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Don’t Be Surprised By Taxes Come April 15th

Surprises are usually fun. I remember the Dean Martin show in the 1960s. In the middle of his show he would go to a door and casually open it to let in a cameo appearance by a celebrity. It was fun because it was a surprise, not a shock.

During the year you should keep an eye on your tax withholdings. If you under-withhold taxes you could be subjected to penalties. Here are some examples that can change what happens in April:

Wages and Income Tax Withholding

New Job. Your employer will ask you to complete a Form W-4, Employee’s Withholding Allowance Certificate. Complete it accurately to figure the amount of federal income tax to withhold from your paychecks.
Life Event. Change your Form W-4 when certain life events take place. A change in marital status, birth of a child, getting or losing a job, or purchasing a home, for example, can all change the amount of taxes you owe. You can typically submit a new
Form W–4 anytime.
IRS Withholding Calculator. This handy online tool will help you figure the
correct amount of tax to withhold based on your situation. If a change is
necessary, the tool will help you complete a new Form W-4.

Self-Employment and Other Income

Estimated tax. This is how you pay tax on income that’s not subject to withholding. Examples include income from self-employment, interest, dividends, alimony, rent and gains from the sale of assets. You also may need to pay estimated tax if the amount of
income tax withheld from your wages, pension or other income is not
enough. If you expect to owe a thousand dollars or more in taxes and meet
other conditions, you may need to make estimated tax payments.
Form 1040-ES. Use the worksheet in Form 1040-ES, Estimated Tax for Individuals, to find out if you need to pay estimated taxes on a quarterly basis.
Change in Estimated Tax.
After you make an estimated tax payment, some life events or financial
changes may affect your future payments. Changes in your income, adjustments,
deductions, credits or exemptions may make it necessary for you to refigure your estimated tax.

______________________________________________________________________________

IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the U.S. Department of the Treasury and Internal Revenue Service, we inform you that any
tax advice contained in this e-mail (including any attachments) is not intended
or written to be used, and may not be used, for the purpose of (a) avoiding
penalties under the Internal Revenue Code or state tax authority, or (b)
promoting, marketing, or recommending to another party any transaction or
matter addressed herein.

Have You Received Fraudulent Bank Emails? Here Are Some Tips to Protect Yourself.

Rick_E_Norris_An_Accountancy_Corporation_Have_You_Recieved_Fraudulent_Bank_Emails_Here_Are_Some_Tips_to_Protect_Yourself

I love Fraudsters. They make me laugh at their little games. Have you gotten emails asking that you “confirm” your secret bank information? But how do you know what is legitimate and what is not? Here are some tips:

Banks, the IRS, and other institutions do not ask you to provide your information. Automatically, you should consider such “security prevention” as “phishing.”
If you think there is a problem with your bank, don’t use the email to log in. Go to the site from a bookmark or Google search and log on the way you would normally do.
Look at the address of the party who is sending the email. The email below came from SMChaseNotification@ChaseNotification.com. If you log into the REAL Chase bank, you would see www.chase.com or www.chaseonline.chase.com. I copied the link and put it into my browser and my Chrome browser gave me a warning sign that it was tagged as a phishing site.
Now if you ran your cursor over the “Continue to the verification process:” you would see that it does not point to a Chase Bank site, but www.csedesignsolutions.com/js/restrectedonline.php . This obviously is NOT Chase, and notice the misspelling of “restrictedonline.” Just too funny. If you are going to cheat me, you better be a good speller.
But the best part, was the bottom. I almost missed it. Under the E-mail Security Information, they enter the REAL Chase websites. So, people click there and say, “OK, it’s Chase.” Clever little devils.
I also looked up Dana Ingle and there is a Linked In person stating that they were educated at Ohio State and was the Vice President of Operations and Fraud. Was this a fraudulent Linked In account? Go figure.
Do Not Click on any of these hypelinks. You never know. They could load viruses on your computer (I dismantled them for this article.)

Beware! Don’t “Chase” it.

