By Melissa Clary

It seems as though people will do anything to try and decrease their tax liability. Here is a list of 10 deductions that taxpayers were certain that they could write off;

1. No receipts from above - Putting a few bills into the church offering plate got a client of CPA James T. Campbell in a bind when the IRS asked for canceled checks or receipts to support his charitable deductions. Explaining why he had no such receipts, the taxpayer said he simply throws in cash “as the spirit moves me.” Campbell says the IRS agent paused to consider the taxpayer’s response, and then offered this advice: “I understand how the spirit can move you. So my advice to you is to always take your checkbook to church with you. When you feel the spirit coming on, just take out your checkbook and fill in any amount you think is right, whatever the spirit may dictate. It makes no different how much you give, just as long as you have a copy of the canceled check. This way both the spirit and the IRS will be pleased.”

2. Silence is golden … and deductible - Since we’re on the subject of charitable deductions, Allyson Baumeister, CPA, of had a prominent client who found a creative solution to a chronically noisy next door neighbor: He bought the house from the fellow, ripped it out of the ground and donated it to a local women’s shelter. He then claimed the value of the house as a charitable deduction. “The deduction was limited to a percentage of his income, but his income was such that that wasn’t a problem. From what I recall, the IRS may have adjusted the value somewhat, but it did allow the deduction,” says Baumeister.

3. He took Manhattan, the Bronx and Staten Island, too - When accounting software was in its infancy, a rookie CPA prepared a return for an individual with one small glitch: The software mistook the filer’s address “New York, N.Y.” for the name of a dependent. The mistake went unnoticed by the firm and the client, until one day they received a phone call from the IRS. The agent apologized that the deduction was being disqualified, even though, as the agent politely agreed, it might indeed be justified.

4. But you can write off the pimp hat - When does an entertainment expense exceed IRS criteria? Ed Mendlowitz, CPA had a businessman client wanted to deduct the cost of a call girl he hired to entertain some clients. When Mendlowitz told the businessman he’d have to present the so-called contractor with a Form 1099 to support this business expense, the client declined to do so and dropped the whole idea.

5. The ‘Zoolander’ deduction - Those who work in front of the camera for a living – like Derek Zoolander in the 2001 film comedy – are often inclined to work their accountant to deduct all manner of personal property and perks as business expenses, from full wardrobes to back waxing. “We have public speakers and we help them understand that they cannot deduct all of their clothing, even though they wear it onstage,” says Dallas CPA Ken Sibley. “Models can deduct a lot of makeup and certain pieces of apparel, but it has to fit the rules. We don’t let them deduct the pedicures, manicures and back waxing for therapeutic reasons.”

6. What are you, an Indy driver? New Jersey CPA Elihu Katzman couldn’t believe this deduction: “We had a client-salesman that was asked the number of miles he used his car for business that year. He insisted that he drove 60,000 miles, all for business in one year. We asked him if he had any time to sleep, in that he must have spent most of the day and night driving.”

7. The $50,000 business meeting - Imagine a tax preparer’s surprise when a client-attorney listed $50,000 in entertainment expenses on his tax return – quite a chunk considering the guy’s gross income was in the $300,000 range. The preparer questioned the client and he said, ‘Well, I threw a party for my clients. And the tax preparer said, ‘You didn’t invite me?’ Anyway, they started discussing the expense and the client informed the preparer that the cost was for his daughter’s wedding. But he did invite all his clients. However, he was not allowed to write off his daughter’s wedding.

8. The joys of being a parent – Clients are constantly asking their tax preparers if they can write off loans that they gave their children. The correct answer is, unless you have documentation verifying the existence of the loan and have taken legal action that resulted in a determination that the loan is not collectible, no deduction is allowed.

9. Inflating your assets - The story that is consistently brought up at CPA classes is where the topless dancer got breast implants and wrote them off as a business deduction. The IRS challenged her, it went to tax court and she won.

