July 6, 2020

Welcome To My New Blog

Tonight is the Night! It is now or never to start a blog. At the moment, I just don’t know yet what the topics will be. My interests are so diverse and I really do not want to pin it down to a theme or a specific industry. I believe that I am a smart person that loves to help people of all walks of life. Often indeed friends or coworkers stop by to hear my opinion on a current issue or a personal matter. I have an open mind set and am curious about many aspects of life and welcome sincere feedback.

In short, you just have to come back once in-a-while and see what is on my mind and keeping me busy.

New year. New You. What’s your vision for 2020 and beyond?

A new beginning often makes us feel excited and curious. It can be the start of a new job, a new school, a new city, or a new chapter in life like getting married, having the first child, or maybe retiring from work. Besides these life events, the beginning of a New Year can give similar feelings and expectations.

Especially, if it is the year 2020, and it is the start of a new decade. This time the possibility of long-term focus and vision for the future is more appealing as any other year that was not as big in calendar spans. Depending where you are in your life, you might be inclined to use this significant date in time to think of a different future that would make life more fulfilling, more prosperous, more connected.

Many people have a ritual that guides them every year in planning for the year(s) ahead. Usually it includes looking back on what happened in the past year. Did you achieve all the goals you set? Which ones did not get the results you wanted and why was that? What were some obstacles you had to overcome? How did you do this? What other wins can you celebrate? Answering all these questions will help in thinking of the goals and resolutions for the coming year.

Often people forget that it might take more time to accomplish a goal. For example, if you want to lose a substantial amount of weight, the time to get to the target weight could take longer as one year. However, if you are half way at the end of the year, you can be proud of the determination to stay with the goal you set on January 1.

What’s your vision for 2020?

So, just to clarify, a resolution is a firm decision to do or not do something. Most of the time, New Year’s resolutions are more like goals. The definition of a goal is something a person aims for, ambition or effort to achieve a specific result.

Using the weight loss example, to lose one hundred pounds is a goal. The decision to not eat out for lunch but brownbag healthy salad is a resolution. Same goes for the resolution to walk every day 30 minutes. Both resolutions will help you achieve your goal. However, the intention to lose weight by itself will not result in the expected outcome if the steps to get there are missing.

The date of January 1 makes it easy to track your progress. But if you don’t like the attention for this date to reflect and make plans, any day is fine. Choose your birth date, or the date school starts or any big day in your life. If you think it is all rubbish to do this, I’m fairly sure that at some time in your life and in the future, you will set intentions to aim for something.

As shown above, just setting goals is not enough. To use a famous quote: “A goal without a plan is just a wish”. Hence, write them down. That’s step one.

Next, for each of them, plan a date/year you want to achieve this goal considering how complicated, necessary resources, or how challenging the goal is. Examples: A new job in 6 months, or buy my dream house in 2 years.

Now, for every goal start with the end in mind and work backwards to get all the steps to get there. For the job accept the contract is the last step, but the interview is probably a bigger topic. Take a look at the qualifications needed. Do you need to take a class? Write your resume. Off course there are many more smaller action items to handle.

After completing this last step life might look daunting and hard to manage. The solution: taking one step at the time for only one goal. Select one that can be accomplished this year and start to take action for the first step. For the other objectives, think of something you can do right away to get the process started. But don’t stop here. Use your calendar to plan each action step ahead for the year so you don’t lose sight of what you want to accomplish.

If you are still unsure if this is something you want to do, another way to think about your goals and be reminded of them constantly, is to create a vision board. Visualizing the experiences you want to feel, the lifestyle you want, the way you want to be, and using images, words and quotes have the same purpose: focus and attention on what is important to you and how you can direct energy and efforts in making it happen.

There’s one more thing to be successful: Commitment. Doing whatever it takes to attain the goal you wrote down. No matter how long it takes. No matter how often you stumble and get up again.  Belief, courage and focus are three ingredients to pursue the road to successful reaching a goal.

What to do now?

If you are a writer and want to dig deep in setting goals, get yourself a nice journal and start on page one.

If you are a creative person and rather make the vision board, here is a link to a 5-day challenge on “How to create a vision board” (recorded videos).

For 2020 or the new decade, what is your most important goal? For me, it is to retire from my job by the end of this year. Drop your number one goal as a comment below. It will tell the universe that you want to achieve it.

