Why You Should Use a Tax Preparer Even For Your One-Person Company

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As a self-employed business professional, you may regularly try to keep your expenses to a minimum, and this may mean that you try to do as much of the work as possible on your own. There is cost associated with outsourcing certain tasks to other professionals or contractors, and you may think you can save money by doing the work on your own.

This is true in many cases, but there are some instances when there is a true benefit to you to outsource the work to an expert. When it comes to preparing the tax return for your one-person company, there are numerous benefits and advantages for doing so. With a closer look, you may see that it is far more cost-effective to pay for tax preparation services than to attempt to do the work on your own.

Save Time

Tax code changes from year to year and from city to city, and it can be time-consuming and frustrating to attempt to keep up with all of the changes that take place even over the course of a few months. However, you must be aware of these changes if you want avoid paying more than necessary in taxes to the IRS. A professional accountant, CPA or local tax preparers in Orlando and other regional cities can all facilitate this process and can save you a considerable amount of time. This is a professional who is always updated on changes to the tax code, so you can always expect knowledgeable assistance from this professional.

Find Deductions and Credits

Each year, your own tax situation can change. In addition to changes to the tax code that can impact the deductions and credits you qualify for, changes in your business can also impact the deductions and credits that you can qualify for. For example, you may have purchased equipment that qualifies for a depreciation deduction, or you may have made energy efficiency improvements that qualify for credits. You do not want to pay more money in taxes than necessary by overlooking these deductions and credits, and your accounting professional can help you to determine which tax-saving credits and deductions you qualify for.

Avoid Penalties

There are several reasons why you may have to pay a penalty fee to the IRS. For example, if you do not file your small business tax return on time or if you do not file an accurate return, you may be required to pay the taxes due plus penalties, and interest charges. This can be costly and burdensome for your small business to deal with, and these penalties and fees can be avoided altogether when you have a professional prepare your small business tax return.

The bottom line is that you may be able to avoid paying the professional service fee to an accountant or tax preparer when you prepare your own small business tax return. However, this is a nominal fee in comparison to the hundreds or even thousands of dollars that you can save by using these professional services. From avoiding costly penalties to finding more deductions and credits that you may qualify for, the fact is there are many financial benefits associated with using professional tax services to prepare your tax return. You can easily learn more about the services of a tax preparer and set up a time to meet with a preparer personally about your current year’s tax return.

From the Cradle to College: What Does it Actually Cost to Raise A Child in Today’s Economy?

Since 1960, the United States Department of Agriculture has generated baseline expenditures for the costs of raising a child from birth through their 18th birthday – it doesn’t include the costs of sending the child on to college, or expenses incurred if a child returns to the home in their 20s.

Those reports showcase just how stark the current economy is. From 2003 to 2013 – the most recent year that the abstract has been published, the cost of raising a child in constant dollars has gone up by 40%, while household income has risen by 5%.

Raising a child has several co-factors that alter the cost: Living in cities tends to make the cost of raising a child rise, though less so than the typical increase in income; in terms of family financial stress, it’s slightly less economically disadvantageous to raise a child in the city even though the total expense is higher.

The second cheapest place to raise your child is in rural America, where the costs of the most expensive factors, notably housing (roughly 31% of the total) is less. Children are also cheaper to raise in batches – hand-me-down clothes help a lot, and having multiple children reduces the per-cost surcharge for housing costs.

Categorical Comparisons

Compared to the 1960s, housing as a percentage of the total expenditure has remained roughly constant. The cost of food has dropped by 50% – it was 24% of the total tally in 1960, and is 16% now; likewise clothing has gotten much less expensive — which will come as a surprise to anyone who’s tried to buy clothes for a teenager. The difference is 11% in 1960 and 6% now. Both of these are signs of increasing agricultural efficiency and industrial automation.

Where costs have gone up are health care — we aggressively treat more diseases and conditions in children now — and in the cost of child care and education, which has exploded with the rise of the two-income family compared to 1960. Once inflation-adjusted dollars are used, the overall cost of raising a child has risen from $192,000 in 1960 to a median value of $234,000 in 2014.