10. Tax Benefits of Being Blind – This one is an old favorite. The government is going to give you a break if you are blind. Just check the box on line 39A. Huh? You are BLIND! Obviously, the idea is you are having someone else do the tax return, but it is still pretty funny at first glance.
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Melissa Clary, CPA is a partner of the Colorado-based C.P.A. Firm Kruger & Clary. For details on their firms services visit http://www.krugercpas.com/

Visit the Good Business Blog to learn more from Melissa and other Good Business Experts.

Napoleon Hill continues to be one of the most influential people of all time. His book, Think and Grow Rich, written in the early 1900’s focuses on the essentials to being successful. There are “subliminal” messages throughout the book and if you are where you need to be in life to get it, you will notice these signals & learn what the true meaning of “Rich” is.

I found this clip to be a piece you can spend 5 minutes and reflect about your true intent, refocus & then, of course, push forward toward your dreams! Enjoy!

Be Awesome!

Jeff Levin
Online Entrepreneur
Founder of GrowthPOD.com
The I Promote You. You Promote Me! Network

by CJ Arditi

You may not be familiar with its formal name - the Economic Stimulus Act of 2008 - but you’re almost certainly aware of its key outcome: a tax rebate. Now comes the big question: What should you do with it?

If you spend it, you will do your part to help stimulate the economy. But by investing the rebate, you could help speed your progress toward your long-term financial goals, such as a comfortable retirement.

Before we look at investment possibilities, let’s quickly go over the “nuts and bolts” of the plan:

How much? You can receive up to $600, if you’re filing as an individual, or $1,200, if you’re filing a joint return. Plus, you can get an additional $300 for each qualifying child. However, the size of your rebate will be reduced by $50 for every $1,000 you earn above adjusted gross income (AGI) limits ($75,000 for singles and $150,000 for married couples).

When? The IRS will begin mailing Stimulus Act rebate checks in May. If you’ve selected the “direct deposit” option for receiving your 2007 income tax refund, your Stimulus Act rebate will be placed in the same account that you’ve chosen for your refund.

Investment Choices

Here are a few possibilities for investing your rebate:

Traditional or Roth IRA - Suppose that you are a joint filer and did receive the full $1,200 rebate. If you put that $1,200 in an investment that earned a hypothetical 7 percent return, and that investment were placed in a traditional or Roth IRA, the money would grow to more than $9,000 in 30 years. (This figure does not include fees, commissions or expenses, all of which would reduce your investment returns.) Keep in mind that traditional IRA withdrawals are taxable, whereas a Roth IRA’s earnings have the potential to grow tax free, provided you don’t begin taking withdrawals until you’re at least 59-1/2 and you’ve had your account for at least five years.) All investments within these accounts do fluctuate in price, so it is possible to have more, less or the same amount when you sell your investments.
Section 529 savings plan - In a Section 529 college savings plan, you put money in a specific mix of investments. Section 529 plans are tax deductible in some states for residents who participate in their own state’s plan. All withdrawals will be free from federal income taxes if the money is used for a qualified college or graduate school expense of your child or grandchild. (Withdrawals for other reasons may be subject to federal, state and penalty taxes. Also, Section 529 distributions will appear as income on the child’s tax return, which could affect financial aid calculations.)

Emergency fund - It’s a good idea to put six to 12 months’ worth of living expenses in a liquid account for use as an “emergency fund.” Without such a fund, you might be forced to liquidate some of your long-term investments to pay for things such as a costly car repair or an unexpected medical bill.

A rebate like this one doesn’t come along every year - so put it to work for you. Someday, you may be glad you did.

CJ Arditi is a Financial Advisor for Edward Jones Investments. Please contact CJ at 914-962-2853

by Thom Torode

It’s often far easier to rest where you are than to push yourself to the next level. But complacency leads to mediocrity…which almost always leads to disaster. So, if this is true, how can you keep yourself responsive, resourceful, and recharged in this competitive business environment?