How to Enjoy Christmas Alone.

This year, like last year, and the years before, millions of people will be celebrating this Christian Holiday alone. The general opinion is that Christmas should be spend with others: family, friends. But just being by yourself is no reason to feel sad or lonely. Because of my work in the hotel industry I often worked during those days. If your spouse has a job in a hospital, is a pilot or police agent, he or she could be working too.

I love this time of the year as the decorations, festivities and traditions create experiences that make it very special. I was raised in a catholic family and I cherish the memories of cold winter days going to church and hearing the youth choir sing new and traditional carols. Nowadays, I do not worship every week, but for Christmas I will spend time at church and be warmed by the decoration and hymns/songs for this occasion. It is a place I can go and meet other friendly people who also enjoy the mesmerizing feeling of the Christmas story.

Delicious cup of tea…

The Christmas tradition is in many cultures a family oriented gathering. I always enjoyed playing games with my siblings or building jigsaw puzzles with my dad. However, I can solo play Mahjong, patience or solitaire card game or do crossword puzzles. Depending on the weather I might stay home and read a book that I got way back, and never had time to read.

Another worthwhile custom is watching movies. The television channels for sure offer a large selection of Christmas movies, an other option is to order your favorite flick from Netflix. But maybe you are tired of sitting home and want to see a real movie. All cinemas offer the latest films, and attending the matinee showing is perfectly fine to do alone. Don’t be surprised here – there are many people who had the same idea because not everybody is brought up in Christian beliefs.

Nowadays I live in a warmer climate, so I’m thinking of outdoor activities that will get me moving. I can go for a walk at the beach, in the park, with the dog, and feel the sun or the breeze on my face. Connecting with nature is a great way to get a clear head and make plans for what’s next (2020 or an upcoming life event). I even could do some light upkeep of my garden and pull some weeds.

These are a few ideas how I prefer to spend this special day. Even if you have a different faith, for sure you can find things to do that you like without feeling lonely. Think of something that you normally don’t make time for and treat it as a treasured favor for yourself. And to add excitement, establish a ritual specifically to happen every Christmas day to come.

What is Christmas without having some of the delicious famous food dishes from the country your from or where you live right now. If you don’t like to cook you can pamper yourself and find fresh locally made meals at most supermarkets. If you know other people who are alone this day, you could organize a potluck dinner and have good company.

Lastly, this is the perfect day to get in touch with your family and friends and talk with them about what they mean to you. It’s great to hear their voice, but even better to see them (Skype, WhatsApp, Facebook)! It is in the spirit of this occasion to connect and build relationships.

I could go on and on and on. It all boils down to how you think this day should be. It is in your mind to decide that this celebratory day is special and that you will feel this no matter what you do. What are some activities you do when you are all by yourself on Christmas Holiday? Comment below so I can learn and expand my possibilities for next year.

How to do your tax return for free!

FREE is good! Especially, if it is doing something you have to do anyway, like Income Tax returns. Wait, it even gets better, because often you actually make money doing it!

I hope everybody takes advantage of these free services to prepare and file your income tax return, because it is not proven that a paid service does a better job and gets you a bigger refund.

So what am I talking about? There are several ways to have a tax educated person prepare your federal income tax return at no cost and file it for you at no cost! And if you file an honest return you could get a refund if you paid too much in withholding taxes in 2017.

Here are some options of organizations and companies that will file certain  income tax returns for free:

VITA program: This Volunteer Income Tax Assistance program is monitored and organized by the IRS with local organizations. At several sites within the city volunteers that have completed the special course and are certified can help families, disabled persons and elderly people that have less than $54,000 income in 2017 to prepare a basic return for free, and file it electronically with the IRS.

