To contact us Click HERE
This is a little confusing in that what one makes before retirement is relative to benefits they will receive upon retirement, especially with the rising or falling prices effecting living standards. What you make in preretirement will not be anything like what you will get from Social Security and with good reason. What you paid in is not even close to what you take out in retirement.
But hey, never mind all this confusion, the best way to retire is make sure you can live the life you think you want by preparing to live without Social Security. If you do this, and have the will power to deny yourself a little along the way, believe your retirement will be a breeze.
It's also important to point out, retirement is more then having enough money, it's about being satisfied with what you have and enjoy it. Don't complain about what you don't have as this will diminish the true returns of your new self directed life.
Myths and Realities of Social Security Replacement Rates
Source: Charles Blahous, "Understanding Social Security Benefit Adequacy: Myths and Realities of Social Security Replacement Rates," Mercatus Center, November 15, 2012.
November 28, 2012
The adequacy of Social Security benefits are often measured by the "replacement rate," a ratio of one's retirement benefit to preretirement income. While this is intended to provide equity in benefits over time, there are some misunderstood features that have some unintended consequences for the overall evaluation of the program, says Charles Blahous, a senior research fellow at the Mercatus Center and public trustee for Medicare and Social Security.
•First, younger workers' preretirement standards of living decline relative to their postretirement living standards because the cost of benefits increases over time.
•Second, the actual replacement rates are high because they are not reported as they would be calculated by financial planners.
•Third, the benefit formula causes replacement rates to rise over time for a given level of real wages.
There are also three often misunderstood aspects of Social Security replacement rate.
•First, the replacement rate is increasing relative to workers' standards of living. But since younger generations must pay higher tax burdens to receive the same replacement rates, there is a decline in net benefits.
•Second, Social Security replacement rates are higher than people assume. However, this assumes replacement rates as a percentage of career "wage-indexed" earnings, which results in under-evaluation.
•Finally, Social Security benefits are rising for a given level of real wages. However, the current benefit formula keeps replacement rates constant for average-wage workers, which delivers rising benefits to workers with the same real wages across time and contributes to rising system costs.
Furthermore, people are deterred from further labor market participation and saving because total retirement income replacement rates exceed 100 percent of late-career earnings. There are several reforms the federal government could pursue to make future program evaluation more accurate and help fix the finances of the program.
•First, prevent the decline in the ratio of preretirement income to postretirement benefits.
•Second, prevent Social Security from forcing low-income families and individuals from over-saving for retirement.
•Third, maintain constant replacement rates for those with the same real wages.
28 Kasım 2012 Çarşamba
I've Been Banned
To contact us Click HERE
So much for having a conversation.
I visited the FaceBook page, True Dinos, of a young Earth creationist (YEC) run a fellow named Aaron Tulllock. You can no longer see my posts, because I've blocked by the administrator for "being a troll."
What did I do?
I asked about the design of the vas deferens and the recurrent laryngeal nerve. [See Smack Down.] Here's what left of the comments about Intelligent Design.
Then there was my comments on this post. Since True Dinos is also a biblical literalist, I informed him that the bible literally claims that the Sun revolves around the Earth. When pressed by another YEC called The Question Evolution Project, I provided not only the biblical verses, but a link to other biblical literalists who truly believe in geocentrism. [Regular readers might know my earlier blog posts Your Elementary School Teachers Were Right and LA Times Does Story on Geocentrism.] He never responded; in fact, his comments on True Dinos have been wiped.
Since The Question Evolution Project was unwilling to confront his obvious hypocrisy on the bible being literally true, I visited The Question Evolution Project FaceBook page. Because I had the audacity to debate, he promptly blocked me .
Oh, what am I to do now?
If any of the administrators from those pages wish to comment on this blog, they are free to do so. All I ask is that they not do so anonymously. They are free to use whatever language they see fit to use. They will not be banned.
A bit more about these two pages.
Aaron Tullock (True Dinos) claims to have sighted a living pterosaur in 1995 in Marion County, Texas. The fossil and geologic evidence shows quite dramatically that these reptiles became extinct about 65.5 million years ago. An excellent resource for those interested in pterosaurs is Pterosaur.net.
The paleontologists there say
Now for The Question Evolution Project. In their About section, they write "true science is not afraid to examine contrary evidence and allows alternative theories to the interpretation of the evidence." Agreed. Science does not make progress without questioning. Consider the Copernican revolution or the quantum revolution. So why was I banned? I presented biblical evidence that didn't fit their preconceived notions about what the bible says.
On the other hand, "the Admins have other things to do besides engage in lengthy debates." It's strange that for people that being interested in "scientific evidence and its interpretation" and "intellectual honesty and freedom," they refuse to discuss anything. How does The Question Evolution Project feel about questions? They say "[the site] is for people who can think for themselves and dare to ask questions," but don't ask them if they're geocentrists, because that will get you banned.
One last item, The Question Evolution Project claims that evolution is not a fact." What do scientists say about that?
