IRS Announces Tax Filing Delay

Per the IRS, if you file a Schedule A or take an education deduction, wait until mid Feb to file your returns!  IRS needs time to reprogram their systems due to late tax law changes.

Need help with your taxes?  Please let me know how I can help.

Reg Baker, CPA

http://www.regbaker.com/

The CFO & Marketing

CFO Perspectives

By Reg Baker, CPA PFS

The first question that might be asked is; what does a CFO know about marketing? Well the answer is really quite simple; it depends.

Some CFO’s may know a lot about marketing while others may know very little or nothing at all. But one thing is certain; CFO’s know how to measurer results. And everything that happens within an entity needs to have results; hopefully positive results.

As the old cliché goes, “if you can’t measure it, you can’t manage it”.

Every marketing initiative needs to have a stated objective that can be measured. What do you want to accomplish? When do you want to accomplish it? And how will we measure success? These basic questions need to be answered in order to determine whether the resources being used are being used wisely.

Marketing cannot be a silo and operate independently from the other managers and areas of the company. To create an effective marketing campaign there must be a team effort. The Sales department needs to provide feedback on what the customers value most and where customer service improvements can be made; operations needs to be involved to ensure what is being promised can be delivered, IT may need to design specific reports for different purposes and finance needs to monitor budgets and tract results. This Team works together, supports each other and tweaks the process as necessary. The objective is to have an effective marketing campaign that is successful in achieving the stated goals and objective; not protecting personal turf with the company. An effective CFO can contribute much to this process.

Of course some folks might not like the “measurement” idea. Who does like to be held accountable and evaluated based on achieving stated goals if they can avoid it? Especially if it has never been done before? If this is the case in your company then the time for change has come. No one can afford to be potentially wasting valuable resources (labor or cash) on projects that cannot be effectively managed and evaluated.

Summary –

A successful CFO can contribute in many ways to ensure a company is successful. The more integrated the CFO is involved with all aspects of a company’s operations the more effective they can be. The ramp up time may be different depending on the background and experience of the CFO but is certainly worth the effort.

Please contact me with your feedback at reg@regbaker.com.

I am looking forward to hearing from you or your staff with suggestions for future columns.

Reg Baker, CPS PFS
http://www.regbaker.com/

IRS Change-of-address Procedures

IRS Updates Change-of-address Notification Procedures

 If you have or are planning to move - whether it's a change of personal residence or a change of business address - you want the IRS to know about your change of address. The IRS has recently updated its procedures for taxpayers to follow when notifying the IRS of a change of address. The IRS uses a taxpayer's "address of record" for mailing certain notices and documents that the agency is required to send to a taxpayer's last known address.

The IRS's process for updating changes of address is important for both individual and business taxpayers because a notice or document sent to your (or your business') "last known address" is legally effective and binding, even if you never receive it because you have moved. This presumption of delivery includes such important correspondence as notices of deficiency, liens and levies.

Have you moved since April 15?

If you have already filed your federal income tax return (or any other respective business tax return, such as Form 1065, U.S. Return of Partnership Income), and have since moved from the address that you provided on your return, you need to inform the IRS. This is because the IRS automatically uses the address on your return as its "address of record." Thus, when a taxpayer files a tax return, such as a Form 1040, U.S. Individual Income Tax Return, the address on your return is automatically updated by the IRS after the return has been properly processed (tax returns are considered properly processed after a 45-day period that begins on the day after the return is received by the IRS.)

Therefore, if you move to a new address after filing your return, you need to ensure the IRS has your new address. This can generally be done in one of several ways. First, when a taxpayer provides the U.S. Postal Service (USPS) with a new address, the IRS automatically updates the taxpayer's address of record with the address maintained in the USPS's National Change of Address database. So, when you change your address with the USPS to have your mail forwarded to your new address, the IRS may also update you address of record based on the new address you provide the USPS. However, take caution. You should nonetheless notify the IRS directly of your change of address to ensure the IRS has your correct address. This can be done by filing Form 8822, Change of Address, with the IRS.

However, you can also provide the IRS with your change of address by giving the agency "clear and concise notification" of the change. This can be done electronically, written, or orally, and is discussed below. We recommend such follow-up notification just in case the IRS fails to follow one of its updating procedures.

Types of returns automatically updated when filed:

The IRS's updated procedure (Revenue Procedure 2010-16) not only lists the types of returns on which address provided thereon are automatically updated into its "address of record" database, it also makes clear that certain forms are not considered returns and therefore not automatically updated if a new address is listed. Specifically, a new address listed on (1) Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, or (2) Power of Attorney and Declaration of Representative, are not used by the IRS to automatically update a taxpayer's address. The IRS does not consider these to be returns. Therefore, if you file these forms providing a new address, you will need to use another method for informing the IRS of the address change, such as filing Form 8822.