Cost-Cutting Measures

While nobody is advocating massive cost reducing strategies when it comes to raising a child, there are some places where things can be trimmed. If you’re about to move, look for a balance between a good school district and home prices; higher priced homes, past a certain point, don’t correlate to a substantially better educational experience.

Look at having your children work outside the home for pocket-money. Mowing lawns for the neighbors isn’t demeaning; it’s a way for your children to appreciate the value of hard work and doing a job to the satisfaction of someone else, while they earn their own pocket money.

While food as a percentage of total expenses has shrunk, eating habits have gotten noticeably worse. Pack lunches for your children – take the time on Sundays to pack a week’s worth of lunches and freeze them; they’ll be less expensive than eating out and will generally be healthier.

Conclusions

A large part of childcare costs stem from out-of-home daycare, which is nearly unavoidable in two-income or single-parent families – and the added features that come from raising a child in the 21st century, like cell phones, data plans, and laptops for schoolwork. Medical costs have also gone through the roof, largely as school districts try to protect themselves from lawsuits stemming from injuries and treat everything involving a child as an ER visit.

3 Reasons To Invest In Bitcoin and 3 Reasons Not To

Bitcoin has attracted a lot of buzz in the media recently. It’s a computer-based currency that governments can’t trace, which has some people very interested. Bitcoin is a brand new kind of medium of exchange, and most people don’t know whether it is worth investment or not. Here’s a list of some pros and cons of this crypto-currency to get you thinking:

Invest In Bitcoin Because Of Its Independence

Bitcoin exists outside of national governments. That means that no government can track it, issue it, rescind it, stockpile it, or control it. That can be helpful for a number of reasons. For example, some people live in areas with unstable governments, or where the government controls the local currency and makes it hard to buy outside goods. Bitcoin isn’t subject to the vagaries of government policy.

Because It Grows In Value

Bitcoin’s value in dollars has climbed as interest in the currency grew over time. More interest translates into more demand, which increases the price of a Bitcoin. That means that aside from its other features, Bitcoin has become an asset for investment like any other- buyers can hold onto it and hope that it will be worth more than when they bought in. It has risk like any other asset, but it might just be worth some money to see if it really takes off.

Because It Might Be The Future

There’s a chance, however small, that Bitcoin becomes the way people do business: Bitcoin might replace other currencies in all transactions. If that happens, it would certainly be better to be holding Bitcoins rather than dollars or euros. Again, this is by no means guaranteed, but Bitcoin does hold the potential to change the way people buy and sell. If it transforms the financial landscape, it will be a very nice thing to own.

Don’t Invest In Bitcoin Because It Is Unstable

Without any backing or government support, the value of Bitcoin can fluctuate wildly based on rumors, big purchases, and other issues. Having a currency that is just as volatile as a stock is a recipe for confusion. Why get into something when you have no idea how much it will be worth in a month? It might double in value or crash to zero. At least with stocks, you can spread out the risk and diversify.

Because It Is Unsafe

Bitcoin, and the exchanges on which people trade it, periodically undergo more or less successful hacking attempts. The exchanges also occasionally shut down, leaving all participants without their money. You are never quite sure if your Bitcoins are safe, or that nobody has found a clever way to duplicate them. The more interest they attract, the more they will be the target of fraud.

Because It Is Not Real

Bitcoin does not represent a real-life asset. Having a Bitcoin worth $250 does not make you $250 richer until you manage to find a person willing to give you $250 for your Bitcoin. You cannot trade it in for a stock, a metal, or anything else. It has no value aside from market whims.

Remember that all investments have risk, and also that with risk comes reward. Choose for yourself: it’s certainly an exciting time!

6 DIY Projects Better Left To Experienced Pros

Entire cable stations devoted to the do-it-yourself lifestyle have empowered homeowners to try their hand at becoming a contracting pro. This zeal to become the next Bob Vila has led to disastrous home additions, unsafe buildings, and homeowners with big bills and unfinished projects. Some projects are the perfect venue for the DIY culture. Other projects should be left to contractors and construction pros.

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1. Home additions and structural work: Erecting solid walls isn’t the only project required for a new addition. A homeowner must also deal with laying the foundation, getting the electrical system right, and even installing the plumbing. The number of responsibilities for a DIY home addition are too great to list and beyond the scope of the average homeowner’s skill set.

