The Tax Goddess Blog

Falbo's Home Maintenance

 Each Edition we will be introducing a new member of the SWC Network - This is a way for each member to get to know other members who are interested in participating.  This network is made up of our clients, trusted vendors, and SWC tested services and products.

This Edition's New Member is:

Falbo's Home Maintenance, LLC

FALBO'S
Home Maintenance, LLC

Falbo's Home Maintenance, LLC is one of the SWC "trusted" Members.  Falbo's Home Maintenance is a professional home repair service with 30 years experience, specializing in small to medium sized home repairs and improvements.  Falbo's can install, repair, improve, or build just about anything that you may need done around your home.  Don't waste time of money calling various contractors, Falbo's can do all the work on your "Honey-Do" list and make it a "Honey, Don't Worry About It" list!

Shauna's personal recommendation goes out for Falbo's Home Maintenance.  They have remodeled her personal kitchen, built out and installed various shelving and equipment in the old offices and the new office, and even have Shauna's trust enough to have a Key to her home! (They are THAT trustworthy and honest!).  Falbo's does what they say they are going to do and they do it with excellence!

Please email Falbo's at the above email link to learn more about the organization and it's services.

Tax Tricks! - Kids, Working, and Taxes

Dear Agatha the Auditor, I am the owner of a Vitamen Shop and have 3 children, ages 3, 7, and 15. I give the kids money out of the business for their allowance every week and someone said that I wouldn't be able to deduct that.  What can I do to make those monies a deduction for my business? Help, Concerned Owner in Scottsdale, ------------------------------------------------------- Dear Concerned Owner in Scottsdale, The "someone" you are referring to is right, but because you give your children cash out of your business does not make that a deduction for your tax return.  In order to make those monies a deduction from your company you may want to consider paying your children a wage (W-2 and all included!) By age, your children could do the following for their money: 3 - Your child could be on your marketing material!  They could get a modeling fee each quarter for the posing that they do. 7 - Your child could empty garbage cans, greet people in the shop & hand them their baskets at the front door. 15 - This child can run the register, bag purchases, help people out to their vehicles, run errands for you, etc. Each child, under the IRS rules for deductions, can get paid what it would be reasonable to pay someone doing that same job (so in some cases your 3 year old model-look-alike child could potentially make more than your 15 year old!) Make sure that you actually put them each on payroll, W-2 at the end of the year and all, so that there is no way the IRS can deny you the deduction you are now claiming. Even better, the kids don't need to know how much you are paying them.  Many parents pay at $10/hr and give the kids half, the other half being put into an IRA or other retirement plan on the child's behalf.  Think of the compounding!!! Of course, talk to your CPA regarding the details of your situation and what else can be done to help you deduct your costs! Yours, Agatha the Auditor

§529 Plans

529 Plans - Education & a Deduction!
Did you know???

Arizona enacted a new law that will begin in 2008 that allows contributions to ANY §529 plans (educational savings plans) to be deductible up to $750 / single person or $1,500 for married couples.

The deduction becomes available in 2008 and is supposed to sunset in 2012, however, we all know that once a "good" and helpful law goes into effect, no politician is going to let it lapse under their watch, so SWC expects this deduction to continue!

If you would like to know more about §529 plans you can check out the IRS's information link at: §529 Plan Information

W-9's - It's time to do a Mid- Year Checkup!

At the end of every year everyone scrambles to get their contractor information in order (in order to create year end 1099's companies must have a Form W-9 on file for each contractor). The Tax Goddess & her firm (SWC Business Enterprises, PC) Recommends that you spend a day going thru your payments to your contractors and fax out form W-9's to everyone.  Normally you want to do this process before you pay anyone a check, but sometimes we all know that process doesn't happen.  If you have any questions on what you need in your files, please call SWC at: 602-357-3275

Susan Timm - UMB of Arizona

For those of you who know Susan Timm (Susie Timm).

She has now switched banks from Chase to become the President of UMB Bank Arizona, the Scottsdale branch to be Opening in August 2007.  If you need to contact her or wish her congradulations please email her at: Susan Timm, President UMB Bank Arizona

Fitness 2 You

Each Edition we will be introducing a new member of the SWC Network - This is a way for each member to get to know other members who are interested in participating.  This network is made up of our clients, trusted vendors, and SWC tested services and products.

This Edition's New Member is:

Fitness 2 You

Fitness 2 You L.L.C. introduces "In-home" certified personal training to the valley of the sun.  We travel directly to your home, provide all of the necessary equipment, and offer a comprehensive program that gets you results fast! Our training system is *guaranteed to help you reach your fitness goals! Each client receives a customized program to optimize their results.  We offer only the latest training methods available to the health and fitness industry today.

They work primarily with "Functional" based programs. Functional training challenges our body's strength, balance, and power.  This type of training produces a highly effective program for their clients no matter what their age or fitness goal.

Fitness 2 you trains clients one-on-one and also incorporates "buddy training" a popular form of training that allows two clients to train together (i.e. friends, spouse, or family members) to simultaneously achieve their desired results, motivate each other, and cut down the cost of personal training.