The National Academy of Sciences says
The American Association for the Advancement of Science states
I imagine The Question Evolution Project will just say we're being bullies.
 |
| CREDIT: True Dinos |
 |
| CREDIT: True Dinos |
So much for having a conversation.
I visited the FaceBook page, True Dinos, of a young Earth creationist (YEC) run a fellow named Aaron Tulllock. You can no longer see my posts, because I've blocked by the administrator for "being a troll."
What did I do?
I asked about the design of the vas deferens and the recurrent laryngeal nerve. [See Smack Down.] Here's what left of the comments about Intelligent Design.
 |
| CREDIT: True Dinos |
Since The Question Evolution Project was unwilling to confront his obvious hypocrisy on the bible being literally true, I visited The Question Evolution Project FaceBook page. Because I had the audacity to debate, he promptly blocked me .
Oh, what am I to do now?
If any of the administrators from those pages wish to comment on this blog, they are free to do so. All I ask is that they not do so anonymously. They are free to use whatever language they see fit to use. They will not be banned.
A bit more about these two pages.
Aaron Tullock (True Dinos) claims to have sighted a living pterosaur in 1995 in Marion County, Texas. The fossil and geologic evidence shows quite dramatically that these reptiles became extinct about 65.5 million years ago. An excellent resource for those interested in pterosaurs is Pterosaur.net.
The paleontologists there say
Unusual winged animals reported from around the world have been suggested by some cryptozoologists and creationists to be modern-day pterosaurs that survived the end-Cretaceous extinction event. From Africa, people have reported a semi-aquatic winged animal called the kongamato while on New Guinea and the surrounding islands sightings are claimed of a gigantic, bioluminescent, crested flying creature (the duah) and a smaller, long-tailed version, the ropen. Fossil evidence demonstrates overwhelmingly that pterosaurs did not survive beyond the end of the Cretaceous, and the sightings of pterosaur-like animals that have been reported appear to be a combination of hoaxes and misidentification of large birds and bats. So-called modern pterosaurs are generally ugly, dark, carnivorous, bat-winged horrors—they sound more like imaginary generic flying monsters than the pterosaurs we know from the fossil record.
Like these other foundational scientific theories, the theory of evolution is supported by so many observations and confirming experiments that scientists are confident that the basic components of the theory will not be overturned by new evidence.Plus technically speaking, pterosaurs aren't dinosaurs, although they did coexist.
Now for The Question Evolution Project. In their About section, they write "true science is not afraid to examine contrary evidence and allows alternative theories to the interpretation of the evidence." Agreed. Science does not make progress without questioning. Consider the Copernican revolution or the quantum revolution. So why was I banned? I presented biblical evidence that didn't fit their preconceived notions about what the bible says.
On the other hand, "the Admins have other things to do besides engage in lengthy debates." It's strange that for people that being interested in "scientific evidence and its interpretation" and "intellectual honesty and freedom," they refuse to discuss anything. How does The Question Evolution Project feel about questions? They say "[the site] is for people who can think for themselves and dare to ask questions," but don't ask them if they're geocentrists, because that will get you banned.
One last item, The Question Evolution Project claims that evolution is not a fact." What do scientists say about that?
The National Academy of Sciences says
Like these other foundational scientific theories, the theory of evolution is supported by so many observations and confirming experiments that scientists are confident that the basic components of the theory will not be overturned by new evidence.
The American Association for the Advancement of Science states
But the phenomenon of gravity, like evolution, is an accepted fact.
I imagine The Question Evolution Project will just say we're being bullies.
Dr. Oz's Diet Advice
To contact us Click HERE
I was really bored yesterday, August 6, 2012. Flipping through the channels, I came upon the Dr. Oz show, and I wondered what woo he was pushing today. Sure enough, he begins the show with metabolism boosters.
I immediately began to wonder whether a person can really boost their metabolism by simply drinking tomato juice spiked with a little Tabasco sauce and lime juice, but then he said this.
"And while wine snobs may not approve, adding ice chips to your red wine forces your body to burn calories, as it has to use its own energy to warm the liquid to body temperature."
Let's see what science has to say about this.
One learns in both physics and chemistry courses that to raise the temperature of any substance it takes an amount of energy equal to Q = mcdT where m is the mass of the substance, dT is the final temperature minus the initial temperature, and c is called the specific heat. The specific heat takes into account all the complicated physics and chemistry of how energy is distributed among the atoms and molecules.
I went to my freezer and looked at a ice cube - technically it's not a cube, it's a rectangular solid, but I'm being pedantic. I don't have a kitchen scale, so I'll determine its mass by measuring its dimensions. My cube is 5 cm by 3 cm by 3.5 cm or about 53 cm3. The density of ice is 0.998 grams per cubic centimeter, so I can calculate its mass by multiplying the density by the volume. Therefore, my ice cube's mass is 53 grams.
The ice will melt and cool the wine as cold as 0ºC. After you drink the wine, your body will warm the liquid to body temperature, about 37ºC.
The specific heat of water is 1 calorie per gram per Celsius degree. So your body will use
So your body has to expend almost 2 Calories to warm the cold wine. I think you can burn 2 Calories by breathing for a whole minute.