Some places even have volunteers that speak Spanish or Creole. Here is a list of things to bring:

  • Proof of identification (photo ID)
  • Social Security cards for you, your spouse and dependents 
  • An Individual Taxpayer Identification Number (ITIN) assignment letter may be substituted for you, your spouse and your dependents if you do not have a Social Security number
  • Proof of foreign status, if applying for an ITIN
  • Birth dates for you, your spouse and dependents on the tax return
  • Wage and earning statements (Form W-2, W-2G, 1099-R,1099-Misc) from all employers
  • Interest and dividend statements from banks (Forms 1099)
  • Health Insurance Exemption Certificate, if received
  • A copy of last year’s federal and state returns, if available
  • Proof of bank account routing and account numbers for direct deposit such as a blank check
  • To file taxes electronically on a married-filing-joint tax return, both spouses must be present to sign the required forms
  • Total paid for daycare provider and the daycare provider’s tax identifying number such as their Social Security number or business Employer Identification Number
  • Forms 1095-A, B and C, Health Coverage Statements
  • Copies of income transcripts from IRS and state, if applicable

Adding up all numbers to get the biggest refund possible!

 

The AARP has similar tax preparation sites for people over 50, but the volunteers at these sites are happy to help other people that qualify too. However, some of these sites only do income tax returns by appointment only. You can find locations at aarp.org/findtaxhelp or call 888-227-7669

H&R Block is also offering a free service if you file the simple tax return form 1040EZ. This offer is available in the offices till February 28, 2018. It is a good way to file if you have less than $100,000 a year in wages and tips, no dependents and do not itemize deductions. There will be additional fees if you have extra forms.

As you can see there are many possibilities if you like to have an expert help you to prepare the 2017 income tax return.

 

FREE File Software program

For many people that do not have a lot of deductions and the income is from a job or unemployment the IRS has several companies listed that offer FREE online filing programs. These are software programs that guide you through the filing by asking questions. You can use these offers if you make less than $66,000 a year. Here is a link to the website https://apps.irs.gov/app/freeFile/jsp/index.jsp.

Read the specific details for your state as not all providers offer state returns in all states.

https://www.irs.gov/pub/irs-utl/How to Free File Infographic_508 FINAL.pdf

Infographic IRS.gov

These are great ways to file your tax return, however if you have a lot of itemized deductions or do need to file Schedule C for a business that you do part time, maybe see a professional tax preparer.

 

Two tips for filing 2017 annual return

  1. Itemizing your expenses will be harder next year. Big advantage for deductions on schedule A this year is that the percentage for qualified medical expenses has dropped from 10 % to 7.5 % of your Adjusted Gross Income. See a list of expenses that qualify here: https://www.irs.gov/pub/irs-pdf/p502.pdf
  2. Last date to file your return is April 17, 2018. This is because of a public holiday in Washington, DC that falls on Monday April 16.

If you have questions regarding filing your taxes this year, feel free to reach out to me. I hope that this information is helpful for you and helps you save money on the annual compliance of filing an income tax return.

If the above options do not work for you because you are a business owner and need to file schedule C, I have a webinar coming up soon. Click here to email me for the next date of presenting the webinar “Benefits of being your own Boss”.

 

Business Direction: 3 Ways Even the Oldest Industries Keep up to Date

Have you ever stopped to ask yourself the difference between a business who can’t seem to get out of survival mode and the confident entrepreneurs who lead growing enterprises?  It’s a question any aspiring business person should be asking themselves. Every successful business persons have clear marketing strategies that make everything they do a tad more effective.

 

 

 

Many old businesses out there give too much focus to routine marketing tactics such as blogging, optimizing their landing page, advertising, tweeting, sending email et cetera and forget to come up with a proper strategy.  Take the time to do some research on your market, your own offerings, and any research or scholarly information that can offer insight into what you might improve. In business, financial success is a directly proportional to sales.

For these tactics to bear fruit, a business must work on the decisions that will improve their performance. Simply put, a strategy is the decisions that you need to make your marketing tactics give better results. A marketing strategy is a basis of:

  • The creation of brand awareness.
  • Generating interest in your brand.
  • Making new sales.
  • Keeping your customers engaged.

No business can attain real financial success without a proper marketing strategy. For it to be successful, many factors need to be considered in the creation of a strategy. Here are five important decisions that old businesses need to evaluate

Who is Your Target Customer?

Come up with a narrowly defined set of target customers. Who will you be serving as your customer? Clearly defining a narrow set of customers should be your first order of business. You can’t do effective marketing sans this step, and yes, it may mean saying no to some potential customers who might buy from you but ultimately distract from your goals. You will need to master a high level of discipline for that. Never forget your internal customers: your staff. Ensure that the working conditions are safe, sanitary, and provide an atmosphere for productivity and innovation.

What Unique Benefits Are You Offering?

