Tis the Season to Save . . . On Taxes!
Everyone hates paying taxes. We all accept it as inevitable but look for ways to reduce our tax liability. Luckily for us, the IRS offers incentives in the form of tax deductions. Some common deductions include charitable contributions, interest on your home mortgage, and interest on your student loans. While you may have no control on when you pay your mortgage and interest, you do have control on when you make charitable contributions.
Basically we are talking about the time value of money. You get the same tax deduction for your charitable donations whether you make them all in January, throughout the year, or all on December 31. This allows you to use your money throughout the year instead of letting someone else use it.
Some people might want to make charitable deductions but are afraid that if they don’t make them in little contributions throughout the year, the money will be spent come December and they will lose out on the deductions. If you are really serious about making charitable contributions but also not wasting your money, put aside the money you want for charitable contributions each month in a savings account. This allows the money to collect interest, which you can use for yourself, or you can add it to your charitable contributions at the end of the year and get even more tax deductions. Either way, you have the money to make your charitable contributions, you got the value of having the money for the entire year, and you still get your tax deductions.
Financial Fortunes
Understanding finances and how to keep track of your finances can make or break your business. Keeping track of your finances is especially important for small cash based businesses. It is very easy to forget or lose track of what you make, the taxes you need to pay on your sales, and what was sold if you don’t develop a system to keep track of everything. This can land you in hot water not only with the IRS and your state, it will also make it hard when you need investors or try to get a loan from a bank.
Many small businesses don’t realize the importance of keeping good records. They want to try and hide some of their income in order to keep taxes down. However, while this might save them a few dollars in the short term, this gamble could really hurt in the long run. If the IRS finds out that you are not properly reporting all your income, including any cash tips or sales from other items that are not the main part of your business, they will not only collect the back taxes for that income, they will also impose fines and charge interest on the back taxes owed.
There are plenty of good accounting systems available that will help you keep track of your inventory, sales, invoices, expenses and income. I frequently use Quickbooks. Ask your accountant or other business owners for what they recommend.
What is a short sale?
While the housing market and economy are gradually showing signs of improvement, there are still many people who are behind on their mortgage payments and unsure of how to proceed. One option is a short sale.
Short sales are when the owners sell the mortgaged property, with the banks approval, knowing that the house will likely sell for less than the outstanding mortgage amount. Some banks will then write off the difference between the outstanding mortgage amount and the selling price of the home. However, that is not a guarantee so you should talk with your mortgagor to understand exactly what they will allow and get their approval before listing your house for sale.
If you are facing the possibility of losing your home, talk to your bank and a local real estate agent about the options. Having a portion of your loan written off through a short sale will hurt your credit much less than going through a foreclosure.
Secrets from a Hiring Manager
There is plenty of competition in the job market, so how can you get ahead? Surprisingly, it may take something as simple as common sense and respect for the people who are interviewing you.
1. When an ad states Do Not Call, don’t call.
Surprise. It is so simple, but it can mean the difference between the hiring manager looking at your resume or promptly dumping it in the trash. When the ads state don’t call, there is usually a reason, and when you ignore that statement, you are showing the hiring manager that you don’t respect his/her authority or ability to make decisions. Not a good move.
2. Dress for Success.
When you get that interview, you need to make a great first impression. If you don’t have a suit, check into getting one. If you can’t afford one, stop by your local Goodwill, Salvation Army, or contact local charities that provide suits to people unable to afford them. Whatever you do, do not look like you bought the suit at Goodwill though. Get the suit early enough that you can take it to the dry cleaners and get it cleaned and pressed in time for your interview. Having a suit is not enough, you also have to show good personal hygiene by wearing clean clothes and trying to look your best. In addition, make sure that the suit actually fits properly.
3. Bring copies of your resume to the interview.
Bring several copies of your resume with you so that you can pass them around to the different people in the company that you are interviewing with in case they did not print one out for the interview. In addition, review the resume just before the interview so that everything on it is fresh in your mind and you can answer their questions without that awkward pause.