shock you to learn about some of the influential people your best friend knows but hasn't told you about. You can't assume that your friend, acquaintance or referral partner doesn't have powerful contacts that can help you--or your business--in important ways.
Never underestimate the depth of the contact pool your fellow networkers are swimming in. There's a well-known story among referral networkers about a project management consultant who did business with large manufacturers and was asking for referrals. He was talking with a woman who owned a small gift-basket business, and she expressed interest in helping him. The consultant loftily informed her that he didn't see any possible way she could help him.
"Well, tell me what you do," she said.
"I go to manufacturers and help them with their processes. I'm sure you've never heard of any of the people I need to meet." He turned and walked away.
The gift-basket woman smiled and said nothing. She had a secret. Among her clients were several large manufacturing companies. She knew personally many executives at higher levels in these companies. Moreover, her father-in-law owned the largest manufacturing company in town. She was the best referral source the consultant could ever have, and he had rudely turned his back and walked away without realizing how much money he had left on the table. She smiled, but she wasn't going to be saying good things about him.
The value that you bring to a referral network or to a strategic alliance is directly related to the number of relationships you have and the quality of those relationships. In a typical referral-networking group of 20 to 40 people, the number of referrals that could be created, among all the possible contacts within one or two degrees of separation, is almost incalculable. And it doesn't take a corporate executive to connect you with another corporate executive, or a rich person to introduce you to another rich, influential person. That's not the way the world works anymore--and quite honestly, I'm not sure it ever was.
A friend of mine tells of a high-end property developer who was invited to a networking group's golf tournament as a guest to see what referral networking was all about. He came, but only because he loved golf. As a big-money developer, he "didn't need to network." He came to the awards dinner afterward only because his foursome won.
At the dinner, he happened to be seated next to a financial advisor who had grown wealthy through referral networking and become a property investor. Through conversation, the guest mentioned to the financial advisor that he was having trouble getting a bank loan on a big property deal. Hearing this, the financial advisor told him that he might be interested in investing. Within a few days, the two were negotiating a six-figure deal.
The moral of that story? Always pursue the networking opportunity of an event--you never know whom you're going to sit next to.
An associate of mine tells another great story about a financial advisor who received an enormous amount of business referred to him by a gardener on Cape Cod. Now, how can a gardener be a primary referral source for a financial advisor? Well, not only don't you know who they know, you also don't know how well they know who they know.
The gardener had an upscale clientele: big houses, rich people. He told the investment advisor that he would bring him some referrals. And the investment advisor thought: This person can't possibly help me. He's a digger in the dirt. He's a peon. What leverage, what credibility could this laborer have with his rich bosses?
Well, the gardener worked all summer long at these big houses. And who lived in these houses in the summer? The wives, of course. Who made the decisions about the gardens? That's right, the wives. So all summer long, the gardener was developing good professional relationships with the wives.
At the end of the summer, the gardener approached one of the wives and said, "Mrs. Gottbucks (not her real name, I hope), can I run something by you? You're doing well and I imagine you guys have a financial advisor--you know, an expert to help you with your investments. Can I ask you for some advice? See, I've managed to save up a bit of money, and there's this guy in my referral group who has a really unique way of packaging investments and getting a bigger return, and he says that by using article 32.3(e) in the tax code, I can save a lot on my taxes. He says he's saved dozens of clients thousands of dollars this way. Can you tell me if that sounds right? I suppose your financial advisor's saving you a lot of money that way, right?"
And the wife said, "Gee, I don't know. . .I'll have to check on that. By the way, what did you say your advisor's name is?"
Whether you're talking to a gift basket lady, financial advisor or gardener. . .remember, you never know who they know.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com. I usually reply back with 24 to 48 hours of reciept of request.
Don't think a gardener can be a referral source to the rich? Think again. Discounting even one potential networking opportunity can be disastrous.
By Ivan Misner | January 15, 2009
We don't walk around wearing signs displaying the names of everyone we know. It would probably shock you to learn about some of the influential people your best friend knows but hasn't told you about. You can't assume that your friend, acquaintance or referral partner doesn't have powerful contacts that can help you--or your business--in important ways.
Never underestimate the depth of the contact pool your fellow networkers are swimming in. There's a well-known story among referral networkers about a project management consultant who did business with large manufacturers and was asking for referrals. He was talking with a woman who owned a small gift-basket business, and she expressed interest in helping him. The consultant loftily informed her that he didn't see any possible way she could help him.
"Well, tell me what you do," she said.
"I go to manufacturers and help them with their processes. I'm sure you've never heard of any of the people I need to meet." He turned and walked away.
The gift-basket woman smiled and said nothing. She had a secret. Among her clients were several large manufacturing companies. She knew personally many executives at higher levels in these companies. Moreover, her father-in-law owned the largest manufacturing company in town. She was the best referral source the consultant could ever have, and he had rudely turned his back and walked away without realizing how much money he had left on the table. She smiled, but she wasn't going to be saying good things about him.