Establish the unique benefit that your business offers to clients. Does whatever you are selling — product or service — deliver the benefits that your customers are really looking for? That should be the center of your business. If the answer is no, you have some work to do to improve your product/service.

Take the time to do some research on your market, your own offerings, and any research or scholarly information that can offer insight into what you might improve. For example, if your company provides industrial plumbing supplies, look for resources like infographics on advanced water treatment, statistics on modern construction, etc. that might reveal a product/market/service you’re missing.

Know Your Competition

Understand who your real competition is and study them carefully. If someone (a potential customer) has a problem and is looking for a solution, they will be on the lookout for options to compare against what you offer. Your product or service needs to be properly differentiated from your competition. For you to be able to differentiate your products, you need to understand who your competition is.

Come up with a brand that’s clearly different from your competition. Picking out your competition is one thing, and making sure that your product or service clearly stands out from theirs’ is another. If done right, it’s a very simple process. List down your plans and rank them in terms of priority on your homepage. Avoid overcomplicating things – people just need to know one or two things to make a decision.

The final part of knowing your competition comes from your own capacity to understand your market. If your outdated degree, or lack thereof, is impeding your progress, take it upon yourself to educate yourself. Just by searching “MBA no GMAT online” you can find programs that can improve your knowledge on your own time without having to take the extra time traveling to and from a school.

Running a successful business doesn’t have to be hard. If you have a successful marketing strategy — regardless of what you are selling — you will be successful. And that’s the only way old industries can keep up with this fast-paced market.

http://www.selfgrowth.com/articles/business-direction-3-ways-even-the-oldest-industries-keep-up-to-date

By: Hannah Whittenly

 

Click Here: http://www.marialucassenhq.com/contact/ To request free consultation 

Zero Doubt and Zero Resistance!

Have you been watching all the webinars and videos about how to achieve your goals that have been offered by all the Network Marketing Experts and Personal Development Coaches in the past three or four weeks? I did. Some evenings I had signed up for two or three, counting that they all would have a replay or encore session. Many had great tips and practical action steps to get started. However, writing them down, is the easy part. Creating your game plan for 2016 is not an activity that can be accomplished in half an hour, but needs some in-depth and realistic view at those areas that you want to get better results in the year ahead.

Running: Going forward at a fast speed

Running: Going forward at a fast speed

Mindset

This blog post is not about how to create a results driven game plan, but more about your attitude and expectations about yourself to be able to work diligently and consistently on those activities that move you in the right direction. What is the biggest obstacle that will block your road to success?

It is human nature to doubt the outcome of a decision to become reality. The opposite of doubt is belief. When you make a choice to do something you either think it will happen, you belief you can do it, or you doubt that it will work and you are not committed to give it your 100%. Some of us are naturally positive thinkers and have a clear vision of achieving their plans. But the majority of us, has learned in life that not everything will happen the way you want it.

This is a conundrum that can temper any action you take because you look at each step from all angles and then let some weak excuse determine if you’ll do it or not. Why is it that some are achieving anything they want and others struggle? It all comes down to stories you have made up throughout your life that keep popping up any time you need to take action. You know which ones I mean.

 

Solution

There is really only one solution: ignore all the BS that you have been feeding yourself and step up! Get over the feel-good-feeling of lamenting to yourself why you are living a mediocre lifestyle and your to-do-list that still shows tasks from two years ago. It serves you to think that you cannot become the person you were destined to be. You prefer the comfort of your family, friends and the job you have for the last 5 or 10 years blaming the economy for not changing. However, a coin has 2 sides and with everything you do or not do, you make a choice that affects the rest of your life.

Change is not easy. Small changes can have a big effect over time. Creating a new habit asks for determination and discipline. It is like learning to ride a bike. First you need someone to hold it, then you are left by yourself and it works. And when you get better at keeping it in motion, it becomes fun and you enjoy the ride! It takes courage to take a new direction.  For those who have a big goal to accomplish consider that the journey to get there is part of the process. The road can have bents and bumps, but at the end you know your destination. Have faith and trust your guts that you were created for doing something significant.

 

Dare to be you!