2. Replacing the plumbing: Old homes usually need new plumbing systems and new homes occasionally suffer from a burst pipe or a mysterious leak. Replacing one of the pipes under the sink is an appropriate DIY project. Replacing all the pipes in the wall of the bathroom is definitely something to leave to the professionals. What a hassle it would be to handle a giant repair job and close up the wall, only to find that a leak remains.

3. Security systems and alarm installation: Store-bought home security equipment might be easy to install, but it’s not going to be monitored and there’s no guarantee that the devices will keep thieves and criminals out of the home. If a homeowner chooses it, a professional system offers active monitoring as well as a system where everything is connected and part of a live barrier of security protection.

4. Repair or replacement of the electrical system: New wiring of any kind tends to be a project best left to someone who has experience with the complexities of home wiring schemes. Major rewiring requires observance of city building codes, and a homeowner won’t know these specifics. Additionally, improper installation of electrical wires could create a fire hazard in the home. Old wires are dangerous, but improperly installed wires are just as much of a danger to families.

5. Paving the driveway: Whether a homeowner chooses beautiful paving stones or a traditional slab of concrete, the art of a smooth driveway is a project that could take a homeowner months. Paving crews take no more than a few hours to complete the entire job and a homeowner won’t have to live without a driveway for months and months until the last paving stone is in place. A DIY driveway is an excruciatingly long project, even if a homeowner manages to get the job done without error.

6. Knocking walls down: The idea of an “open concept” floor plan is a popular topic in real estate and home improvement conversations, but this project could lead to disaster and a destabilizing of the entire structure of the home. A house is built with important beams and supports that must not be moved or cut. Doing so means that the house could collapse without warning.

Don’t destroy a dream home by starting projects that are too complex and which require professional experience to complete. Homes today have many safety codes and regulations that must be followed, and a DIY homeowner could get in trouble by trying to take on a project that’s too complex and dangerous.

What Are Derivatives and Why Is Wall Street Rolling the Dice Again?

Wall Street seems to be tossing around the word, “derivative” a lot lately. What are derivatives and why is Wall Street so obsessed with them?
What is a Derivative?

A derivative is a financial investment that receives its value based on some event occurring. A good comparison is a sport’s gambling bet paying you if your team scores the first touchdown. Futures, forwards and swaps are all examples of financial derivatives.
Why Does Wall Street Use Derivatives?

Why do you purchase insurance or wear a seat belt? You take actions to hedge against a potential danger that may or may not occur. Actuaries can estimate the chances of an event occurring based on historical data. Derivatives are risk management.
Concrete Derivatives Example

While many homeowners might consider an adjustable rate mortgage (ARM) because it is more affordable, they also might want to hedge their bet. If interest rates increase dramatically, then their monthly payment will also.

Investors purchase Interest-Rate Swaps (IRS), which will pay them if interest rates reach a certain level. For example, if your ARM is 4% today, then you might be forced to pay $900 more each month if the rate increases to 5%. By purchasing an IRS derivative contract that pays you $1,000 if your ARM increases to 5%, you can offset the increase in your monthly mortgage payment with the money paid by the IRS contract.
Nothing was Fixed in 2008 Bailouts

The banking system has many secrets, one of which is that the 2008 bailouts did not fix any of the underlying problems with the Wall Street system. A few of the rotten apples were not removed from the barrel as one would expect, but instead merged with other barrels of apples. This has lead to healthy banks being weighed down by the same toxic derivatives that destroyed Lehman, Bear Stearns and AIG.

One bad apple spoils the bunch.

The truth is that the modern-day Wall Street bankers are not following the conservative rules of banking. When a bad bank goes under, the toxic assets should be written-off. The problem is that many of these banks hold the same toxic assets. The entire banking system is in jeopardy. They have created a house of cards built upon derivatives.
Pyramid of Derivatives

Here is an analogy to help you understand why Wall Street is rolling the dice again after the collapse in 2008. Let us say that your workplace has a refrigerator where everyone keeps their lunch. Well, one of the employees, we will call him Morgan is really lazy. Instead of buying his own lunch, he steals one of the lunches in the refrigerator and puts a paper IOU in place of it.

