Thursday, November 4, 2010

Mid-Year Tax Planning: Do You Need to Add an Entity?

Author:佚名 Source:none Hits:38 UpdateTime:2008-10-19 0:00:15


Do you need to add an entity to your tax structure?

This is such an important question for mid-year planning because knowing the right time to add an entity to your tax strategy can often save as much as $10,000 per year in taxes!

What entity should you consider adding to your tax structure?

Many of you want to know what entity you should consider adding to your tax structure. There are 2 levels of tax planning to consider in answering this question.

** Level #1 **

This level is for those business owners or investors who are either just starting their business or investment or are in the "ramp-up" phase of their business or investment. The ramp-up phase may mean you are a few months in to your new business or investment, or perhaps even a few years depending on the type of business or investment. The ramp-up phase means your business or investment has not yet produced a profit. Now, without profit, taxes are likely minimal or even non-existent, which is why the focus of this level is building a strong foundation for your tax structure so once there is profit, your tax structure is already in place to immediately minimize your taxes.

I often get asked the question "When should I form my entity for my business (or investment)?"

Many of the people I talk to are unsure if they should get their business up and going first, and then worry about the entity, or if they should have the entity in place even before starting the business or investment.

The answer to this depends somewhat on the type of business or investment, however, if I have to give an answer, I recommend setting up the entity first. This is because the right entity can grow and change with you as your business or investment grows and changes. Plus, outside of the tax benefits, many entities offer some level of asset protection which most people rank as an important planning factor.

So for those of you in Level #1, the entities to consider adding to your tax structure are:

Limited Liability Company (LLC). LLCs are the most flexible entity for tax purposes. LLCs can start off being taxed one way and then elect to be taxed differently. This means your LLC can adjust to the tax planning needs of your business or investment because your LLC can be taxed as a sole proprietorship, partnership, S corporation or C corporation. This flexibility is key in building a strong foundation for your tax structure and to minimize future taxes. S Corporation or Partnership. If your LLC will be formed in a state that assesses a separate tax on LLCs, then you should consider adding an S corporation or partnership instead of an LLC.

** Level #2 **

Level #2 is for those who already have a strong foundation in place for their tax strategy, and whose business or investment will soon be exiting the ramp-up phase or has already exited the ramp-up phase and is producing income. At Level #2, the focus is minimizing the tax liability created by your business or investment.

Best Methods to Solve Back Taxes

Author:佚名 Source:none Hits:50 UpdateTime:2008-10-19 0:00:40


When it comes to settling debts owed to the IRS there are 5 common solutions. It is best that you learn all available options and see what fits your particular back tax situation the best before taking action. Some important factors to consider before deciding what tax debt settlement method to use are your back tax amount owed, tax debt amount, the maximum amount you can afford to pay, the amount of assets (equity) you have, and if you would be able to pay amount in full if you just had more time. Below are the 5 most common methods to settling back taxes.

Offer in Compromise
This way allows you to compromise the tax amount owed for far less than the original amount owed. Whenever you hear the saying, "Settle for Pennies on the Dollar", this is the method that is used. It shouldn't come to a surprise that this is most difficult way to settle with the IRS. The IRS has strict requirements to qualify for an offer in compromise. The purpose of an offer in compromise is to find a compromised amount that works for the tax payer and the IRS. This means the IRS will only settle for less if you can prove it will cost them more to try to get the money from you. This is a good choice if your total assets is less than the amount of tax debt you owe.

Installment Agreement
An installment agreement is the most common method for individuals to settle their back taxes. You will be required to make monthly installment payments of a minimum amount. With an installment agreement you will still have to pay interest on the amounts owed plus and any penalties you may have received, so in the end up paying more than the original tax amount owed. An installment agreement should be used if payments cannot be made in full but you do have the ability to pay them off over time in smaller monthly payments.