For me, I know where I’m going. I have not everything figured out yet, and probably will have to adjust the course. My game plan for the year is broken down in monthly action plans. Each month I will evaluate what I completed and amend the plan for next month accordingly. Writing this blog post has let me express how I think about my own habits and feelings. And that I really am a coward that does not walk what I talk and preach about. Something has to change!

Indeed, the only way to leave a legacy and to fulfill my mission in this life is to do whatever it takes. Therefore, my 2016 motto: Be Committed, Be Confident, Be Consistent! This quote from Franklin D. Roosevelt says it best!

Zero Doubt!

Thus I declare going forward:

Zero Doubt! Zero Resistance!

Time To Chose A Health Insurance Plan Is Now!

November 1, 2015 was the end of daylight saving time, but on that day open enrollment period for Health Insurance started! With all the festivities happening in the last two months of the year, it is wise to look at this important matter as-soon-as possible.

Who?

People that have a job should get the information for enrollment from their employer. Each company that has more than 50 full time workers needs to offer affordable health insurance. If you want to shop for health insurance on the state’s health insurance exchanges you are not eligible for the premium subsidy.

For those persons that are self-employed or do not work, you do need to buy health insurance for 2016. There are 38 states that use the federal online insurance marketplace at HealthCare.gov. The other states have their own website that offer various plans in all 4 tiers. Besides the official marketplace websites, many insurance agents, non-profit organizations and community centers are offering assistance to consumers that want to buy insurance.

Staying Healthy Through Preventive Care!

Staying Healthy Through Preventive Care!

When?

First, here are some important dates to remember:

  • Enrollment between 11/01/2015 and 12/15/2015                          coverage effective 01/01/2016
  • Enrollment between 12/16/2015 and 01/15/2016                         coverage effective 02/01/2016
  • Enrollment between 01/16/2016 and 01/31/2016                         coverage effective 03/01/2016

What?

Quite a few states have re-designed their website to make the process easier and better understandable for consumers. All states and their health insurance marketplace have to offer a basic plan that just covers the necessities. These plans often have the lowest monthly premium. But be aware that the deductible for these plans usually is high. People that are very healthy and do not have medical conditions that require many doctor’s visits or expensive treatment can benefit greatly from this kind of plan.

Many families with children, or persons that have a history of health issues, are better off selecting a plan from the next tier. The premiums are higher, but the deductible and out-of-pocket expenses will be lower. On top of that, the government offers a subsidy for plans in this tier only that is based on your household income, number of persons and the cost of a Silver Plan in your area. Below is a table that shows the income limits for 2016.

Income Levels For Subsidy in 2016.

Income Levels For Subsidy in 2016.

How?

Now, most marketplaces have new tools that will make comparing and shopping easier. Calculators can help in estimating total cost of health plans offered by factoring in premiums, copay and other out-of-pocket expenses and deductibles. It is important to know your family’s health situation and future medical requirements to find the best plan offered. That could mean that you might need to change to a different carrier to get the best deal.

When looking at the different plans keep the following in mind:

  • Check that your medication is covered and find out what the cost will be. You find this information on the insurer’s website or call their customer service.
  • Look at this year’ and last year’s out of pocket expenses to and see what amount is not covered by the insurance. The maximum amount can be more than $6,000 for an individual. Therefore, it is prudent to think of a way how to pay for any medical emergency.
  • Check that your doctor is in the insurer’s network next year. Choosing care and treatment from a doctor and facility from the plan’s list of preferred providers can help save money.
  • Consider contributing to a Health Savings Account (HSA) if the deductible is more than $1,300. For family plans the minimum is $2,600. You can use the savings for medical expenses tax free. All contributions stay with you, even if you change plans. Another benefit is that the contributions are tax deductible when filing your annual income tax return.
  • Under the Affordable Care Act, many preventive health care services are free.  The website healthcare.gov lists all preventive care services by group such as adult, women and children. Visits to certain doctors, screenings for cholesterol, diabetes (type 2) or Hepatitis B are included. Women can get free mammograms and FDA approved contraceptives. Also, many vaccinations for adults and children are free when provided by a doctor or other provider in the plan’s network. This is true even if you have not yet reached the deductible. Check out the information on the website as some services are limited to certain age groups.

You have many options to enroll. Either online through the federal or the state market place, or an insurance agency website. You also can go in person to enroll at a community center, church or insurance agent that offer free assistance. I advise you to not just think about what happened last year when you and your family were healthy. Instead, I urge you to be responsible and to consider “what if I get sick?”