That is basically what the banking system did in 2008. It knew that the assets of Lehman, Bear and AIG were worthless (they used the term “toxic”); but instead of replacing those toxic assets with valuable assets, they simply wrote an IOU on the government balance sheet. Now, instead of valuable assets, the banking system is full of IOUs. So while some might wonder why Wall Street is rolling the dice again with toxic derivatives; perhaps, these IOUs are all that is left in the system.

Why You Should Read Every Word of a Contract Before Signing

Before signing your name to a contract, it is important to read every word. Even a single sentence could have implications that could ruin your financial future. Once you choose to sign a contract, there is no way to reverse your decision. As a result, you could face unforeseen consequences that you could carry with you for the remainder of your lifetime. You should also read the contract to ensure that you understand all of your contractual obligations.

Understanding this information can help you to avoid penalties that could hurt you later down the road. This article will take a look at why it is important to read every word of a contractual agreement before signing.

1. Unfavorable Terms are Usually Hidden

A contract created by the other party is usually designed to convince you to sign it. As a result, unfavorable terms are usually hidden within the agreement. Research has shown that readers are most likely to read the first sentence of each paragraph. Readers are also more likely to ignore terms that are written in smaller fonts. In most cases, the other party is aware of these human tendencies. Therefore, you can use this information to your advantage. Make sure that you read the entire contract to discover terms that are likely to be unfavorable. Most of these bad terms will be hidden in the middle of paragraphs, in small fonts, or near the end of the document.

2. Unintended Consequences

Many individuals who sign a bad contract are in a hurry to get what they want. As a result, they are unlikely to carefully evaluate each contractual term. Since the consequences of a bad contract can extend for the remainder of your lifetime, it is important to consider how individual terms could have unintended consequences. In many cases, individuals are unaware of what these consequences could be. As a result, it may be advantageous for individuals to ask a professional attorney for advice. It may also be possible to talk to another individual who previously entered into the same agreement. By doing this, you can reduce your chances of entering into an agreement that you will later regret.

3. Understanding Your Obligations

It is also important to read the full terms of an agreement to understand your obligations. In many cases, disputes arise due to ignorance by the other party. Courts in the United States have long upheld that individuals who are ignorant about certain terms cannot receive any extra leniency. The only exception to this rule is if the other party acted in bad faith. In the vast majority of cases, victims of bad contracts usually end up having to pay for their mistakes. Therefore, it is important to fully understand your obligations under the contractual terms. The easiest way to do this is to simply read the entire agreement. Make sure that you ask questions if there is something that you are unsure about.

4. Contracts Can Be Changed

The terms of a contract can always be changed. If you study the terms and find something that you are uncomfortable about, the other party might be willing to remove the unfavorable terms. Even unethical individuals are often willing to make these concessions. Make sure that you read the entire contract to find terms that might need to be changed. If the other party is not willing to change these terms, do not be afraid to walk away from the deal.

Simplifying the process can also help greatly. A variety of new options are now available, including electronic signature tools, that make the process of signing documents faster and easier on both individuals and businesses. This is just part of being organized, which will also help you to make sure you’re not agreeing to contractual obligations that you don’t understand.

5 Expenses You Didn’t Know You Could Write Off With Your LLC

So you run an LLC and you know that before long it will be time to file taxes. Everyone knows that paying taxes are not fun at all, but with deductions it can reduce the amount you owe and thus make it a little more bearable. The following list should help you by showing you some not so well know deductions that you can write off. I am not a tax professional, so all information should be gone over with your tax preparation company.

First-Business Insurance: So most businesses carry some form of insurance to protect themselves as well as the customers they work for. And we all know that business insurance is not cheap at all. So the IRS will let you write off the cost of having business insurance, and that is great news for many small business owners.

Second-Health Insurance: Since everyone has to have health insurance now, you might as well take the write off for it. If you own a small business and pay out of pocket for your health insurance you can write that expense off of your taxes. That includes insurance for you and your spouse as well as children up to 27 years old.

Third-Employee Pay: Paying employees is often the largest expenses that a business has. Writing off this expense will be huge for many owners. According to the IRS, as long as the expenses are reasonable you are allowed to write it off! So as long as you claim that your employees made a reasonable wage, there should be no problem.