The types of returns from which addresses are automatically updated by the IRS include, but are not limited to:

-- Individual income tax returns (e.g., Forms 1040, 1040A, Form 1040X, 1040-SS, 1040EZ, 1040NR, 1040NR-EZ); -- Gift, estate, and generation-skipping transfer tax returns (e.g. Forms 706 series, 709 series); and -- Returns filed under an employer identification number (e.g., Forms 720, 730, 940, 941 series, 943, 945, 940, 990 series, 1041, 1042, 1065 series, and 1120 series.

Comment. Because the IRS maintains address records for gift, estate, and generation-skipping transfer (GST) tax returns that are separate from records maintained for individual income tax returns, an individual's notification of a change of address should identify whether any gift, estate, or GST transfer tax returns are affected.

Documents and notices

The IRS uses the last known address for mailing a number of important documents and notices, as well as any refund you may be owed. Therefore, it is imperative for taxpayers to ensure that the IRS has your proper change of address information. Such notices and documents include, among others, deficiency notices, notices of intent to levy, notices and demand for tax, employment status determinations, notices of third party summonses, notices regarding interest abatements, and notices of final determinations regarding spousal support.

Clear and concise notification

Taxpayers that want to change their address of record can do so by providing the IRS with a "clear and concise notification" that is in accord with the agency's procedures. As previously mentioned, clear and concise notification may be made in writing, electronically, or orally. You must in any case, must provide the your full name, new address, old address, and Social Security number (SSN), individual taxpayer identification number (ITIN), or employer identification number (EIN) when providing the "clear and concise notification" procedures.

Written. The filing of Form 8822, Change of Address, is one way to meet the "clear and concise notification" requirement, for example. You can also provide the IRS with a written statement signed by you, informing the IRS you wish to change your address of record. You must include information such as your full name, new and old address, SSN, ITIN, or EIN as well. If you file a return with your spouse, you should both provide this information as well.

Electronic. You can also satisfy the "clear and concise" requirement by electronically notifying the IRS. You must use a secure application located on the IRS's website, www.irs.gov. A "secure application" is one that requires the taxpayer to verify the taxpayer's identity before accessing the application. However, other forms of electronic notice, such as emailing an IRS email address, do not constitute clear and concise notification.

Verbal. You can also provide the IRS with a change of address orally, by providing a statement - whether in person or directly via telephone -- to an IRS employee. Again, it is a good idea to follow up your telephone call with another call to verify that your address has in fact been inputted properly.

If you have any questions about change of address procedures, please call my office.

Reg Baker, CPA PFS
Cell: (702) 283-0784
Email: Reg@regbaker.com
Website: http://www.regbaker.com/

http://regbakercpa.blogspot.com/

www.linkedin.com/in/regbaker

Budgeting

CFO Perspectives

By Reg Baker, CPA PFS

How does a CFO create and manage a budget? And how does this help an entity be successful?

At this time of the year these are the types of questions being asked at all levels of an entity. There are many individuals involved with the budgeting process that, from my experience, do not fully appreciate their role or the importance of the process.

First and foremost, a budget is the road map of where an entity wants to go (please do not confuse a budget, which is a stretch target, with a cash projection, which is actual forecast; these are two entirely different reports). Some might say that the Business Plan is the map and they won’t be wrong. But it the budget that is the working document or tool that an entity and its leadership will use on a daily, weekly and monthly basis to reach the desired destination. The budgeting process has two primary (big picture) components. There first component is the Creation of the budget and then there is the Monitoring component.

Creation: The creation of a budget requires great coordination and teamwork. The CFO begins the process by designing the format that will be used by the entity, communicating specific assumptions (like sales growth, payroll increases, inflation rate, etc.) to the managers and educating the entities managers and staff on how to complete the budgeting forms. The CFO’s staff may even complete a large portion of the budget forms to assistant the line managers and ask for them to review, tweak, correct and submit for approval. The CFO will then review the results, determine whether the individual (departmental) budgets are consistent with the recommended assumptions, consolidate the various departmental totals into a combined entity wide budget and discuss with the “C” Suite Team the results. If necessary, the “C” suite will either refine the budgets and communicate the final results (top down approach) or ask the line managers to rework the budgets and resubmit for approval (bottom up approach). Regardless of the process, the ultimate goal is to have a final budget that all managers and have participated in creating and they “buy in” to the result. Some entities are m ore successful with this final “buy in” than others.

Monitoring: Once the final budget is approved and communicated to all managers the real work begins. Every month, as soon as possible after the month-end close so the month’s results are still fresh on everyone’s minds, a comparison of the actual results for the month are compared to the budgeted amounts. Significant variances are reviewed, analyzed and explained. Corrective action is taken as necessary. Most important are the trends and what is being done to keep the entity on track to meet or beat the budget! This analysis includes both revenues and expenses. Although the primary objective is the success and profitability of the entity, the budget can also be used to monitor the effectiveness of the entities managers.

An effective budgeting process can be a very effective tool in managing the entity and keeping the managers focused on a common goal.

Please contact me with your feedback at reg@regbaker.com.

I am looking forward to hearing from you or your staff with suggestions for future columns.