URGENT: Account Verification Required

Dear Chase Online^SM Customer:

As part of our ongoing effort to protect your account and our relationship,
we monitor your account for possible fraudulent and or unusual activity. We need to confirm your identity
as same as information we have on file and your account security:

Please
click on continue to the verification process and ensure your identity as
same as information we have on file and your account security:

Continue to the verification process:

Your satisfaction is important to us, and we appreciate your prompt attention
to this matter. If you already had the opportunity to discuss this matter
with us, please disregard this message. You may also call 800-355-5265
from the U.S. and Canada. If you prefer, use the phone number on the back of
your Chase Debit card. Internationally, you can reach us at 866-686-6670.
For your convenience, we are available to take your call 24 hours a day,7
days a week.

Thank you for being our customer.

Sincerely,

Dana Ingle

Vice President

Chase Security Prevention Department

E-mail
Security Information

E-mail intended for: Your Chase Account On File .

If you are concerned about the authenticity of this message, please
click here or call the phone number on the
back of your debit card. If you would like to learn more about e-mail
security or want to report a suspicious e-mail, click here .

Note: If you are concerned about clicking links in this
e-mail, the Chase Online services mentioned above can be accessed by
typing www.chase.com
directly into your browser.

The Affordable Care Act and the Small Business

If you are unsure on how the Healthcare Act will affect your business in the near future, you can find answers at the Department of Labor web site. The main question is if an employer can be fined for failing to provide employees with notice about the ACA new health insurance markets? Some businesses were concerned about the $100 fine for not doing so.

Background: The ACA requires employers to provide their workers with a notice about the state health insurance exchanges. These exchanges will sell insurance to individuals who don’t get coverage through their employers. The exchanges are also available to small businesses.

The notice should inform employees:

About the Health Insurance Marketplace;
That, depending on their income and what coverage may be offered by the employer, they may be able to get lower cost private insurance in the Marketplace; and
That if they buy insurance through the Marketplace, they may lose the employer contribution (if any) to their health benefits

The U.S. Department of Labor has two model notices to help employers comply. There is one model for employers who do not offer a health plan and another model for employers who offer a health plan or some or all employees:

The model notices are also available in Spanish and MS Word format at https://www.dol.gov/ebsa/healthreform/.

Employers may use one of these models, as applicable, or a modified version. More compliance assistance information is available in a Technical Release issued by the US Department of Labor.

The answer to the persistent question though is: No. If your company is covered by the Fair Labor Standards Act, it should provide a written notice to its employees about the Health Insurance Marketplace by October 1, 2013, but there is no fine or penalty under the law for failing to provide the notice.

Businesses should stay on top of such laws or make an alliance with a health insurance professional to keep you abreast of all developments.

Have You Been a Victim of Scams?

I love our clients. Usually, before they make a financial move (small or large), they contact us. Sometimes it results in important decisions. Take for example the client who calls about an email form his bank that states that his account will be closed down unless he logs in and fixes a problem. The client would send the email to me (we control his account), and we would immediately email him to not respond because it is a phishing email trying to steal his login. We find these problems when we run our cursor over the authentic-looking logo. It points to a site other than the bank site.

The IRS system is a target of fraudsters also. Here are some examples they warn you about:

Three common year-round scams are identity theft, phishing and return
preparer fraud. These schemes are on the top of the IRS’s “Dirty Dozen” list of
scams this year. They’re illegal and can lead to significant penalties and
interest, even criminal prosecution.

Here’s more information about these scams that every taxpayer should know.

1. Identity Theft. Tax fraud by identity theft
tops this year’s Dirty Dozen list. Identity thieves use personal information,
such as your name, Social Security number or other identifying information
without your permission to commit fraud or other crimes. An identity thief may
also use another person’s identity to fraudulently file a tax return and claim
a refund.

The IRS has a special identity
protection page on IRS.gov dedicated to identity theft issues. It has
helpful links to information, such as how victims can contact the IRS Identity
Theft Protection Specialized Unit, and how you can protect yourself against
identity theft.