1 Hour Free -
Consultation & Evaluation

1 Hour Evaluation and Consultation of your Current Fitness Goals and Methods.  Fitness2You will send one of it's trainers to personally meet with you and discuss your current goals and methods for getting in shape or losing weight and will help you determine what types of training might work best for you.  Call them at 480-816-3300 to schedule your free in-home consultation.


Please visit their website to learn more about the organization and it's products.

Tax Tricks! - Those Pesky Mileage Records

Dear Agatha the Auditor, I am a Realtor who drives EVERYWHERE! I've been told that I have to record every trip of every mile I drive, whether it's for business, personal, or just commuting.  Do I REALLY have to do that, or is my CPA just being picky? Help, Annoyed Recorder in Scottsdale, ------------------------------------------------------- Dear Annoyed Recorder in Scottsdale, There are many ways to record your travel milage. 1.  You could not record the mileage at all Of course, if you ever got audited, the 26,000 miles that you reported and got a nearly $12,000 deduction would be taken away completely and you would be required to pay back any taxes you saved on that deduction. 2.  Track 3 months of your travel and use that as an average for the 12 months during the year Unfortuantely, this does not prove that you are not seasonal.  For example, we all know that during the Summer, especially in Arizona, the real estate market slows down.  So if you used the first 3 months of the year, the auditor could argue saying that for the summer months the 3 months you recorded are not acceptable and the auditor could determine what rate THEY feel is acceptable! 3.  Track every BUSINESS mile For purposes of the deduction you take on your return, this is the only real mile tracking that the IRS cares about.  Since this is what your deduction may be based on, this is extremely important to protect not only your deduction but also your "good citizen" test in front of the IRS.  If you have immaculate mileage records they may let you slide on other things (like those pesky meal receipts) that tend to get easily lost. Of course, talk to your CPA regarding the details of your situation and what else can be done to help you deduct your mileage costs! Yours, Agatha the Auditor

Pay yourself, Not Uncle Sam, for your retirement

Paying Yourself with your Retirement Plan
Retirement?  I am just focusing on getting the business started let alone worried about retiring!

That is what a lot of beginning business owners say when their CPA or Financial Advisor talks to them about setting up a retirement account. What most business owners don't see are the benefits of setting up the accounts:

1.  You get to keep your money and the government doesn't!

Your company gets a deduction for the contributions made on your behalf and therefore the income that you pay taxes on (as the company owner) are lower!

2.  You are not required to pay in the money right away

In most cases there are lag times for contributions to the accounts, some as far as 9.5 months into the future!  2007 contributions for a self-employed Schedule C person do not need to be made until October 15th, 2008 but you get a 2007 tax return deduction for it!

3.  Depending on the Plan you can put away up to or greater than $44,000 per year into your own account! 

Let's see your previous employer to that!  In some cases, depending on your age, time to retirement, and amount you want at retirement, you can put away hundred's of thousands (the max I've ever seen is $276k) a year as a deduction from your companies income!)

As you can see there are some great benefits to putting money into your own pocket for your future!  A lot depends on starting early and starting right, so make sure you talk to your CPA to determine what is the best and most efficient kind of Retirement plan for you!

International Sales Pro's Association

Each Edition we will be introducing a new member of the SWC Network - This is a way for each member to get to know other members who are interested in participating.  This network is made up of our clients, trusted vendors, and SWC tested services and products.

This Edition's New Member is:

ISPA: International Sales Pros Association & Arizona Sales Pros

International Sales Pros Association was created to foster the education, motivation and community of all things sales on our planet.  Within their website you will find tremendous sales content from the leading experts in the field to grow skills, support from long standing sales professionals to assist in knowing what to say when while prospecting and a myriad of people just like yourself who work hard every day to grow their skills, support their community and live a good life.

Please visit their website to learn more about the organization and it's workshops, educational events, and networking opportunities!

Tax Tricks - Writing off the Dog (And not as a Dependent)

Dear Agatha the Auditor, I just got a new watch dog named Isis!  She is going to grow up to be a large dog and I want to be able to write off her training, the hundreds of bags of food, and her vet bills.  What can I do to make her a "business expense"? Help, Puppy Mom in Scottsdale, ------------------------------------------------------- Dear Puppy Mom in Scottsdale, Technically dogs are not write offs unless you own a business in which the dog is an Ordinary & Necessary business expense.  So, common businesses that can write off these kind of expense might be a Professional Dog Trainer or a Night Guard.  However,..... It all depends on how agressive you want to be.  In order for an expense to be Ordinary & Necessary it must be for the business purpose of the company.  So, take for example a firm that may have workers in the office late at night where the office is not in a "good" and "safe" nieghborhood, for that office a dog  who is trained in protection techniques could be a Necessary business expense.  It all depends on what you can prove to an IRS auditor is Ordinary & Necessary. Of course, talk to your CPA regarding the details of your puppy expenses and what else can be done to help you deduct additional costs! Yours, Agatha the Auditor