There are seven tactics that when implemented and sustained, will make a difference:

1. Practice self-discipline versus self-indulgence. Self-indulgence is thinking about how you feel at a given moment, then deciding what action, if any, to take and worrying about the consequences later. Self-discipline is thinking first about the consequences, then taking appropriate action, and feeling great about your decision. See it this way:

§ self-discipline = think consequences
take action & feel great
§ self-indulgence = think feelings
take action & suffer consequences

2.Remember the difference you make in people’s lives. The real measure of your success is the difference that you’re making in the lives of others. By positioning and promoting yourself as someone who can make a difference, you will reach more people.

3. Avoid negative self-talk. Resist the temptation to tell yourself all the things you’re doing wrong and all the things you need to improve on. Remember Willie Nelson’s great tune, “Accentuate the Positive, Eliminate the Negative and Don’t Mess with Mr. In Between.”

4. Listen to one motivational or inspirational message each week. Without recharging yourself, it’s impossible to charge others. Whether this message comes from a religious affiliation or simply from motivational tapes or messages, (like Excellence magazine) it is vital to realize that by renewing yourself, only then can you renew others.

5. Read books by and for successful people. It is said that the average sales person reads only one book each year. That’s why they’re average. The importance of reading is that it not only develops your logic and understanding, but it also develops your verbal skills and gives you exposure to new ideas that you can use to build your business and your relationships.

6. Focus on your long-term vision versus the short-term circumstances. Take the time to review your goals weekly so that you’re focused on the long-term. Remember, if you’re focused on creating the future, you won’t spend time mourning the past.

7. Manage yourself wisely. Recharge and renew yourself and then put in enough effort to get where you want to be, not just enough to justify where you are now.

Thom Torode is President and Managing Director of Action Business Coaching & Development, Inc. They are part of the international franchise of ActionCOACH Business Coaching. If you would like help moving your business to the next level, Thom is offering a limited number of complimentary coaching sessions for those business owners who are passionate about their businesses. He can be reached at 862-219-6890.

by Dominic DesMarais

“It is in the fixed budget but I need to reduce the expense.”

This is the most common theme among business owners I meet with and help. They created a budget with fixed expenses such as building leases, mortgages, equipment leases, operating income loans, and other long term business financing that fit into their budget when they created it. Then, a business slow down or a cash crunch no longer allows the payment to fit comfortably in the budget. Even a business expansion can create this as a business owner wants to change the priorities of the business’ cash flow.

This challenge comes down to two choices.

The first choice is to eliminate the payment. This can be done by selling the asset behind the loan, or buying out a lease if need be. Selling an asset is usually not a quick fix. It takes time to list or advertise the asset, find a buyer, and sell it. This is why a loan on a fixed asset always should be included in your fixed budget versus your variable. The other consideration is how important is that asset to your business and the repercussions of not having that asset available anymore.

A lease on equipment usually has a buyout agreement. This is a negotiable item and should be negotiated with fervor to achieve the best outcome financially. Office space leases are very negotiable and I would strongly recommend involving a commercial real estate professional to negotiate that. The best part is the owner of building pays the leasing agent for working on your behalf. Even if your lease is not up, it is a great time to renegotiate if your payment no longer meets your budgeting plan.

The second choice is to refinance or reorganize the payments on your long term debt. This is the option where a professional financier will be of assistance. We ask for the following items:

Three Years Personal Tax Returns with all Schedules including W2’s and 1099’s

Three Years Corporate Tax Returns with all Schedules

Last Year’s and current Profit and Loss Statement

Last Year’s and current Balance Sheet for Operating Business

List and Description of all Equipment of the Business

Pictures and Description of the Lot and Building

With this information (free of charge), an analysis of your cash flow and possible financing can take place. With new longer amortization loans such as 30 years available, cash flow can be improved or take cash out of equity in your business and apply that towards expansion or other business needs. It is recommended that if you have a number of loans, you take the opportunity to visit this yearly.

Coming next month – examples of how cash flow can be improved.

Call Dominic at 612-247-8322 or visit www.yourcommercialfinance.com for more information.