2. Phishing. Scam artists use phishing to trick
unsuspecting victims into revealing personal or financial information. Phishing
scammers may pose as the IRS and send bogus emails, set up phony websites or
make phone calls. These contacts usually offer a fictitious refund or threaten an
audit or investigation to lure victims into revealing personal information.
Phishers then use the information they obtain to steal the victim’s identity,
access their bank accounts and credit cards or apply for loans. The IRS does
not initiate contact with taxpayers by email to request personal or financial
information. Please forward suspicious scams to the IRS at phishing@irs.gov. You can also visit IRS.gov and select the link “Reporting
Phishing” at the bottom of the page.

3. Return Preparer Fraud. Most tax professionals
file honest and accurate returns for their clients. However, some dishonest tax
return preparers skim a portion of the client’s refund or charge inflated fees
for tax preparation. Some try to attract new clients by promising refunds that
are too good to be true.

Choose carefully when hiring an individual or firm to prepare your return.
All paid tax preparers must sign the return they prepare and enter their IRS
Preparer Tax Identification Number (PTIN). The IRS created a webpage to assist
taxpayers when choosing a tax preparer. It includes red flags to look for and
information on how and when to make a complaint. Visit www.irs.gov/chooseataxpro.

Be very careful with your personal information. If in doubt, don’t click or answer anything.

IRS Podcasts:

Protect Yourself from Identity Theft – English
| Spanish
Are You a Victim of Identity Theft? – English
| Spanish
Dirty Dozen – English
| Spanish

Is it a Good Business Practice and Strategy to Hire a Ghost?

It worked for Disneyland in their haunted mansion, but will it work for you?

Living in Southern California had one big perk for a young lad, Disneyland. Growing up, I would go one or two times a year, and would ride the attractions over and over. One of my favorites was the Haunted Mansion. My cousin Bill and I watched it being built for years tying to imagine how the Disney Imagineering could conduct a ride in a fancy mansion. We weren’t disappointed once it opened. What I recall was at the end of the ride was a miniature female “ghost” hologram. After exiting the pod you were riding in, you would get one last thrill riding up the escalator by this woman who would say, “Come back! Come back!” It was just too cool, especially to two 12 year old boys.

Now, this holographic technology has made it to the mainstream as a hologram, virtual assistant that offers customers information in place of a real person. (Hologram Employees: Can Virtual Workers Replace Real Ones? by Anthonia Akitunde.)

These holograms come with a basic touch screen to help visitors ask questions. The article claims they will be everywhere in five years. (You have already seen them on live concert stages like Tupac (pardon the language).

If you are an industry leader with a heavy cost in sales personnel, you may be asking if this is right for you? The answer is that you are answering the wrong question.

It is very tempting to follow the herd without thinking. But you must remember the first step in business development: Develop and implement a strategy. Jumping into the latest and greatest is not a strategy, it is an orphaned tactic. It would be like setting sail on a brand new boat with no map or compass.

Strategic planning is a “must” for any business. To ignore this step increases your risk of failure, or at least solidifies years of frustration. You must stop, step back, and lay out your 10-20 year plan with strategic planning aspects. A great combination is to lay out the strategy in light of your current accounting situation, and then monitor it by combining your strategy with your accounting tactics. These will be the milestones that will monitor your progress.

Good business practices dictates planning. And planning is not a ghost that hovers in the back of you mind. It is a real, deliberate direction that may prevent failure.

“Breaking Bad” Habits of Ignoring Your Strengths and Copying Others

Have you ever tried to compete on the “other guy’s field?” So many businesses and people try to copy other company’s strategies because the other guy is successful. Why not strategize using your own skills and resources?

Take Andrew Huang for example. Instead of covering the “Breaking Bad” Theme like so many have done before, he used a different approach. Watch him cover the theme using items commonly found in a meth lab.

Andrew broke the bad habit of many artists. Basically these artists film sessions covering a hit song with the intent to sound exactly like the original version using the same instruments. Their goal was to pick up an audience and a following. Yet, Andrew accomplished this by combining the music with the dynamics of the program. He was able to stand apart from the millions that ache for a “following.”