UPDATE: Oops! I made a mistake here. Your body has to warm all the liquid, not just the melted ice. If you have a standard serving of wine, 6 oz., then your body expends 8.5 Calories.
You can do a little better by eating the ice, since your body has to melt the ice, too. I''ll spare you the details, but that takes a whopping 4 10 Calories! Assuming you drink the wine, too.
Even if you live a sedentary lifestyle, you will burn at least 1200 Calories every day by just existing. This is your metabolic activity. If you are active, your metabolic activity can be as high as 3000 Calories.
If you want a little dieting advice, I share with you the only diet proven to work.
The Thermodynamic Diet
The 1st law of thermodynamics states that one cannot create nor destroy energy. All that can be done is to convert energy from one form to another. Your body converts chemical energy in the food to kinetic energy (energy of motion) and thermal energy (you may call that heat, but that's technically incorrect). Any energy not converted into these two forms may be converted into another form of chemical energy; that is, weight gain.
So the thermodynamic diet is burn more calories than you ingest.
I was really bored yesterday, August 6, 2012. Flipping through the channels, I came upon the Dr. Oz show, and I wondered what woo he was pushing today. Sure enough, he begins the show with metabolism boosters.
I immediately began to wonder whether a person can really boost their metabolism by simply drinking tomato juice spiked with a little Tabasco sauce and lime juice, but then he said this.
"And while wine snobs may not approve, adding ice chips to your red wine forces your body to burn calories, as it has to use its own energy to warm the liquid to body temperature."Let's see what science has to say about this.
One learns in both physics and chemistry courses that to raise the temperature of any substance it takes an amount of energy equal to Q = mcdT where m is the mass of the substance, dT is the final temperature minus the initial temperature, and c is called the specific heat. The specific heat takes into account all the complicated physics and chemistry of how energy is distributed among the atoms and molecules.
I went to my freezer and looked at a ice cube - technically it's not a cube, it's a rectangular solid, but I'm being pedantic. I don't have a kitchen scale, so I'll determine its mass by measuring its dimensions. My cube is 5 cm by 3 cm by 3.5 cm or about 53 cm3. The density of ice is 0.998 grams per cubic centimeter, so I can calculate its mass by multiplying the density by the volume. Therefore, my ice cube's mass is 53 grams.
The ice will melt and cool the wine as cold as 0ºC. After you drink the wine, your body will warm the liquid to body temperature, about 37ºC.
The specific heat of water is 1 calorie per gram per Celsius degree. So your body will use
Q = (53 g)(1 cal/(g ºC))(37ºC–0ºC) = 1961 calories.But I have to correct something here. A food calorie is different from a calorie. A food calorie, also called the Calorie (notice the capital C), is equal to 1000 calories.
So your body has to expend almost 2 Calories to warm the cold wine. I think you can burn 2 Calories by breathing for a whole minute.
UPDATE: Oops! I made a mistake here. Your body has to warm all the liquid, not just the melted ice. If you have a standard serving of wine, 6 oz., then your body expends 8.5 Calories.
You can do a little better by eating the ice, since your body has to melt the ice, too. I''ll spare you the details, but that takes a whopping
Even if you live a sedentary lifestyle, you will burn at least 1200 Calories every day by just existing. This is your metabolic activity. If you are active, your metabolic activity can be as high as 3000 Calories.
If you want a little dieting advice, I share with you the only diet proven to work.
The Thermodynamic Diet
The 1st law of thermodynamics states that one cannot create nor destroy energy. All that can be done is to convert energy from one form to another. Your body converts chemical energy in the food to kinetic energy (energy of motion) and thermal energy (you may call that heat, but that's technically incorrect). Any energy not converted into these two forms may be converted into another form of chemical energy; that is, weight gain.
So the thermodynamic diet is burn more calories than you ingest.
Get ready for the new year with January's Tax Due Date Reminders!
To contact us Click HERE
The staff at Holdsworth & Co. joins you in saying goodbye to 2011 and ringing in a healthy and prosperous 2012!
Thanks for visiting our recently launched blogsite. As we begin the new year, we want to help keep you on course with a list of tax due date reminders for January. We're happy to answer any of your questions and are just a phone call away.
The staff at Holdsworth & Co. joins you in saying goodbye to 2011 and ringing in a healthy and prosperous 2012!
