Attain Financial Freedom Blog

The guidance counselor at Monty Python reveals the dangers of accountancy and what it can do to young people.  Accountants think this is funny.

Social networking is the rage.  Even old guys like me are doing it.  Guess who else is on Facebook!  The Taxman.  A recent Wall Street Journal article describes how Facebook, LinkedIn and Google are becoming tools for finding tax evaders.  If you want to use Facebook - better be sure to pay your taxes first! 

See the Wall Street Journal article.

This week many bloggers hit the net with the news that rebates under the government’s Car Allowance Rebate System (CARS Program or Cash for Clunkers) are taxable to the consumer.  Are they right?  Yes and no. Read it all..

Here is a clip from The Tonight Show With Conan O’Brien.  Triumph the Insult Comic Dog attends the Bonnaroo music festival in Manchester, TN.  Warning - Rated TV-13:-).

NPR Commentator Frank Deford

This morning I heard a great commentary on the unknown dangers of playing football.   Studies are starting to show that professional football players have a higher incidence of Alzheimers and dementia than the general population.  It appears most of the damage may have occured in the youth football playing years.  All parents should listen to Frank Deford’s commentary of NPR.  Here is a quote:

As students head back to high school, some 1.2 million will suit up in helmets and shoulder pads.  But, an old NFL star who suffered a few concussions asks me: “How many mothers would let their boys play football if we knew what concussions could mean when these boys get older?”

Listen to the whole story.

The 401(k) plan is America’s new retirement plan. With this distinction also comes an increased focus from the Department of Labor (DOL) charged with overseeing qualified plans, and most recently members of Congress who have announced several bills aimed at providing adequate 401(k) Fee Disclosure to plan participants. At the heart of the focus from both groups, as well as many others in the retirement industry, is to determine if these plans are actually succeeding at their primary goal - that of helping participants save enough money for a comfortable retirement.

Most plan administrators are unaware of the true cost of their 401(k) plans.  Mutual funds in the plan pay fees to the advisor that are poorly disclosed.  An independent plan review can help you uncover these costs.  Watch this video to learn more about what you don’t know about your 401(k) plan.

401(k) Fees and Fiduciary Responsibility

2. Whether you are working as a waiter or a camp counselor, you may receive tips as part of your summer income. All tip income you receive is taxable income and is therefore subject to federal income tax.

3. Many students do odd jobs over the summer to make extra cash. Earnings you received from self-employment are subject to income tax. These earnings include income from odd jobs like baby-sitting and lawn mowing.

4. If you have net earnings of $400 or more from self-employment, you will also have to pay self-employment tax. This tax pays for your benefits under the Social Security system. Social Security and Medicare benefits are available to individuals who are self-employed the same as they are to wage earners who have Social Security tax and Medicare tax withheld from their wages. The self-employment tax is figured on Form 1040, Schedule SE.

5. Subsistence allowances paid to ROTC students participating in advanced training are not taxable. However, active duty pay - such as pay received during summer advanced camp - is taxable.

6. Special rules apply to services you perform as a newspaper carrier or distributor. You are a direct seller and treated as self-employed for federal tax purposes if you meet the following conditions:

• You are in the business of delivering newspapers.
• All your pay for these services directly relates to sales rather than to the number of hours worked.
• You perform the delivery services under a written contract which states that you will not be treated as an employee for federal tax purposes.

7. Generally, newspaper carriers or distributors under age 18 are not subject to self-employment tax.

The Church of the Hills PCUSA will be offering Dave Ramsey’s Financial Peace University starting September 9, 2009.  Classes will be part of the regular Wednesday night program and are open to the community as well as COH members.  Here are the particulars:

Where - The Church of the Hills - 10919 Bell Road, Johns Creek, GA 30097
When - Wednesday night from 6:00pm to 7:30pm starting September 9, 2009
Who - You and your spouse or significant other
Why - If you are having trouble keeping out of debt, saving money or just want to learn more about how you can control your money (and not let it control you).

The class will be facilitated by Cliff Davis CPA and will use the Financial Peace Curriculum.  There will be a cost for course materials - we will have details on that when we have a firm number of registrants.  Contact Cliff to register.

Anyone starting a new business this summer should be aware of their federal tax responsibilities. Here are the top seven things the IRS wants you to know if you plan on opening a new business this year.

1. First, you must decide what type of business entity you are going to establish. The type your business takes will determine which tax form you have to file. The most common types of business are the sole proprietorship, partnership, corporation and S corporation.
2. The type of business you operate determines what taxes you must pay and how you pay them. The four general types of business taxes are income tax, self-employment tax, employment tax and excise tax.
3. An Employer Identification Number is used to identify a business entity. Generally, businesses need an EIN. Visit IRS.gov for more information about whether you will need an EIN. You can also apply for an EIN online at IRS.gov.
4. Good records will help you ensure successful operation of your new business. You may choose any recordkeeping system suited to your business that clearly shows your income and expenses. Except in a few cases, the law does not require any special kind of records. However, the business you are in affects the type of records you need to keep for federal tax purposes.
5. Every business taxpayer must figure taxable income on an annual accounting period called a tax year. The calendar year and the fiscal year are the most common tax years used.
6. Each taxpayer must also use a consistent accounting method, which is a set of rules for determining when to report income and expenses. The most commonly used accounting methods are the cash method and an accrual method. Under the cash method, you generally report income in the tax year you receive it and deduct expenses in the tax year you pay them. Under an accrual method, you generally report income in the tax year you earn it and deduct expenses in the tax year you incur them.
7. Utilize all the resources available to you - the business section of IRS.gov, attorneys and a good CPA to make sure you get started right.   Contact us at www.JohnsCreekCPA.com to learn more about starting a new business.

I received this article in my mailbox today.  Boy did it hit home. If you have ever felt you are swimming upstream at work or home read this article.

Multitasking Devastates Efficiency
Written by Steve Marr
Wednesday, 15 July 2009
Today we all seem to wear multitasking as a badge of honor. The need to perform multiple tasks is assumed as we are pressured by customers, bosses, and the other demands of our work. We create a fury of activity with constant motion, which impresses those around us and even ourselves at how busy and productive we are.
However, true multitasking actually kills output rather than helping create it, and this has profound ramifications on our overall effectiveness on the job.

Read the Entire Article