Health Care is a serious matter for you and your family. Especially, if you have children, you can’t afford to have no insurance. You owe it to those that depend on you and cannot make that decision to do what is best for them and you. It is hard to take care of toddlers or children when you are sick yourself.

If you got value from the information in my post and it did help you making a decision on this important matter, l would like to hear from you. Leave a comment below and share the post with others you know that might benefit reading about this subject.

Everyone loves paying less!

Everyone loves paying less! Taking deductions for expenses when completing your tax return gives anybody a good feeling. Since we all use a car to get from A to B, this post will give you a basic understanding of how you can profit from this provision in the US tax code as-well-as some practical tips that ensure you have adequate backup.

There are 3 fundamental decisions to make:

1. First question each entrepreneur, small business owner or network marketer should answer is if the vehicle is solely used for business. That means that you do not use the car to quickly run an errand or to drop your child off at a football practice. If the car is 100% used for business purpose all expenses are deductible. However, if you use the car for both personal and business activities you can only deduct the cost of business related trips.

2. Another choice to make is which calculation method to use. For most tax filers taking the easy route, and just using the standard mileage rate to calculate your deduction, is the best option. Just be sure to use the correct amount for the year, because there is a different rate for a car owned and a car leased. Yet, for many business owners who use their automobile exclusively for work, the use of actual cost is often more beneficial. This selection allows tax payers to include the following expenses: gas, oil changes, repairs, car washes, tires, car insurance, annual registration fees, license (renewal) fees, and depreciation if you own the car, or lease payments.

3. Persons that have more than one job then need to determine the principal place of work. Where is the location that you conduct most of your occupation? Factors to consider are time and activities performed, and how much you earn. This job will be considered your main or principal place.

 

Make sure you add this  to your expense log!

Make sure you add this to your expense log!

Do you have a job?

People that have a part time or full time job at an office, store, school, etc., and whose income is more than the revenue earned in the part time business, the commute from home to the office or other work location is not tax deductible. Only if the work site location is temporary, out of the metropolitan area, and does not last longer than a year, the drive to and from this place are tax deductible. Persons that have more than one job often don’t know that they can deduct the cost for going from the first job to the second job on the same day.

 

Are you self-employed?

When you work out of a home office you can deduct any trip you make that has a business purpose such as a client visit in his office, a sales meeting at a restaurant, or attending a workshop related to your work.  Just to be clear, your home is the place where you actually live.

The above tax rules are only applicable for people that own their car. When you lease your car, or when your employer provides a car the tax regulations get more complicated if it is used for both personal and business activities. I will not explain these specific rulings in this blog post because I only wanted to paint the big picture.

Take action!

To get you started collecting evidence for tax inquiries you need to record all trips you make. Either you spend a few dollars and buy an auto mileage log book at Office Depot, create your own Excel spreadsheet, or download an app such as MileIQ , Triplog and MileagePad. Many apps have a basic free version or free trial, and then charge a monthly fee – some as low as $1 a month. Maybe it is time to use modern technology and save some time and effort.

I hope the above information is useful to you. I’m planning more blog posts on tax deductions and maybe I do a few videos on this subject too in the next few months. Help me become better in serving your tax questions or business matters by commenting below. Feel free to send me a message if you have a question regarding transportation deductions. And if you prefer to use electronic documentation click here to download my mileage log.

 

Be Better Next Time Around!

It’s done! Finally, filed my taxes just in time for the deadline of April 15. This year, I got upset with myself as it took way too much time to get it done. It was not the actually online completion of the interview return preparation, but getting all my backup documents ready to enter in the software that caused my mood to be dismayed.

Check off what's done!

Check off what’s done!

Many people that know me think I’m organized and have everything neatly filed away. Until a certain extent that is correct. I have a filing system for all paper statements and invoices. I also have a filing system on my computer, but I have to admit that they are not very effective if you print everything at the time that you file the income tax return.

 

Keep For 3 Years

Since you have to keep receipts, statements, invoices and other documents to support your income and your expenses for at least 3 years, there is a lot of paper to keep. The IRS prefers hard copies of the supporting documents. If you, like me, are a single business owner it is easier to keep the required paper backup for Schedule C details. However, if you have staff that you pay or a production manufacturing, inventory and other real store features, you will use an electronic accounting system that will produce reports.  This does not mean that you than can shred all invoices and other papers that are important for tax evidence.