This thinking not only applies to artists, but to businesses. When your competitor launches a new idea, don’t try to replicate it. Instead, try to leapfrog it using other strengths that are inherent to you and your company. The typical “SWOT Analysis” is used in strategic planning, though as only a small part of it. The SWOT analysis is measuring the internal aspects of your business (strengths and weaknesses) against the external aspects of your business (opportunities and threats).

Setting a strategic plan means taking a novel approach to your business using all available information from your internal accounting to external market conditions. This entails being brutally honest. For example, if there are products, or personnel that do not align with your strategy, you must eliminate them. The concept that Jim Collins in states in his book, Built to Last is the get the right people on the bus before it leaves. Don’t drag people along that you hope will change. If they don’t mix with the new direction, then you are better off letting them find a job that they can agree with.

Try “Breaking Bad” habits and push your company to a horizon that offers more than immediate gratification. (BTW, I don’t recall a guitar being and essential tool in a meth lab.)

The Vision of a Strategic Plan

Douglas C Engelbart created many things in the world of the computer age. But one thing he created and demonstrated in 1968 was the computer mouse. This invention surely has outlived him. His vision was well beyond most businesses 3 or 5 year plan. No, his vision manifested itself in private homes within 20 years with Apple and Microsoft.

Recently I conducted a number of strategy sessions for clients. During that process, we identify a 10-20 vision. This sometimes is a hard stage because small business owners tend to limit their vision to what they think is reasonably attainable. This is a mistake in strategic planning. If you limit your 20 year vision to what is “reasonably attainable,” then you can do no better than reasonable success. As you develop your strategic plan, here are some pointers:

Don’t look at your company and industy in their current state, but as the way you want them to be.
Don’t look at an idealistic future and say, “But the problem is…” Leave that stage to the implementation.
It is possible to have two visions, but they must be compatible to each other so as to not drain resources.
Don’t limit yourself geographically unless you truly do not have the desire to operate outside a limited geographic area. There must be good reasons to limit yourself.
Bounce crazy ideas off others during the session. If you don’t think differently than your competitor, you will never defeat them.
Don’t let your vision copy current visions of your competitors. Try to leap-frog them utilizing trends and technology.
Make sure you vision addresses the issues you identified at the beginning of the process. These issues are both strategic and financial.
Once you set your vision, articulate your mission.

These tips work for not only a business strategy, but a personal career. Great visionaries do great things assuming they know how to impliment their visions.

Productivity Strategies Can Lead to More Powerful Results, Even in a Messy Garage

I walked into my garage last week and saw it for what it really was…a non-toxic wasteland. Christmas decorations, sleeping bags, cardboard boxes, surfboards, etc. Where would I start? I picked up a box and a surfboard tumbled onto a case of half-used bottled water.

A small business person can have the same feeling about their business. You try to manage the business, but the “fires” you have to put out keep you from moving a step forward. For small businesses, here are some tips:

Do a strategic plan. In a nutshell, a strategic plan is :
1. A vision, maybe 20 years. This vision is the horizon you want to achieve.
2. Create a strategy which is how you generally want to achieve your vision.
Take stock of what you have to work with. How good is the condition of your accounting records? Can you look at them and see a reasonably accurate history? Look at your strengths, weaknesses, obstacles, and your competition. A small business owner must be honest in accessing what their current status. To miscalculate will start you on the wrong level.
Lay out the actions you need to implement your strategies. These actions should be disciplined and realistic. Small business owners must not set up tasks that they cannot achieve. Try delegating as much as you can.
Measure your progress in lieu of your strategy. Again, I ask the small business owner, how good is the condition of your accounting records? Can you use them to to establish a basis to measure your progress? Most small business owners I meet don’t think in those terms.

So, what does this have to do with my garage? Well, my vision is to get both cars into the garage, but well before a 20 year horizon. Taking stock in what I have, I see that I can lift most of the objects, but will need one of my three strong boys to help me lift the heavy stuff into the attic. My action plan is to do a little each weekend without putting more stuff into the garage. Lastly, by measure will be how much of the garage floor I can see each week.