Thanks for visiting our recently launched blogsite. As we begin the new year, we want to help keep you on course with a list of tax due date reminders for January. We're happy to answer any of your questions and are just a phone call away.
| January 10 | Employees - who work for tips. If you received $20 or more in tips during December, report them to your employer. You can use Form 4070, Employee's Report of Tips to Employer. |
| January 17 | Employers - Social Security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in December 2011.Individuals - Make a payment of your estimated tax for 2011 if you did not pay your income tax for the year through withholding (or did not pay in enough tax that way). Use Form 1040-ES. This is the final installment date for 2011 estimated tax. However, you do not have to make this payment if you file your 2011 return (Form 1040) and pay any tax due by January 31, 2012.Employers - Nonpayroll Withholding. If the monthly deposit rule applies, deposit the tax for payments in December 2011.Farmers and Fishermen - Pay your estimated tax for 2011 using Form 1040-ES. You have until April 17 to file your 2011 income tax return (Form 1040). If you do not pay your estimated tax by January 17, you must file your 2011 return and pay any tax due by March 1, 2012, to avoid an estimated tax penalty. |
| January 31 | Employers - Give your employees their copies of Form W-2 for 2011 by January 31, 2012. If an employee agreed to receive Form W-2 electronically, post it on a website accessible to the employee and notify the employee of the posting by January 31.Businesses - Give annual information statements to recipients of 1099 payments made during 2011.Employers - Federal unemployment tax. File Form 940 for 2011. If your undeposited tax is $500 or less, you can either pay it with your return or deposit it. If it is more than $500, you must deposit it. However, if you already deposited the tax for the year in full and on time, you have until February 10 to file the return.Employers - Social Security, Medicare, and withheld income tax. File Form 941 for the fourth quarter of 2011. Deposit any undeposited tax. (If your tax liability is less than $2,500, you can pay it in full with a timely filed return.) If you deposited the tax for the quarter in full and on time, you have until February 10 to file the return.Employers - Nonpayroll taxes. File Form 945 to report income tax withheld for 2011 on all nonpayroll items, including backup withholding and withholding on pensions, annuities, IRAs, gambling winnings, and payments of Indian gaming profits to tribal members. Deposit any undeposited tax. (If your tax liability is less than $2,500, you can pay it in full with a timely filed return.) If you deposited the tax for the year in full and on time, you have until February 10 to file the return.Individuals - who must make estimated tax payments. If you did not pay your last installment of estimated tax by January 17, you may choose (but are not required) to file your income tax return (Form 1040) for 2011. Filing your return and paying any tax due by January 31 prevents any penalty for late payment of last installment.Payers of Gambling Winnings - If you either paid reportable gambling winnings or withheld income tax from gambling winnings, give the winners their copies of Form W-2G.Certain Small Employers - File Form 944 to report Social Security and Medicare taxes and withheld income tax for 2011. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is $2,500 or more from 2011 but less than $2,500 for the fourth quarter, deposit any undeposited tax or pay it in full with a timely filed return. |
Discover Your Pot o' Gold...in Your Tax Deductible Vacation!
To contact us Click HERE
Tim, who owns his own business, decided he wanted to take a two-week trip around the US. So he did--and was able to legally deduct every dime that he spent on his "vacation". Here's how he did it.
1. Make all your business appointments before you leave for your trip.
Most people believe that they can go on vacation and simply hand out their business cards in order to make the trip deductible.
Wrong.
You must have at least one business appointment before you leave in order to establish the "prior set business purpose" required by the IRS. Keeping this in mind, before he left for his trip, Tim set up appointments with business colleagues in the various cities that he planned to visit.
Let's say Tim is a manufacturer of green office products looking to expand his business and distribute more product. One possible way to establish business contacts--if he doesn't already have them--is to place advertisements looking for distributors in newspapers in each location he plans to visit. He could then interview those who respond when he gets to the business destination.
In order to deduct all of your on-the-road business expenses, you must be traveling on business. The IRS states that travel expenses are 100% deductible as long as your trip is business related and you are traveling away from your regular place of business longer than an ordinary day's work and you need to sleep or rest to meet the demands of your work while away from home.
For every day you are on business travel, you can deduct 100% of lodging, tips, car rentals, and 50% of your food. Tim spends three days meeting with potential distributors. If he spends $50 a day for food, he can deduct 50% of this amount, or $25.
If you have a business day on Friday and another one on Monday, you can deduct all on-the-road expenses during the weekend.
The IRS says that you can deduct transportation expenses if business is the primary purpose of the trip. A majority of days in the trip must be for business activities, otherwise, you cannot make any transportation deductions.
Since Tim accrued six business days, he could spend another five days having fun and still deduct all his transportation to San Diego. The reason is that the majority of the days were business days (six out of eleven). However, he can only deduct six days worth of lodging, dry cleaning, shoe shines, and tips. The important point is that Tim would be spending money on lodging, airfare, and food, but now most of his expenses will become deductible.
Consult us before you plan your next trip. We'll show you the right way to legally deduct your vacation when you combine it with business. Bon Voyage!
Tim, who owns his own business, decided he wanted to take a two-week trip around the US. So he did--and was able to legally deduct every dime that he spent on his "vacation". Here's how he did it.
1. Make all your business appointments before you leave for your trip.
Most people believe that they can go on vacation and simply hand out their business cards in order to make the trip deductible.
Wrong.
You must have at least one business appointment before you leave in order to establish the "prior set business purpose" required by the IRS. Keeping this in mind, before he left for his trip, Tim set up appointments with business colleagues in the various cities that he planned to visit.