Stall the IRS
If you need to buy more time to pay the total amount due this can easily by done by using your understanding of the IRS system to your advantage. When taxes are unpaid it begins the IRS automated notice system. The IRS send a series of automated letters before it begins collections. Typically the IRS sends an original assessment letter stating the amount of tax owed plus any interest and penalties then it will send a series of four CP Letters (Computer notices noted by a CP number in upper right). Know that you have about 3-6 months before IRS takes action if nothing is done, but you will receive interest and penalties on outstanding amounts. To get more time all you have to do is write a letter back to the IRS in response to the assessment notice or CP notices and say that you can't pay at the current time and say you would like a 45 day extension. When 45 days is up and you can't pay, just do it again. Just know that once you receive IRS notice CP-504, you will not have much more time until they take collection actions against you.

Currently Not Collectible
This way won't resolve your tax debts, but it put off collections. When you receive this status, the internal revenue services will check up yearly on you to see if you have the means to pay at another time. One thing to keep in mind here is that the statute of limitations is still running and the IRS has 10 years to collect back taxes from the year they were filed. If 10 years passes and they have not collected, you no longer owe that amount.

How the Hospitality Industry Cheats the Tax System

Author:佚名 Source:none Hits:99 UpdateTime:2008-10-19 0:01:12


Weddings. Galas. Corporate luncheons. Conferences. When big events roll through town, it can mean big money to the places that host them, but it can also mean that they have to hire temporary people to do the things that their staff would normally do like serving food, greeting guests,and mixing your drinks at the bar.

To meet these needs, many hotels, casinos, restaurants, and catering companies rely on staffing agencies when they need a few extra hands on deck. Staffing agency employees may also fill in for any staffing shortages, acting as bartenders, housekeepers, chefs, dishwashers, and hosts on short- or long-term assignments. And, even though the companies are a good idea, some of these staffing agencies are a continual, painful blemish on the hospitality industry due to their tax evasion policies.

And they're not just ripping off the IRS this tax evasion affects taxpayers, the entire hospitality industry, and, ultimately, the hospitality industry employees.

How tax evasion works

The tax evasion in the service and staffing industries is simple: by reporting rightful employees as "independent contractors" to the government, staffing agencies can avoid paying hefty employment taxes.

This means that the employees themselves end up footing the bill for all of their employment taxes, all the while forgoing regular employee benefits like health insurance coverage. Moreover, this tax evasion hurts the entire hospitality industry.

Staffing agencies who properly file and pay taxes on their employees can't keep their prices competitive. And the contracting institutions, like hotels, restaurants, and casinos, may find themselves in sticky legal liability situations.

And that's not to mention the toll this takes on the taxpayers: Tax evading staffing agencies withhold money from public funds while depleting the resources of government assistance programs.

It's important for all hospitality industry professionals to know exactly what they're getting when they hire a staffing agency. Certainly not all hospitality staffing agencies purposefully try to defraud the government. But the ones that do get away with it rely on the hazy, often confusing employment law question of where an employee stops and a contractor begins.

Contractor or Employee?

The IRS has very clear rules about properly classifying employees. Their website, www.irs.gov, has an entire section devoted to the problematic question of contract workers and employees, but the basic rundown is:

Independent Contractors

IRS rule: "An individual is an independent contractor if you, the person for whom the services are performed, have the right to control or direct only the result of the work and not the means and methods of accomplishing the result."

This means that an employer can't tell an independent contractor when to be at work, when to leave work, how to do his work, what to wear, etc. The employer can only control the deadline by which the independent contractor's work must be finished.

