It’s Tax Time!

Taxes2It’s the 2nd of January, the first work day of the year for many businesses.  Now that 2012 is over, it’s time to take a final measure of your accomplishments and report them to the IRS.  Here are 10 things you can do to get ready and make tax time easier.

  1. Record your vehicle mileage today!  If you take a deduction for business use of your vehicle, you will need a record of your mileage regardless of whether you choose the standard rate or actual expense method.  You will need the beginning and ending mileage for the year as well as a written record of the business miles driven through the year.
  2. Review your mileage records to make sure they are complete.  Use your date book to review your appointments and make corrections where necessary.  It may seem like a small thing, but $.55 per mile can really add up if you’re a “Road Warrior” by trade.
  3. If you sell product, get a physical count of your inventory as of the last day of 2012.  The sooner you get this done the better.   It can be difficult to try to figure out what you had a few days ago after you’ve added to your inventory or made sales.  Remember to also make a record of inventory pulled during the year for personal use.  Inventory pulled for personal use is generally not tax deductible so you’ll need to make adjustments accordingly.
  4. Take some time to organize your receipts, invoices, and other documents used in your business to record your income and expenses.
  5. Reconcile your bank accounts.  If you’ve properly utilized your business bank account during the year it will give you one of the most complete records of your business activity.  Keep your bank statements, business credit card statements, cancelled checks, deposit slips and receipts in a safe place.  You’ll need them later.
  6. Calculate your income and expenses for 2012.  This should be fairly easy if you’ve kept up with your bookkeeping.  If not, schedule a day to pull this information together using your bank statements, invoices, receipts and other income and expense related documents.  Your tax preparer can do this for you, but it will cost you.
  7. Create a place to gather all of the 1099’s, 1098’s, W-2’s and other tax forms you’ll be receiving during the month of January and early February.  Make sure you have all of them prior to filing your tax return.
  8. Review your payroll records for accuracy.  Make sure you pay your payroll taxes on time to avoid problems later.
  9. Issue W-9’s to everyone you’ve paid $600 or more for services rendered to you during the year.  Get those W-9’s back as soon as possible so 1099’s can be issued to them prior to February 1st.
  10. Contact your tax preparer to set-up your tax appointment and keep the appointment.  Sometimes having a deadline other than April 15th will help keep you motivated.  Remember, your tax preparer needs enough time to prepare your return so giving him or her records on April 14th and expecting a timely filing simply won’t do.

Here at Storehouse, we specialize in small business accounting.  Give us a call if you need help.

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How to Make a Successful New Year’s Resolution

This is the last day of 2012 and in anticipation of the New Year many people around the world are making resolutions to change things for the better in 2013.

The New Year’s Resolution dates back to ancient times and continues to be a popular tradition.  In various cultures people make promises to their gods or personal commitments to themselves to reform habits, or reach other goals as a sign of new beginnings for the New Year.  Popular resolutions include getting out of debt, making more money, getting a better job and giving more to the poor.  While these goals are positive and worthwhile, failure has also become a part of the tradition.

Individuals don’t often plan to fail, however in failing to plan, failure almost becomes inevitable.    According to some sources 80% of people will fail to reach their goals.  Around 50% of those will fail before the end of January.  So how can you make a successful resolution?

No matter when you decide to set a goal, there are some key components necessary to making it successful.  A goal needs is to be clearly defined.  A clear definition includes an object, a plan of action and a time frame.  I find these five questions useful in helping to define goals; what, who, when, how and where?