Let's say Tim is a manufacturer of green office products looking to expand his business and distribute more product. One possible way to establish business contacts--if he doesn't already have them--is to place advertisements looking for distributors in newspapers in each location he plans to visit. He could then interview those who respond when he gets to the business destination.
In order to deduct all of your on-the-road business expenses, you must be traveling on business. The IRS states that travel expenses are 100% deductible as long as your trip is business related and you are traveling away from your regular place of business longer than an ordinary day's work and you need to sleep or rest to meet the demands of your work while away from home.
For every day you are on business travel, you can deduct 100% of lodging, tips, car rentals, and 50% of your food. Tim spends three days meeting with potential distributors. If he spends $50 a day for food, he can deduct 50% of this amount, or $25.
If you have a business day on Friday and another one on Monday, you can deduct all on-the-road expenses during the weekend.
The IRS says that you can deduct transportation expenses if business is the primary purpose of the trip. A majority of days in the trip must be for business activities, otherwise, you cannot make any transportation deductions.
Since Tim accrued six business days, he could spend another five days having fun and still deduct all his transportation to San Diego. The reason is that the majority of the days were business days (six out of eleven). However, he can only deduct six days worth of lodging, dry cleaning, shoe shines, and tips. The important point is that Tim would be spending money on lodging, airfare, and food, but now most of his expenses will become deductible.
Consult us before you plan your next trip. We'll show you the right way to legally deduct your vacation when you combine it with business. Bon Voyage!
 |
| Dublin, Ireland |
Tim, who owns his own business, decided he wanted to take a two-week trip around the US. So he did--and was able to legally deduct every dime that he spent on his "vacation". Here's how he did it.
1. Make all your business appointments before you leave for your trip.
Most people believe that they can go on vacation and simply hand out their business cards in order to make the trip deductible.
Wrong.
You must have at least one business appointment before you leave in order to establish the "prior set business purpose" required by the IRS. Keeping this in mind, before he left for his trip, Tim set up appointments with business colleagues in the various cities that he planned to visit.
Let's say Tim is a manufacturer of green office products looking to expand his business and distribute more product. One possible way to establish business contacts--if he doesn't already have them--is to place advertisements looking for distributors in newspapers in each location he plans to visit. He could then interview those who respond when he gets to the business destination.
Example: Tim wants to vacation in Hawaii. If he places several advertisements for distributors, or contacts some of his downline distributors to perform a presentation, then the IRS would accept his trip for business.
Tip: It would be vital for Tim to document this business purpose by keeping a copy of the advertisement and all correspondence along with noting what appointments he will have in his diary.2. Make Sure your Trip is All "Business Travel."
In order to deduct all of your on-the-road business expenses, you must be traveling on business. The IRS states that travel expenses are 100% deductible as long as your trip is business related and you are traveling away from your regular place of business longer than an ordinary day's work and you need to sleep or rest to meet the demands of your work while away from home.
Example: Tim wanted to go to a regional meeting in Boston, which is only a one-hour drive from his home. If he were to sleep in the hotel where the meeting will be held (in order to avoid possible automobile and traffic problems), his overnight stay qualifies as business travel in the eyes of the IRS.
Tip: Remember: You don't need to live far away to be on business travel. If you have a good reason for sleeping at your destination, you could live a couple of miles away and still be on travel status.3. Make sure that you deduct all of your on-the-road -expenses for each day you're away.
For every day you are on business travel, you can deduct 100% of lodging, tips, car rentals, and 50% of your food. Tim spends three days meeting with potential distributors. If he spends $50 a day for food, he can deduct 50% of this amount, or $25.
Tip:The IRS doesn't require receipts for travel expense under $75 per expense--except for lodging.
Example: If Tim pays $6 for drinks an the plane, $6.95 for breakfast, $12.00 for lunch, $50 for dinner, he does not need receipts for anything since each item was under $75.
Tip: He would, however, need to document these items in your diary. A good tax diary is essential in order to audit-proof your records. Adequate documentation shall consist of amount, date, place and business reason for the expense.
Example: If, however, Tim stays in the Bates Motel and spends $22 on lodging, will he need a receipt? The answer is yes. You need receipts for all paid lodging.
Tip: Not only are your on-the-road expenses deductible from your trip, but also all laundry, shoe shines, manicures, and dry-cleaning costs for clothes worn on the trip. Thus, your first dry cleaning bill that you incur when you get home will be fully deductible. Make sure that you keep the dry cleaning receipt and have your clothing dry cleaned within a day or two of getting home.4. Sandwich weekends between business days.
If you have a business day on Friday and another one on Monday, you can deduct all on-the-road expenses during the weekend.
Example: Tim makes business appointments in Florida on Friday and one on the following Monday. Even though he has no business on Saturday and Sunday, he may deduct on-the-road business expenses incurred during the weekend.5. Make the majority of your trip days business days.
The IRS says that you can deduct transportation expenses if business is the primary purpose of the trip. A majority of days in the trip must be for business activities, otherwise, you cannot make any transportation deductions.