Fourth-Home Office: Now everyone knows that an office can be a write off, but what happens if you run a service business that works at the client’s home or office? The IRS says that you can write off a home office as long as you use that portion of your home ONLY for business. You also need to use it on a regular basis. That can be only once a week if you use that space to do paperwork like invoicing and payroll. When you use the home office write off you also get the chance to write off a good amount of other things. Some of them are water and electric, repairs and even landscaping. Don’t forget the housekeeper as well!

Fifth-Training: If you bought some training DVDs for the office staff, or paid for the sales team to go to a training seminar then you are in luck. All training and education expenses used to further your current area of business can equal a large write off for you. So don’t be afraid to throw out the old VHS tapes sitting on the shelf collecting dust. Don’t forget that when you replace them, you need to watch the new ones!

Hopefully this list will help reduce the pain associated with filing taxes. These are just a few of the many write offs that the IRS offers to business. Don’t forget that a tax prep company should be aware of all the different write offs and what you do and don’t qualify for. But remember above all else, don’t take a write off if you didn’t earn it!

How to Get Serious About Asset Management

There are many ways to make wealth, but the truly successful “make their wealth grow.” What are some of the most important financial developments for 2015? Capital shows you how to get serious about asset management by helping with investment choices, risk management and plan development.
World on the Edge

When you listen to the mainstream news, you only get a quick snapshot of what is going on in the world. Successful asset management requires you to look beyond the headlines to understand the core fundamentals. As we pass into a new year, the world financial markets seem to be doing quite well, but what is lurking in the shadows?
Protecting Your Wealth

Wealthy people are always looking for the next emerging market. They need to invest in “income-producing assets” to grow their portfolios. Stocks are reaching high PE ratios with some earnings warnings at the end of 2014. The retail environment is somewhat shaky as consumers deal with high debt loads.

In 2008, investors in the Dow Jones saw the market collapse by 40%. The unprepared lost a lot of money. Isn’t it time to get serious about your asset management?
What is Your Risk Management?

Quick silver capital will find the best returns for investments. While you might have assets in developed countries, the returns might be quite low. Does this conservative risk management plan fit your personality?

Young people might want to chase the higher returns available in developing economies. But which ones can you trust?
European Union is Convulsing

In 2008, Portugal, Ireland, Italy, Greece and Spain (PIIGS) were defaulting on their debt. So what has changed? These economies have seen a mild recovery, but other European countries may be nearing the debt cliff. France had its sovereign debt downgraded in December 2014. How will the valuations of European assets be effected?

Getting serious about asset management is about preparing before the bottom falls out. One secret about wealthy people: They don’t follow the herd mentality. If you don’t have a good asset management plan, you will be paying for someone else’s summer home, not your own.
Debt Remains an Issue

Global debt remains a serious concern. It is like an anchor slowing down the global ship. Billionaires like Marc Faber and Jim Rogers have already shifted their assets to a rising Asia.

Can you imagine the potential for a Chinese or Indian automobile manufacturer, when their billions can afford better transportation? Tata Motors has already purchased British Land Rover and Chinese motorcycles are competing with BMW.
Diversification is Key Element of Your Plan

Capital can help you learn about investment strategies to diversify your holdings. These financial asset management advisers will work for you with your best interests at heart. You have a busy life and cannot stay abreast of all the world’s economic developments – but these professionals can.

Building and maintaining wealth is the true challenge. Sit down with the experts at Capital to talk about your financial portfolio. Develop a plan first. financial professionals can help you get serious about your asset management.

10 Projects The Whole Family Can Take Part In

We are all looking for ways to enjoy our time with family. There is no need to mortgage the house or travel on fancy trips. Sure it’s hard to get up and get out, but put down the technology and get moving together. Here are ten great projects that everyone in the family can enjoy.

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1. Grow Something: Building a garden or filling the planters with new life is so much fun. Kids love to get their fingers dirty and it is a wonderful chance to teach some valuable life lessons about caring for living things and watching those things produce food and flowers we all get to enjoy. Starting from seeds indoors is fun on a rainy day and cheap.

2. Build It: There are tons of simple plans online for forts, teepees or cardboard playhouses. It is amazing how much kids are craving to be a part of the imagination process and prefer our imperfect creations over the pristine store bought products. Kids can use paints or markers to give it their personal touch.