  1. What do you want to do?  Do you want to pay off all your debt this year?  If that’s not possible, how much do you want to pay off?  Your goal needs to be something you are excited about and something that you can reasonably attain.  It should also be something that will cause you to challenge yourself.  It should not be so easy that there’s no real sense of accomplishment when it’s attained.  It should also not be so difficult that it’s practically impossible to achieve.
  2. Who will your goal affect?  Will it involve your family or just you?  Is your spouse willing to make changes in spending habits to help you reach your financial goals?  To ensure your success you must have the support of everyone involved.  It just makes life easier.  You could fight the current, but your chances of success are improved if everyone is moving in the same direction.
  3. When will you start and how long will it take to complete.  Will you start in January or June?  Will it take three weeks or three months to accomplish your goal?  Setting time limits and benchmarks will help keep you motivated and give you a way to measure your success as you go along.
  4. How are you going to achieve your goal?  Will you need to get a second job, cut spending, or sell some stuff?  What bill will you pay off first?  How much extra money can you put towards paying that bill off?  Your method of operation needs to be clearly defined to keep you moving in the right direction.  It also needs to be written.  Use a written budget and a check register to track your spending and a journal to track your overall progress.
  5. Finally, where will you be once you’ve achieved your goal?  Begin with the end in mind.  What will you be able to do once you’re debt free?  Will you take your family on a dream vacation; take an early retirement?  What will you do?  It helps to visualize what reaching your goal will look like.  Get a magazine and cut out a picture of your dream vacation destination and hang it where you can see it often every day.  These visual reminders can get you excited about your goal and help keep you motivated.

The last thing to decide when setting goals is what you’ll do when things don’t go as planned.     What if you lose focus and blow your budget?  Will you allow a setback to completely derail your progress or will you work to get back on track?  Decide now to keep working on your goal no matter what happens and write your plan of action in your journal.  Don’t be afraid to make mistakes.  They happen and more often than not, they can be corrected.  Keep a positive mindset.  Look at your mistakes as opportunities to learn what not to do and move on.

I recommend listening to The Strangest Secret by Earl Nightingale to help with the process of setting and achieving goals.  This audio book can be found on iTunes and is a practical lesson in the importance and the practice of setting goals.

Contact us here at Storehouse if you need help putting those financial goals in place.  We’re here to help.

Happy New Year!

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The Debt Free Business – Giving to the Least of These

One aspect of good money management includes the concept of giving. Today’s culture seems to emphasize getting all you can, keeping as much of it as you can, and only using it to get even more.  There is nothing wrong with that mindset unless in the end all this getting is solely for self gratification.  Selfish ambition is a vicious cycle that eventually leads to spiritual and financial poverty.  There’s always more stuff to get so accumulation becomes a futile and endless pursuit.  The desires of the heart are never fulfilled, because you’re using the physical to fill a spiritual void.  On the outside everything looks great, but behind closed doors getters who never give are the least happy of all humans.

If you take a closer look, however, you will see that many of the wealthiest and most respected people in the world are givers.  They may give to their favorite church, university or charitable organization. You may see some of them sponsoring events to raise money for some philanthropic cause such as cancer research, domestic violence prevention, inner city education or some other cause.  Others run their own charitable foundations that are primarily funded by their own earnings or goodwill.  Whatever the means they find to give; whether it be in time, talent or treasure; they do in fact give and they give a lot.

Giving is a biblical principle and a requirement for those calling themselves the people of God.  Deuteronomy 10:17-19 says “For the Lord your God is God of gods, and Lord of lords, a great God, a mighty, and a terrible, which regarded not persons, nor taketh reward: He doth execute the judgment of the fatherless and widow, and loveth the stranger, in giving him food and rainment.  Love ye therefore the stranger: for ye were strangers in the land of Egypt.”  In Matthew 25:31-46 we find another example of God’s requirement to take care of the less fortunate. These words come directly from the mouth of Jesus: “Inasmuch as ye have done it unto the least of these my brethren, ye have done it unto me”.

God’s objective in blessing us with income or the means to create income is not only so we can provide for ourselves, but it is also so that we can provide for others who are not able to provide for themselves.  Allowing us to take part in making provision for persons less fortunate than ourselves gives us the opportunity to combat selfishness and self pity.  It also refines our characters and re-shapes us in an image more like our Creator.

Every business spending plan should include a line item for charitable giving.  Spiritual growth is not the only benefit of charitable giving, tax benefits could also be available.  In most cases charitable giving is not a deductible business expense, however it can be classified as another kind of expense if you receive some benefit from the gift.  One example of this would be receiving a half page ad in exchange for a donation to a local church group.  This donation could be classified as advertising.  If no such benefit is received and you’re running a sole proprietorship or other flow-through organization, your donation could be reported appropriately on your personal tax return.  Check with your tax professional for more information about how this could apply to your situation.