Example: Tim spends six days in San Diego. He leaves early on Thursday morning. He had a seminar on Friday and meets with distributors on Monday and flies home on Tuesday, taking the last flight of the day home after playing a complete round of golf. How many days are considered business days?All of them. Thursday is a business day, since it includes traveling - even if the rest of the day is spent at the beach. Friday is a business day because he had a seminar. Monday is a business day because he met with prospects and distributors in pre-arranged appointments. Saturday and Sunday are sandwiched between business days, so they count, and Tuesday is a travel day.
Since Tim accrued six business days, he could spend another five days having fun and still deduct all his transportation to San Diego. The reason is that the majority of the days were business days (six out of eleven). However, he can only deduct six days worth of lodging, dry cleaning, shoe shines, and tips. The important point is that Tim would be spending money on lodging, airfare, and food, but now most of his expenses will become deductible.
Consult us before you plan your next trip. We'll show you the right way to legally deduct your vacation when you combine it with business. Bon Voyage!
Tim, who owns his own business, decided he wanted to take a two-week trip around the US. So he did--and was able to legally deduct every dime that he spent on his "vacation". Here's how he did it.
1. Make all your business appointments before you leave for your trip.
Most people believe that they can go on vacation and simply hand out their business cards in order to make the trip deductible.
Wrong.
You must have at least one business appointment before you leave in order to establish the "prior set business purpose" required by the IRS. Keeping this in mind, before he left for his trip, Tim set up appointments with business colleagues in the various cities that he planned to visit.
Let's say Tim is a manufacturer of green office products looking to expand his business and distribute more product. One possible way to establish business contacts--if he doesn't already have them--is to place advertisements looking for distributors in newspapers in each location he plans to visit. He could then interview those who respond when he gets to the business destination.
Example: Tim wants to vacation in Hawaii. If he places several advertisements for distributors, or contacts some of his downline distributors to perform a presentation, then the IRS would accept his trip for business.
Tip: It would be vital for Tim to document this business purpose by keeping a copy of the advertisement and all correspondence along with noting what appointments he will have in his diary.2. Make Sure your Trip is All "Business Travel."
In order to deduct all of your on-the-road business expenses, you must be traveling on business. The IRS states that travel expenses are 100% deductible as long as your trip is business related and you are traveling away from your regular place of business longer than an ordinary day's work and you need to sleep or rest to meet the demands of your work while away from home.
Example: Tim wanted to go to a regional meeting in Boston, which is only a one-hour drive from his home. If he were to sleep in the hotel where the meeting will be held (in order to avoid possible automobile and traffic problems), his overnight stay qualifies as business travel in the eyes of the IRS.
Tip: Remember: You don't need to live far away to be on business travel. If you have a good reason for sleeping at your destination, you could live a couple of miles away and still be on travel status.3. Make sure that you deduct all of your on-the-road -expenses for each day you're away.
For every day you are on business travel, you can deduct 100% of lodging, tips, car rentals, and 50% of your food. Tim spends three days meeting with potential distributors. If he spends $50 a day for food, he can deduct 50% of this amount, or $25.
Tip:The IRS doesn't require receipts for travel expense under $75 per expense--except for lodging.
Example: If Tim pays $6 for drinks an the plane, $6.95 for breakfast, $12.00 for lunch, $50 for dinner, he does not need receipts for anything since each item was under $75.
Tip: He would, however, need to document these items in your diary. A good tax diary is essential in order to audit-proof your records. Adequate documentation shall consist of amount, date, place and business reason for the expense.
Example: If, however, Tim stays in the Bates Motel and spends $22 on lodging, will he need a receipt? The answer is yes. You need receipts for all paid lodging.
Tip: Not only are your on-the-road expenses deductible from your trip, but also all laundry, shoe shines, manicures, and dry-cleaning costs for clothes worn on the trip. Thus, your first dry cleaning bill that you incur when you get home will be fully deductible. Make sure that you keep the dry cleaning receipt and have your clothing dry cleaned within a day or two of getting home.4. Sandwich weekends between business days.
If you have a business day on Friday and another one on Monday, you can deduct all on-the-road expenses during the weekend.
Example: Tim makes business appointments in Florida on Friday and one on the following Monday. Even though he has no business on Saturday and Sunday, he may deduct on-the-road business expenses incurred during the weekend.5. Make the majority of your trip days business days.
The IRS says that you can deduct transportation expenses if business is the primary purpose of the trip. A majority of days in the trip must be for business activities, otherwise, you cannot make any transportation deductions.
Example: Tim spends six days in San Diego. He leaves early on Thursday morning. He had a seminar on Friday and meets with distributors on Monday and flies home on Tuesday, taking the last flight of the day home after playing a complete round of golf. How many days are considered business days?All of them. Thursday is a business day, since it includes traveling - even if the rest of the day is spent at the beach. Friday is a business day because he had a seminar. Monday is a business day because he met with prospects and distributors in pre-arranged appointments. Saturday and Sunday are sandwiched between business days, so they count, and Tuesday is a travel day.