The IRS Has Made It Difficult For Your Accountant to Help You

The IRS Has Made It Difficult For Your Accountant to Help You

Author:佚名 Source:none Hits:125 UpdateTime:2008-10-19 0:01:15


Every business owner thinks he pays too much in taxes, and in reality, most actually do. These
days your accountant has to "play it safe". This is not reducing your tax bill. Many times a tax preparers work on a typical return is subject to interpretations of the tax code. New legislation may force preparers who hope to lower a clients tax bill to be less aggressive with respect to these interpretations, or else they may risk substantially increased penalties. Furthermore, if a tax preparers client insists on an aggressive deduction, the preparer may include a form explaining the circumstances. This could eliminate
the potential preparer penalty, but it is a certain red flag for the IRS.
This should anger taxpayers who feel strongly about particular deductions. Whats more, these penalties do not apply to taxpayers preparing their own returns. This could prompt a taxpayer to tell preparer: "who needs you; Ill do it myself ". The remainder of this article explains why your accountant is reluctant
to be aggressive anymore, and is less likely to give you the benefit of the doubt on tax deductions.
The new law alters the standard from a "realistic possibility" that a preparers position will be sustained to a "more likely than not" standard, or more than 50% likelihood. Instead of paying just $250 if an interpretation is disallowed, the preparer will now be penalized the greater of $1000 or half the income derived by the preparer. Thus, if a preparer charges $500 to do a routine 1040, he or she faces losing the
income on two such returns, and if "willful or reckless conduct" is found, the penalty jumps from $1000 to the greater of $5000 or half the income derived by the tax preparer. But if the taxpayer prepares
his or her own return, these "crimes" may ring absolutely no penalty. another new wrinkle not sitting well
with preparers expands these penalties beyond income tax returns to other tax work: estate & gift tax returns, excise tax returns, exempt organization returns, and employment tax returns.
If an accountant allows a taxpayer to deduct what the accountant may think is a listed transaction, the accountant has to file a form with the IRS to alleviate a potential $200,000 penalty to the accountant.
This form is likely to get the business owner audited. So what does the business owner do? He can forget about the deduction, prepare his own return, or he can retain an accountant that is not afraid to fight with the IRS. Unfortunately, all of these options are difficult or worse. The tax code is complex and very few
accountants understand most of it. And the IRS has recently made the accountant a policeman. Most accountants are honest, knowledgeable and cautious. They try to do what is best for their clients, but
the IRS has recently made that almost impossible. Also, every year, the tax laws are changed to one extent or another, and accountants are constantly challenged to remain current, knowledgeable, and proficient.
In light of this, you may want to test your accountants knowledge. You may want to ask him the following questions:
1Why havent I been using a 412(e)(3)
plan or a captive insurance company
to reduce my taxes and other expenses?

Wednesday, November 3, 2010

Boosting the brain development trends in children

Author:佚名 Source:none Hits:83 UpdateTime:2008-10-18 23:20:52


As children grow, they form their own way of thinking and tend to develop their own sets of behaviours and habits. Different children tend to develop in a different manner. This could be mainly due to the way parents nurture their children. For instance, well cultured children would show better manners than those who have not enjoyed from a sound parental guidance. As a matter of fact, a great way for parents to help their children is to help them in improving their mental strengths. First of all, books are fine tools to power up the mental characteristics of children. So, parents can persuade their children to read a lot of books. Today, one may easily find books especially designed for children. Some books might as well feature word games such as crosswords or word searches. These could be sound exercises to help children enhance their focus as they normally have to think before giving out the answer. Children who perform such tasks on a regular basis end up having a good logical thinking after a while.

Furthermore, parents could make their children undergo memory exercises to increase their brain development. As such, memory exercises may be considered as the easiest means to allow children develop their intellect. Activities consist of making children write, read and remember their names. Children are as well made to bear in mind their addresses and contact information. In addition to, several memory improving exercises exist. These include remembering poems and songs among others. Developing the memory since a young age can vastly aid children to grasp information easily. This will also help children at school as they will need good memory when doing Mathematics or Science.

Moreover, another remarkable activity to develop the children mind may be to make them use their least utilized hand for writing or even drawing purposes. With this type of exercise done at regular intervals, children may then be able to widen the other half of their brain. In time, this will be a good thing for children as they would start to use both sides of their brain to carry out a task, such as homework or Maths questions. By doing this, children would effectively succeed to develop the most vital part of their body.

Also, books remain one of the best ways to enhance and boost the way children learn. Books, if read most of the times, would inevitably allow children to establish fine language and communication skills. Encouraging children to read more and more books could be an advantage as nowadays normal education includes the manipulation of a computer. Computers are being used practically everywhere. You find them in hospitals, offices, schools and in most other places. This proves that children should get acquainted to technology since an early age to prevent the arousal of future dilemmas.

With the advent of the Internet, computers have become even more important. Therefore, it remains of paramount importance that children know how to access the invaluable information that are obtainable online.