The value that you bring to a referral network or to a strategic alliance is directly related to the number of relationships you have and the quality of those relationships. In a typical referral-networking group of 20 to 40 people, the number of referrals that could be created, among all the possible contacts within one or two degrees of separation, is almost incalculable. And it doesn't take a corporate executive to connect you with another corporate executive, or a rich person to introduce you to another rich, influential person. That's not the way the world works anymore--and quite honestly, I'm not sure it ever was.
A friend of mine tells of a high-end property developer who was invited to a networking group's golf tournament as a guest to see what referral networking was all about. He came, but only because he loved golf. As a big-money developer, he "didn't need to network." He came to the awards dinner afterward only because his foursome won.
At the dinner, he happened to be seated next to a financial advisor who had grown wealthy through referral networking and become a property investor. Through conversation, the guest mentioned to the financial advisor that he was having trouble getting a bank loan on a big property deal. Hearing this, the financial advisor told him that he might be interested in investing. Within a few days, the two were negotiating a six-figure deal.
The moral of that story? Always pursue the networking opportunity of an event--you never know whom you're going to sit next to.
An associate of mine tells another great story about a financial advisor who received an enormous amount of business referred to him by a gardener on Cape Cod. Now, how can a gardener be a primary referral source for a financial advisor? Well, not only don't you know who they know, you also don't know how well they know who they know.
The gardener had an upscale clientele: big houses, rich people. He told the investment advisor that he would bring him some referrals. And the investment advisor thought: This person can't possibly help me. He's a digger in the dirt. He's a peon. What leverage, what credibility could this laborer have with his rich bosses?
Well, the gardener worked all summer long at these big houses. And who lived in these houses in the summer? The wives, of course. Who made the decisions about the gardens? That's right, the wives. So all summer long, the gardener was developing good professional relationships with the wives.
At the end of the summer, the gardener approached one of the wives and said, "Mrs. Gottbucks (not her real name, I hope), can I run something by you? You're doing well and I imagine you guys have a financial advisor--you know, an expert to help you with your investments. Can I ask you for some advice? See, I've managed to save up a bit of money, and there's this guy in my referral group who has a really unique way of packaging investments and getting a bigger return, and he says that by using article 32.3(e) in the tax code, I can save a lot on my taxes. He says he's saved dozens of clients thousands of dollars this way. Can you tell me if that sounds right? I suppose your financial advisor's saving you a lot of money that way, right?"
And the wife said, "Gee, I don't know. . .I'll have to check on that. By the way, what did you say your advisor's name is?"
Whether you're talking to a gift basket lady, financial advisor or gardener. . .remember, you never know who they know.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com. I usually reply back with 24 to 48 hours of reciept of request.
Friday, January 1, 2010
Happy New Year
Happy New Year
Now that 2009 has gone and 2010 has started, there are a few things you can do to make sure that you keep the records necessary for the 2010. Consider making a New Year's resolution to improve your recordkeeping. The suggestions are a combination for individuals as a small businesses.
#1 - Sales tax deductions - The sales tax deduction can be maximized by taking the actual expenditure versus the amount provided by the IRS. To take the deduction, you should maintain some type of recordkeeping system. The easiest way to do that, would be use envelopes (5 x 7 size or larger) and through all of your receipts for the month in to the envelope and at the end of the month add up all the sales tax on the receipts. Then keep a new envelope for the following month. Then at the end of the year, you simply add up the totals of the 12 envelopes and provide that to your tax preparer.
# 2 - Business deductions - Businesses need to keep their receipts to prove the deductions they claim on their tax return. For a small business, this sometimes can be tougher. Larger companies typically have staff necessary to use a more advance filing system. Basically, the idea is the same as what individuals should use for the sales tax. You can take your receipts and place them in the envelope. But instead of adding up the receipts, you should place a check register for the month and sort the receipts into check number order.
This is just a couple ideas for you.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com.
Now that 2009 has gone and 2010 has started, there are a few things you can do to make sure that you keep the records necessary for the 2010. Consider making a New Year's resolution to improve your recordkeeping. The suggestions are a combination for individuals as a small businesses.
#1 - Sales tax deductions - The sales tax deduction can be maximized by taking the actual expenditure versus the amount provided by the IRS. To take the deduction, you should maintain some type of recordkeeping system. The easiest way to do that, would be use envelopes (5 x 7 size or larger) and through all of your receipts for the month in to the envelope and at the end of the month add up all the sales tax on the receipts. Then keep a new envelope for the following month. Then at the end of the year, you simply add up the totals of the 12 envelopes and provide that to your tax preparer.
# 2 - Business deductions - Businesses need to keep their receipts to prove the deductions they claim on their tax return. For a small business, this sometimes can be tougher. Larger companies typically have staff necessary to use a more advance filing system. Basically, the idea is the same as what individuals should use for the sales tax. You can take your receipts and place them in the envelope. But instead of adding up the receipts, you should place a check register for the month and sort the receipts into check number order.
This is just a couple ideas for you.
As always if you have any questions or comments please email me at rondazaragoza@gmail.com.
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