Since Tim accrued six business days, he could spend another five days having fun and still deduct all his transportation to San Diego. The reason is that the majority of the days were business days (six out of eleven). However, he can only deduct six days worth of lodging, dry cleaning, shoe shines, and tips. The important point is that Tim would be spending money on lodging, airfare, and food, but now most of his expenses will become deductible.
Consult us before you plan your next trip. We'll show you the right way to legally deduct your vacation when you combine it with business. Bon Voyage!
27 Kasım 2012 Salı
Education Changes for Success : Parents & Competition
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All good ideas to change the outcomes of our failed educational system. The best of these incorporate the free market, that is competition.
Our public school system has failed our students, and will continue to do so if the community doesn't step in and make changes like the ones brought forward in this article. Basically though it will be the parents that make the difference in how the system is fixed.
But the problem here is, and has always been the problem, a lot of parents can't make the connection between success and failure as being determined by their lack of participation on their part in their children's education. Parents have to care and understand they are what will change the system.
Five Pathways to Fundamentally Reshaping American Schooling
Source: Jal Mehta, "The Futures of School Reform: Five Pathways to Fundamentally Reshaping American Schooling," American Enterprise Institute, November 14, 2012
November 27, 2012
The American education system is plagued with failed reform attempts that seek to correct the decline in student achievement, says Jal Mehta of the American Enterprise Institute.
•In the past, reformers have experimented with standards, vouchers, charters, merit pay and other methods for increasing student achievement.
•However, huge numbers of students -- nearly 40 percent to 50 percent in some urban districts -- don't graduate from high school.
•Furthermore, the United States ranks 14th in reading, 17th in science and 25th in math on international standardized tests.
There are five broad avenues that policymakers could take in order to make lasting changes to the educational system for the better.
First, transform the system by making the teaching profession more professional.
•Right now, the United States draws its teachers from the bottom two thirds of the distribution and gives them little training on the best methods for teaching.
•Instead, requirements for teaching should be tougher which would attract more skilled workers.
Second, replace traditional institutions with new actors such as charter schools. These schools currently provide competition to the traditional public school system but receive less support.
Third, rather than have a school that offers math, science, English and history, have a school function as a general contractor, bringing in different organizations that excel in teaching the various subjects. Some of these subjects might be taught online rather than in person, or through a combination of online practice and in-person coaching.
Fourth, create an out-of-school system that complements what children learn in school.
•Studies show that some students experience a "summer learning loss" that puts them behind their peers.
•Instead, an educational system that uses a student's free time outside of the classroom to reinforce concepts learned in school can help close the gap in student achievement.
Finally, dissolving the current system may do more in preparing students than any other option. Schools that teach from old textbooks fail to take into account how much information a student has at their fingertips with a computer. Employing committees comprised of adults at the state, district and school level can decide what should be taught at schools.
Our public school system has failed our students, and will continue to do so if the community doesn't step in and make changes like the ones brought forward in this article. Basically though it will be the parents that make the difference in how the system is fixed.
But the problem here is, and has always been the problem, a lot of parents can't make the connection between success and failure as being determined by their lack of participation on their part in their children's education. Parents have to care and understand they are what will change the system.
Five Pathways to Fundamentally Reshaping American Schooling
Source: Jal Mehta, "The Futures of School Reform: Five Pathways to Fundamentally Reshaping American Schooling," American Enterprise Institute, November 14, 2012
November 27, 2012
The American education system is plagued with failed reform attempts that seek to correct the decline in student achievement, says Jal Mehta of the American Enterprise Institute.
•In the past, reformers have experimented with standards, vouchers, charters, merit pay and other methods for increasing student achievement.
•However, huge numbers of students -- nearly 40 percent to 50 percent in some urban districts -- don't graduate from high school.
•Furthermore, the United States ranks 14th in reading, 17th in science and 25th in math on international standardized tests.
There are five broad avenues that policymakers could take in order to make lasting changes to the educational system for the better.
First, transform the system by making the teaching profession more professional.
•Right now, the United States draws its teachers from the bottom two thirds of the distribution and gives them little training on the best methods for teaching.
•Instead, requirements for teaching should be tougher which would attract more skilled workers.
Second, replace traditional institutions with new actors such as charter schools. These schools currently provide competition to the traditional public school system but receive less support.
Third, rather than have a school that offers math, science, English and history, have a school function as a general contractor, bringing in different organizations that excel in teaching the various subjects. Some of these subjects might be taught online rather than in person, or through a combination of online practice and in-person coaching.
Fourth, create an out-of-school system that complements what children learn in school.
•Studies show that some students experience a "summer learning loss" that puts them behind their peers.
•Instead, an educational system that uses a student's free time outside of the classroom to reinforce concepts learned in school can help close the gap in student achievement.
Finally, dissolving the current system may do more in preparing students than any other option. Schools that teach from old textbooks fail to take into account how much information a student has at their fingertips with a computer. Employing committees comprised of adults at the state, district and school level can decide what should be taught at schools.
Middle Class Businesses Crushed by New Tax : Obama's Profit Tax
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Think about this for a few minutes, 39% of small business are considered 'middle class' and they are the biggest producer of jobs in our country.