3. Leaves: Raking is not typically the project we look forward to. Turn this chore into family fun by making a game of tag using the piles of leaves as the safe base. Stuff canvas bags with the leaves and make scarecrows for your garden.

4. Chickens Are Fun: So many urban neighborhoods allow chickens. If you are up to the commitment, make a project to build a chicken coop. Together your family can raise the chicks, feed and water them daily and harvest their eggs when it is time.

5. Wash Everything: At least once a year it is a great idea to wash down the patio furniture. Drag out the buckets, scrub brushes, dish soap and get the kids involved. Kids love anything that involves a water hose! Also wash down the kids’ outdoor toys and have them feel responsible for the care of their own things.

6. Birds: Home improvement stores often have an hour course for families to build their own birdhouse from a kit. Build a bird house from a kit or from scratch. There are very simple bird feeders you can make with a peanut butter slathered pine cone rolled in birdseed.

7. Crafting: Painting tea towels or t-shirts can be an inexpensive craft for the family to enjoy and feel proud again every time your helpers dry the dishes. Lay out stamps, stencils, paints, brushes and pictures for inspiration.

8. Experiment: Create a lab experiment to solve a problem or answer a question. Many websites and books out there make this very easy to get started. Encourage kids to use the scientific method and track their findings.

9. Cookies: Or any kind of cooking that can benefit from an assembly line. Of course the measuring and mixing is fun for the kids, use fun shaped cookie cutters, then decorate with icing and candies.

10. Help Others: Volunteer a day at a soup kitchen or make parcels for soldiers overseas. Remembering how lucky you are to be a family is a great feeling.

Family time is so precious and can be free and fun. Don’t forget to keep your camera handy for family project day and make it something everyone looks forward to.

The Financially Responsible Way To Buy an Engagement Ring

For most men, the process of choosing an engagement ring is an intimidating experience. Though there is no shortage of jewelry stores to shop and engagement rings to browse, it can be difficult to know whether or not you are getting a good deal. However, there are some simple things that you can do to improve your odds of making a wise buying decision.

Shop With a Budget

Before setting out to look at rings, you should determine how much you plan on spending on the engagement ring. The jewelry industry recommends a budget equivalent to three months of your salary, but that number may not be realistic for you depending on your financial situation. If you are struggling to pay your bills or reduce debt, it makes little sense to spend a small fortune on an engagement ring. If you cannot afford the ring that you want, consider buying an affordable ring and having the diamond replaced with a larger one in the future.

Learn About Diamonds

The price of a diamond varies depending on a number of factors, beyond just the carat size. Diamond prices also vary depending on the clarity, cut and color of the diamond. Though you do not need to be a diamond expert to buy an engagement ring, learning about the basic differences between diamonds can help you to compare rings and determine which ring is the right one for your specific situation.

Comparison Shop for the Best Deal

Though engagement rings are more expensive than most other purchases, the shopping experience is similar. You should carefully shop a variety of retailers to learn about the rings available on the market and to compare prices. You should also look for rings that are on sale, discontinued or otherwise offered for less than retail. Through careful shopping, you can likely find the ring that you want to buy, or one very close to it, at a great price.

Manage Financing Costs

If you need to borrow money to purchase an engagement ring, an important financial consideration is the cost to finance. Most jewelry stores offer in-store financing plans, but these plans often have high interest rates. These high interest rates can easily cause you to pay two or three times the cost of the ring before the loan is paid off. However, there are other lower cost ways to borrow money which will save you money such as borrowing through a personal loan from a bank or credit union or borrowing through a home equity loan.

Plan For Problems

When shopping for an engagement ring, be certain to fully understand the retailer’s warranty and return policy. For example, a number of retailers offer a full refund with-in a certain amount of time, but will offer store credit for a longer period. Jewelry buyers typically must take some action, such as having the ring inspected annually, to keep a store warranty in effect. By making certain to understand the warranty and return policy, you can avoid making a potentially serious financial mistake.

Though engagement rings can be an expensive purchase, you can save hundreds, if not thousands, of dollars by simply following these tips and taking your time on deciding which ring to buy. With the savings, you can spend more on the wedding, honeymoon or simply to save for a future need.