An alternative to keeping paper copies is to scan all receipts, tickets, checks, etc. and keep the supporting materials in digital format. This works well if you do regular back-up of the computer files and keep them in a safe location. Whatever medium you use, it needs to be able to produce any document that the IRS asks for in case of an audit. The IRS has the right to go back for 3 years or longer depending on the reason for the investigation. More details can be found in the following publications:

Starting a Business and Keeping Records

Travel, Entertainment, Gift and Car Expenses

 

Organize Your Stuff

This weekend I explored some online suggestions for implanting a more effective system. Here is what I found in my research of this topic. It is important to look at the significance of the document. Original certificates (birth, marriage, citizenship, school, etc.) need to be in a safe place. This also applies to insurance documents.  Best is to scan them first, so you have a backup that is always accessible, and then put them in a fireproof safe at your house or in a lock box at your bank.

Next, all statements from utilities, decide to go paperless, so you can access them on the website and download into a folder either on your computer or in the cloud. Statements from bank accounts, credit cards, or retirement accounts can be handled in similar fashion. However, if you have big ticket items that have a warranty or payments for large incidental events such as a wedding, a hard copy can provide a proof of payment that you can keep with the invoice.

To go digital, might be a bit of work to set it all up, however, this is probably the easy part. If you rather have paper copies, you need to set up a large filing box or a drawer file cabinet that can keep hanging folders. Store the files that you frequently use in the front and those that keep important records for occasional need more in the back.

What about all those receipts that you need to keep as supporting documents? If you do not want to keep them in a shoe box, then you might want to sort them in the different expenses that are reported on schedule C. Here is a list of expense categories that an entrepreneur, small business owner or internet marketer can deduct. Depending on the kind of business and the volume of transactions you can have all or just a few. Choose the ones that make sense and add the others during the year. I will explain each more in depth in a future blog post.

 

Expense Categories on Schedule C:

Advertising

Car/truck

Commissions and fees

Contract labor

Depreciation

Employee Benefit Program

Insurance

Interest for mortgage

Legal and professional services

Home office

Supplies

Licenses and taxes

Travel, meals and entertainment

Utilities

Wages

 

One way to be neat and organized!

One way to be neat and organized!

What System Suits You

The filing system can be simple and does not have to cost a lot. One method is to use envelopes for each category. Personally, I found an unused accordion file folder that I will use for 2015. These expanding file folders come in all forms and sizes and are not very expensive either. You now can file the receipts as soon as you get them, or collect them and sort them once a month if that suits better.

For many people the burden of keeping receipts is a task that often turns into a search for misplaced and missing items. Since many savvy business persons have smart phones, it is much easier to download an app and then make a picture of the receipts on the go. Some Expense Trackers are only for Apple iOS and others only for Google Android system. Some are free and others have a small monthly fee. Besides organizing all receipts and payments, these apps also help to keep tab on what  you spend. If you do not have a fancy phone to download apps, many offer web based programs too. And if this is still too cumbersome, pen and paper or an excel workbook can serve the same purpose.

I hope this information gave you some ideas on how to prepare and organize tax supporting documents more efficiently. If you have a tip on how to keep track of all business expenses, feel free to comment.

My favorite way to pay for business expenses.

Are you an entrepreneur, a start-up small business or a sole professional business person? You might want to reconsider how you pay for everything for your business.

Do you use your hard earned money to pay for business expense?

Most people who have a business, but are not hundred percent committed, will get involved in a business by using their personal check or credit card for the initial sign-up fee. Many entrepreneurs also use personal savings or financial help from family and friends to pay for any purchases for the business. And before you know, some month down the road, you are still using your own personal monetary instruments.

Do you want to be more efficient?

In fact, for tax purpose and financial reporting it is easier if the business has a separate bank account. To mix personal and business expenses is not efficient bookkeeping. The Internal Revenue Service requires the business to substantiate all entries on your tax return. If business purchases and personal payments are combined on one account it creates a complication to reconcile the statement details.

However, you still need to keep any receipts for purchases, invoices for monthly expenses like electricity, rent, internet, etc.