The bottom line is that we should be thankful for the blessings we’ve been given.  If we really take time to think about them all, big and small, we often find that there really are too many to name and not enough time to record them all.  Our only attempt to show God our appreciation for the gifts He’s given to us is to freely and cheerfully share them with others.

LaTonia Powers for

Storehouse Financial Management Services, LLC

A home-based, debt free, small business meeting the financial accounting needs of small businesses in north Alabama.

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The Debt Free Business – Getting Started

So you want to go into business for yourself.  You know what you want to do and how Open Signyou want to do it.  You’ve identified your service, you know your target customer intimately, and you’ve found the perfect office space to operate your new venture.  You can hardly stand the excitement as you envision all of the people lined up outside your door just waiting to exchange their money for your exciting new product or service.  Now all you need to get this venture started is some cash, so off to the bank you go to apply for a small business loan to get you started.

Before you jump in the car or start that simple application online consider that starting a business with debt may be one of the biggest mistakes made by first time business owners.  Even with a detailed plan, there are things that occur that it’s not possible to plan for and the worst case scenario is usually not included in most business plans.

Starting out debt free is the best way to start any business.  A business run without debt is a business run without outside pressure.  The owners are free to choose the best customers and let the others seek different suppliers, it can be run solely on the values of the owners without the temptation to compromise in order to meet outside obligations, and if, for whatever reason, the owners want to move on there is no continued obligation to meet.  Overall the planning and decisions made in a debt free business are better because they are made for the business and not for the bank.

Running a debt free business is not as hard as you may think.  Many businesses can begin with little or no cash.  It just takes some planning and a lot of patience.  Here are some suggestions on how to start and run a debt free business.

  1. Start small – Make a clear distinction between the wants and needs of the business.   Spend money only on what you truly need to get the job done.  All the extra stuff can be added as you grow.
  2. Run your business from home – This will keep overhead down and allow you to grow your business more quickly.  Less expense = more profit to reinvest in the business.
  3. Rent equipment as needed – Rented equipment works just as well at a fraction of the cost.  Renting in this case is not throwing money away as some people may suggest.  Generally equipment does not increase in value as you use it, so it’s not really an investment.  Renting actually helps you control your cost, eliminate waste and sample new equipment to find the best fit for your needs.  Once your cash flow increases and you can afford to make large purchases with cash, you’ll know exactly what you want to spend your money on.
  4. Have an emergency fund – What will you do if a customer doesn’t pay on time, if a computer stops working or if some other unexpected emergency arises?  Have some cash on hand to handle these little surprises.  They will happen.
  5. Reinvest a percentage of your profit back into the business – Do this regularly and you will have the cash available to grow you business.

With a little planning you’ll be well on your way to reaping the benefits of being a successful business owner.

 

LaTonia Powers for

Storehouse Financial Management Services, LLC

A home-based, debt free, small business meeting the financial accounting needs of small businesses in North Alabama.

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Avoiding Debt

The final principal of avoiding debt is probably where most businesses and individuals find the most trouble, and often disagree. There are some who believe that certain types of debt are good and believe that if you pay off your debt every month (credit cards) everything will be fine.

Proverbs 22:7 states “the rich rules over the poor, and the borrower is slave to the lender.” Think about how much of your time and resources are being used to service, or pay debts, and determine for yourself whether this statement is true. Recently many credit card companies have decided to double and triple the interest rates due on the accounts of regularly paying customers who may carry a balance each month. For those that do pay their balances off every month, the credit card companies are finding new ways to incorporate “service” fees on those accounts. How much input were those faithful and honest customers able to contribute before decisions were made that directly impacted their financial well being? Who’s really in control of your money?

Here at Storehouse Financial Management Services, we have made the personal commitment to run our business with zero debt. We encourage our clients to do the same, but recognize and respect that it is a personal decision. We do understand that there are times when taking on debt may be necessary. When these situations arise, it is our goal to educate our clients on the best ways to manage that debt.