Just like in small business management, small task management can be manageable.

Your Small Business Needs More than Futuristic Tattoos In Order to Take on a Life of its Own

Remember the old movie, The Illustrated Man with Rod Steiger? The book was based on Ray Bradbury stories. In the movie, the main character Carl was covered in tattoos from head to toe (not so unusual today). People who looked into his tattoos(illustrations) would see the future.

Carl didn’t have a good strategy that would allow his business (or hobby) to survive him. Once he passed on (or retired), so would his practice of fortune telling.

Mike Periu could have given Carl some good advice in 4 Ways to Make Sure Your Business Outlives You. In his article, he really sets out points that can be a part of a strategic plan:

Prepare a written succession plan
Document all important procedures
Gradually turn over control of key relationships and duties
Purchase a life insurance policy

These are good points, but they contain a hidden fatal assumption, which is that your small business can actually be transferred to another owner. Many small businesses, especially in the service sector, are really the owner’s alter ego. In other words, customers buy from these types of businesses because they want the skills of the owner, not the business. You can see these in the professional arena like doctors, and obviously in the artistic world like acting.

However, it doesn’t have to be that way. Take Oprah, for example. If she restricted her business strategy to acting or performing as a talk show host, then her product would only last as long as the tape plays, or reruns. However, she leveraged her talent to produce other programs and the “O” network. Arguably, the “O” network will continue after she stops working.

But what about a small business? Does it stop existing when the owner retires? That is up to the owner. If the owner of a small business restricts the development of others in the company, then he will restrict the marketability of the company when he sells.

An owner must delegate in a planned manner with a vision. If the product or service requires the owner to personally be involved in all aspects, then the small business owner must use that “talent” to leverage other products or services that do not require the owner’s hand-holding. Once this is found, then a strategic plan can be developed and implemented. Then, the fort points offered in Periu’s article can be incorporated into the plan.

Business Security in an Insecure World

Over twenty-five years ago I met with a new client who told me why he fired his last accounting firm. He received a phone call from a good samaritan that the person had found
my client’s tax records in a phone booth. Apparantly, his CPA (from one of the largest CPA firms) had left my client’s tax records when he stopped to make a call in a phone booth.

There are so many opportunties in every business week, to compromise security. The article, 3 big security blunders You don’t know you’re making by Angela Stringfellow set up some blunders, guidelines and solutions:

Not implementing a mobile security policy. Protable devices are a security nightmare. In our CPA firm, nobody is to keep client’s records on a USB drive. We require that if a CPA (or bookkeeper) transfers information from a client’s computer to a laptop computer to be worked on later, we require their USB drive be erased and access to the laptop have a password. In addition, if the CPA (or bookkeeper) are accounting records, the access to those records be secured by a password. The mobile device referred to in the article are devices like cell phones and ipads that can log into a company’s server. For those kind of security breaches, the author recommends NQ Mobile to secure all mobile devices across the board.
Using cloud-based applications without security precautions. More and more CPA and accounting applications are developed on a cloud. You wonder how secure they are, and how secure your connection is. The author recommends that you understand that a cloud has 24/7 security with an adequate staff. As CPA’s we are the hub of clients’ information, so our security should be deliberate.
Failing to test third-party applications. This flaw is more technical than most CPAs can understand, but what the author states is that eventhough third-party applications test for security, a company’s internal security system can be compromising them. “The most common—and most dangerous—security flaws introduced by third-party apps include SQL injection and Cross-Site Scripting (XSS),” according to the author. The bottom line is to hire a company to assess your security protocols, and how that interact with third-party software.

Your company’s data is your lifeblood. But your concern must go beyond the company’s computers and to those who share your data like your attorney and CPA. The analysis should also work its way to your company procedures and empolyees. As a CPA firm, we have different measures to secure client’s check stock, tax returns, financial statements, personal information, etc.