You can find more information on this subject on the website of the IRS. http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Recordkeeping

Using Other People’s Money to pay for Business Expenses makes Sense!

Reasons why Other People’s Money is beneficial.

When you have a credit card (OPM) specifically for the business, the statements provide a great backup for keeping track of costs and help classify them into categories. Not only will a good record system help you at tax time, but it also can give you details for monitoring the progress of your business and help secure future financing.

Credit cards tailored to small business often have a reporting feature that gives analytics on how the total sum is spent. Actually better is when the provider offers the option to upload the details in to a software program such as Quickbooks or Quicken.

A credit card can help with cash flow issues that a small business owner might face if he needs larger quantities of parts for manufacturing his product or more stock of merchandise. However, if the card is used for large sums, the business owner needs to be sure that he can pay off the monthly charges every time.

Many credit cards for small business also provide a rewards program that could help in lowering cost of travel expenses, office supplies or cash back. An important factor to consider is how the points are accumulated. Does the card issuer offer 1 point for every dollar or are there categories that earn more points?

Here is more HELP:

Most franchise companies, network marketing or internet businesses provide lots of details on the company and the product or services to new business partners. However, there is little or no help on any legal or financial implications. But it is not too late to get on the right track to have a sound and successful business.

Check out my free report on How to Launch your Small Business Without any Hurdles. Click Here.

If you got value from this post or have any comments, please let me know. I always enjoy connecting with my readers.

Oh, yes! It’s FREE!

Have you filed your tax return yet?

How do you file your yearly income tax return? Do you go to a CPA firm for assistance, do you visit a tax preparer such as H&R Block or do you prepare your own return using software you buy?

Depending on your situation your only option could be a professional service. If you have a side business or small business you would be wise to get help from a reputable company that knows about taxes. Also, if you had a big change in your personal life such as buying your first house, getting a baby or maybe inherited property, consulting a CPA will give a thorough advice on how to handle this best for tax purpose.

But if you do not fall in any of these categories you could qualify to file your return for free!

Two ways to file a free income tax return.

  1. Do-it-yourself

The IRS offers a special on-line service that you can use if you are comfortable doing your own taxes. If you have a W-2 from your employer and no other deductions, this is an easy filing from the comfort of your own home. In order to qualify for the free programs you have to consider a few limitations:

–        Your gross income in general has to be lower as $60,000

–        Often you can only file if you are in a certain age group

–        And some programs only allow individuals to file tax returns in certain states.

You can find more details on the different software providers on the IRS website.

File your Tax Return for Free!

File your Tax Return for Free!

 

  1. Volunteer Income Tax Assistance (VITA)

For those persons that do not understand the tax terminology, do not have access to a computer or prefer that someone with more knowledge takes care of their tax return, they can find help from specially trained Volunteer Income Tax Assistants. The IRS yearly recruits persons that learn to do income tax returns in specific locations throughout the country. The VITA program offers free help to low-income residents, persons that are disabled or over 60 years old, and that earned less than $53,000 in 2014. The AARP has a similar program that provides tax assistance to seniors.

Click on this link to find locations in your area. You also can call 211 to find a site. Often a community center, library or accounting school will open their facilities at certain times. Some locations require an appointment and others only do walk-ins. If it is really busy, you might have to wait before a volunteer preparer can assist you.

Either way, make sure you have all documentation with you, so you do not have to go back to retrieve something you forgot. You definitely need your Social Security card in order to start at a VITA site. And if you do not have health insurance through your employer you need to prove that you got health insurance on the market place (Form 1095-A). To maximize any lawful deductions and credits, you need to show the preparer that you qualify for it. Therefore, it is better to have more evidence as needed so bring all medical receipts, travel logs, insurance payments, kid’s day care invoices, etc. to get all that you qualify for.

Lastly, I want to mention that the Affordable Care Act (ACA) this year can cause a penalty, even if you paid for your health insurance through the market place. When you purchased a silver tier health plan you also had the option to obtain a subsidy and reduce your premium payment. Now at tax time, the tax preparer will compute your annual income and maybe it is different from the amount you used when purchasing insurance. If you benefited from a subsidy that was too high this may affect your tax refund or tax liability.

I hope this information helps you to prepare for filing your income tax return this year. Do you have any suggestion on filing an income tax return? Feel free to leave a comment.

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