Mr Obama's tax on the rich brings these small businesses under the gun as they make over $250K, they are not millionaires or billionaires, but out of this $250K, they will use this to sustain themselves and grow the business.
The new tax rate will be nearly 44% or more which will force these small businesses to lay off or fire people just to stay afloat. Not to mention ObamaCare that will take what's left of any operating revenue the business might have.
Please explain to me why anyone, knowingly, would vote such a calamity?
Tax Hikes over $250k: End of the Upper Middle Class?
Source: Jacqueline Leo, "Tax Hikes over $250k: End of the Upper Middle Class?" Fiscal Times, November 13, 2012.
November 27, 2012
After winning a second term, the Obama administration plans to push forward with a tax hike on high income Americans. The current concerns over the fiscal cliff threshold have initiated faster actions, says the Fiscal Times.
Obama wants to start the tax hikes for those making $250,000 or more. This figure also includes working couples who have a combined income of $250,000. The tax increases on high-income earners would deliver about $42 billion in 2013. The increase will create a small 0.1 percent drag on gross domestic product (GDP), according to the Congressional Budget Office. However, the real cost might be much steeper.
No doubt, by most measures, a $250,000 household income is a large sum. Indeed, it is five times the national average -- just 2.9 percent of couples earn that much or more. However, one must also be cognizant of the cost of living in different regions.
•$250,000 is a lot of money -- especially if you live in, say Peoria, Illinois.
•But if you live in or around New York City, Los Angeles, San Francisco, Boston, Chicago or Dallas, you're not rich -- you're simply what is known as "upper middle class," according to Roberton Williams, an analyst at the Tax Policy Center.
•According to Salary.com, the cost of living in New York, for example, is 105.7 percent higher than in Peoria.
A theoretical working couple earning $250,000 annually, who also lives in a region with a high cost of living, has numerous financial responsibilities ranging from college and graduate school debt to housing costs in expensive areas.
•Two years ago, the Fiscal Times asked BDO USA, a national tax accounting firm, to compute the total state, local and federal tax burden of a hypothetical two-career couple with two kids, earning $250,000.
•To factor in varying state and local taxes, as well as drastically different costs of living, BDO placed the couple in seven different locales around the country with top-notch public school districts, using national government data on spending.
•The findings reflect that life is not an easy journey for working families earning $250,000.
•Even with an additional $3,000 in investment income, couples end up in the red -- after taxes, saving for retirement and their children's education, and a middle-of-the-road cost of living -- in seven out of the eight communities in the analysis.
Mr Obama's tax on the rich brings these small businesses under the gun as they make over $250K, they are not millionaires or billionaires, but out of this $250K, they will use this to sustain themselves and grow the business.
The new tax rate will be nearly 44% or more which will force these small businesses to lay off or fire people just to stay afloat. Not to mention ObamaCare that will take what's left of any operating revenue the business might have.
Please explain to me why anyone, knowingly, would vote such a calamity?
Tax Hikes over $250k: End of the Upper Middle Class?
Source: Jacqueline Leo, "Tax Hikes over $250k: End of the Upper Middle Class?" Fiscal Times, November 13, 2012.
November 27, 2012
After winning a second term, the Obama administration plans to push forward with a tax hike on high income Americans. The current concerns over the fiscal cliff threshold have initiated faster actions, says the Fiscal Times.
Obama wants to start the tax hikes for those making $250,000 or more. This figure also includes working couples who have a combined income of $250,000. The tax increases on high-income earners would deliver about $42 billion in 2013. The increase will create a small 0.1 percent drag on gross domestic product (GDP), according to the Congressional Budget Office. However, the real cost might be much steeper.
No doubt, by most measures, a $250,000 household income is a large sum. Indeed, it is five times the national average -- just 2.9 percent of couples earn that much or more. However, one must also be cognizant of the cost of living in different regions.
•$250,000 is a lot of money -- especially if you live in, say Peoria, Illinois.
•But if you live in or around New York City, Los Angeles, San Francisco, Boston, Chicago or Dallas, you're not rich -- you're simply what is known as "upper middle class," according to Roberton Williams, an analyst at the Tax Policy Center.
•According to Salary.com, the cost of living in New York, for example, is 105.7 percent higher than in Peoria.
A theoretical working couple earning $250,000 annually, who also lives in a region with a high cost of living, has numerous financial responsibilities ranging from college and graduate school debt to housing costs in expensive areas.
•Two years ago, the Fiscal Times asked BDO USA, a national tax accounting firm, to compute the total state, local and federal tax burden of a hypothetical two-career couple with two kids, earning $250,000.
•To factor in varying state and local taxes, as well as drastically different costs of living, BDO placed the couple in seven different locales around the country with top-notch public school districts, using national government data on spending.
•The findings reflect that life is not an easy journey for working families earning $250,000.
•Even with an additional $3,000 in investment income, couples end up in the red -- after taxes, saving for retirement and their children's education, and a middle-of-the-road cost of living -- in seven out of the eight communities in the analysis.
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