Storehouse Financial Management Services was established to help you secure your financial future by implementing these concepts in a way that will ensure your financial success. Each plan is customized for your specific needs with the goal of enabling you to finally live the life you’ve always dreamed of.

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Saving

The third principle, saving, is often overlooked as an option or a luxury. However, without establishing a reserve, there will be nothing available to cover emergencies and nothing to finance the implementation of the plans you’ve made. One of the primary reasons that saving is so low on the list of priorities is the misconception that one must have a lot to save.

Proverbs 30:25 says “ants are a people not strong, yet they prepare their meat in the summer.” The tiny ants take small pieces to create their food store for less favorable times. It’s their diligence and the accumulation of the smaller parts that make their efforts successful. Building a savings account works the same way. It’s OK to start small as long as you start. The accumulation of small things is responsible for the sand on the seashore, the snow that blankets the northern part of our country in winter and the vast oceans that in their simplest form are only made of tiny water molecules. If it’s all you have to start, a little spare change can go a long way toward getting you on the path to a successful savings plan.

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Giving

In Malachi 3:10-11 the bible outlines one of the principle rules to financial success. In this particular text the writer is referring to the tithe, which is a tenth of the “first fruits”.

In modern language, the tithe was given to the temple treasury first, before any bills were paid or any purchases were made. The tithe was stored in the temple treasury where it was used to assist the less fortunate in the community; the widows, the orphans, etc. By returning the tithe, the giver was promised divine protection from loss and was promised an overflow of blessing, so much so that there would not be room enough room to keep it all.

We are not advocating that following this advice will unlock some genie like mechanism that will guarantee excessive wealth and provide a hedge against all losses, but we do believe in the soundness of the basic principles illustrated here. At its best, giving allows the giver to look outside of his or her own needs, and become a blessing to someone else.

Charitable giving is a principle practiced by many of the worlds wealthiest people, including Warren Buffett and Bill Gates. It’s been reported in that these individuals have contributed up to 82% and 48% of their net worth to philanthropic causes respectively. Now most people can’t afford to give such a large percentage of their net worth away, however whatever you are able to give, whether it be in money or in personal time and effort, the rewards that come from giving of yourself are priceless.

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Our Two Cents April Newsletter

Tax SeasonThe 2011 tax filing season is almost over. April 18th is the deadline to file your personal tax returns. Yes, April 18th. This year we all get three extra days to file because of a District of Columbia holiday. So if you’re stressing about getting this year’s return filed on time, be sure to thank your friends in D.C. for the extra time.

If you need more time to submit your return you can file an automatic extension that will give you another six months to pull those tax documents together. The extended period ends on October 17th. Please note however that if you owe tax, the amount due is payable on April 18th. An extension to file is not an extension to pay.

The IRS has reported that the number of tax payers filing electronically is increasing each year. Electronic filing has its benefits that include almost zero percent calculation errors and faster refunds. The average filer will receive his or her refund within eight days with direct deposit. Those receiving checks will usually receive their refunds within 14 days.

Many members of the U.S. population are concerned about the recent reports suggesting that there may be a government shutdown within the next few days. A government shutdown will affect the processing of your tax return. It is reported that tax payers taking advantage of e-file and direct deposit will not be impacted. Those filing paper returns and receiving refund checks can expect some processing delays. We’re all hoping of course that members of congress can come up with a budget that reflects the values of the American public and avoid the disruption of a shutdown.


Remember that Storehouse Financial Services is your one stop accounting shop. We offer bookkeeping, payroll, and tax services for businesses and individuals. We are also authorized to file tax returns electronically and do not charge extra for that service. Several payment options are available including cash, checks, and credit and debit cards. If prefer, you can also have your filing fees deducted directly from your tax return so you have no out-of-pocket expense to file with us. You can also receive a discount on your filing fees for referring a friend. Contact us for more information at 256-852-2619.


Dates to Remember


  • October 17, 2011 – Last day of six month extension to file Form 1040

Authorized e-file provider

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