Childhood Obesity as a Result of TV and Video Games

Author:佚名 Source:none Hits:132 UpdateTime:2008-10-18 23:20:57


Obesity: it's every parent's worst nightmare. They cringe at the suggestion that perhaps they have done something wrong as guardians. Did they feed her too much? Not pay attention to the amount of video games that were played? These questions play a major role in today's worries, as childhood obesity is sweeping the nation. Fortunately, there are ways to get your child back on track and decrease the chance of obesity. It isnt too late to intervene.

Limit your childs "couch potato" intake. Sure, we all enjoy watching a television show or perhaps a good video game. However, everything should be in moderation. Allow your child to watch one hour of television or one hour of video game playing. This will still give them freedom to enjoy, but will limit their habit. Are they complaining of boredom? There are plenty of other alternatives - sign them up for an active hobby. Perhaps horseback riding, swimming or even basketball. As long as they are getting exercise, you are decreasing the chances of obesity.

2. While most video games have a bad reputation, there are some that actually increase exercise. Nintendo Wii has developed Wii Sports to help fight obesity. From tennis to boxing and even bowling, these games are intended to get you off your couch and start moving. Have your child focus on these and they may just want to join a real-life tennis or baseball team.

3. Forget the junk food. While most of us are too busy to cook elaborate meals, this is no excuse not to find a healthy option. Make sure your child has a balanced diet - filled with fruit, vegetables, dairy and whole grains. If you are on the run, try cooking whole wheat pasta the night before. How about Lean Cuisine meals or a bag of fruit to snack on? If you teach your child the right way to eat early on, chances are they will continue eating well. As a result, diabetes and obesity could stay at bay.

Despite the fact that we all live fast paced lives, we can still take the time to change the path our children are on. Turn off the TV and focus on what will motivate your child the most. In many cases, the Wii Sports video game does the trick. It may not be as beneficial as a jog or bike ride, but it is pointing them in the right direction. After all, anything that prevents obesity is a positive step forward. Baby steps are just the beginning.

Kids designer wears trends

Author:佚名 Source:none Hits:126 UpdateTime:2008-10-18 23:21:23


Designer wear is no longer the exclusive domain of adults. These days you can find many stores selling designer wear exclusively meant for children. In todays fashion conscious word, most of parents also feel that if they can choose to wear designer wear, so too can their children. Fashion designers on their part have jumped on the bandwagon and churning out a wide variety of designer kids wear these days. Most of the leading brands such as Dolce & Gabbana, Tory Burch, American Apparel and Little Marc, to mention only some, have a separate collection of kids wear. A simple online search will help you find out the latest offering from such leading brands when it comes to kids wear. From baby shoes to designer baby wear and special occasion dresses such as christening gowns, you can find a whole lot of designer wear meant solely for pre-teens being sold these days. Fashionable parents around the world are reaching out for edgy as well as stylish clothes for their kids these days. Gone are the days when children used to dress up in dull traditional clothes. An entire assortment of kids wear is available these days in a wide range of colors, shapes, sizes and designs. Bright and happy colors seem to be the flavor of the season. A little girl in a striped shirt and with a bright red trouser and a floral pink ribbon would always look cute and brighten up any day.

Pink is another color that parents have traditionally preferred for their girls. This feminine color can help in creating that delicate and soft girly look in young girls. Black is another color that looks good on kids. In fact one can find a wide variety of designer kids wear where black is the predominant color.

Amusing t-shirts are also a hit with kids these days. In fact t-shirts have been popular as part of kids wardrobe for a very long time now. Gone are the boring tees which have been replaced by the latest ones which come with creative and yet at the same time amusing graffiti these days.

Kids designer wear is widely available these days at most of the leading designer wear stores. You can also find several designer wear retail outlets which deal only with kids wear. Always make sure that you purchase designer kids wear from an authorized showroom. The internet is another place where you can shop for kids designer wear. You can also find a whole lot of kids designer accessories too being sold at online stores nowadays. The choice available is so large over the internet that you can buy anything from baby shoes to designer baby wear with a few clicks of the mouse these days.

While shopping for designer kids wear you must make sure that you give the correct measurement. Remember designer wear is expensive and buying ill fitting clothes for your children can mean unnecessary waste of money. You should therefore consider all these aspects when shopping for designer kids wear.