Reg Baker, CPS PFS

Internet Sales Increase 14%

Internet sales up over 14% this weekend!  Are you online and got your share?  If not, let me know.  I can help!

I have a technology client that is one of the best in Hawaii.  Well recognized and respected.  Been in the business for almost 20 years.  They can have you up and running on the internet for much less than you think.

Follow this link and check them out.  http://www.supergeeks.net/   Deal directly with Kim Kerr (the owner) and let Jim know that Reg sent you.  Let me kow if I can help.

Reg Baker
http://www.regbaker.com/ 

Small Businesses Need Help!

According to the SBA, "the cost of doing business is 36% higher at small companies compared with their larger counterparts, a representative of the Small Business Administration told the Senate. The added costs are the result of government regulations including tax-related costs and environmental requirements. The disparity makes it more difficult for small businesses to compete, said Winslow Sargeant, the agency's chief counsel for advocacy".

A couple of interesting facts; small businesses employ the majority of all workers and are usually the first to recover from a slow economy.  Contrary to popular thought, small business owners are not wealthy and struggle just like everyone else.  In most cases they struggle even more than their employees!

We need to reduce regulation, cut small business taxes and do everything we can to promote small business.  We need to help small businesses to survive so that they can begin hiring again and put America back to work!

Reg Baker, CPA

Getting Better?

Business is beginning to pick up. Getting real busy! Anyone else see this?

I have closed several new accounts in the past month. I am seeing signs that more business is coming. I haven't seen this type of activity for over a year or more. Is it possible that the end of the Great Recession is coming to an end?

Let's hope this trend continues for a long time........

Veterans Day

Today is Veterans Day! 

Proud to say I did my tour with the Navy in SE Asia (1974 to 1975). 

Where would America be without her Veterans?  Would there even be an USA?

If you see a Vet today, please thank them!

Reg Baker

What you need to know about putting your business online

Super Geeks - Guest Blogger

"If your business is not online, you're dead."

 

I recently overheard a colleague say that. Harsh words. But take a look around. Big companies are actually going out of business. Blockbuster underestimated Netflix.com and is now shuttering thousands of stores. Barnes & Noble was slow to leverage the internet and now the whole company is up for sale.

If well-funded companies like those are feeling the impact of the internet, you can imagine how serious it is for the little guy. But as my grandfather used to say: You never want to miss a good crisis.

 

Now's the time to retool your business around the internet.

If you do it right, you may be able to eat the big boys' lunches!

Read my Pacific Business News column on what we did for ProImageHawaii.com and how you can use the internet to build your company's bottom line.

Here are my 10 tips for getting going with e-commerce success.

We can help.

Want a custom website for your business? Does your existing site need to be modernized? Request a FREE quote on your project. http://www.supergeek.net/

Nearly two-thirds of retailers, or 64 percent, expect their companies' online revenue to increase by at least 15 percent compared with last year, according to a survey by the National Retail Federation's Shop.org online arm. Read more at http://www.staradvertiser.com/.

Always, always emulate best practices. These companies do e-commerce well:

 

http://www.amazon.com/ - the epitome of ecommerce

http://www.dell.com/ - customized shopping + concierge

http://www.iqvc.com/ - easy to find what you're looking for
http://www.clinique.com/ - site bonds well with shopper right away
http://www.fogdog.com/ - good, easy access to big inventory

Reg Baker comments:  James Kerr and Super Geeks have been clients of mine for over 15 years.  James and his Team are great to work with and gets results.  Please contact him via his website http://www.supergeeks.net/ or call (808) 531-GEEK (4335).

I'd be happy to work with you and Super Geeks to get you online and generating internet sales dollars! 

Reg Baker, CPA

(702) 283-0784

Email: reg@regbaker.com

Year End Tax Tips

Please check out my website for yearend tips on reducing your tax payments (posting on November 1). Only two months left! www.regbaker.com/newsletter.html


Although still a challenge due to possible year tax changes by the current administration, there are some steps you can take to reduce the bite of the tax man.

If no tax changes occur before year end then consider taking as much income this year (2010) and push deductions to next year (2011). If the Obama gang extends the current tax cuts then do the opposite.

If in doubt, then give me a call or email.

Reg Baker, CPA
Ph: (702) 283-0874
Email: Reg@regbaker.com

Non-Profit Tax Status Might Be Lost!

Non-profits must file their tax return by October 15 or run the risk of losing their non-profit status!

Please see the IRS notice below for more specifics. Contact me should you need help.

Ten Things Tax-Exempt Organizations Need to Know About the Oct. 15 Due Date

A crucial filing deadline of Oct. 15 is looming for many tax-exempt organizations that are required by law to file their Form 990 with the Internal Revenue Service or risk having their federal tax-exempt status revoked. Nonprofit organizations that are at risk can preserve their status by filing returns by Oct. 15, 2010, under a one-time relief program.

The Pension Protection Act of 2006 mandates that most tax-exempt organizations must file an annual return or submit an electronic notice, with the IRS and it also requires that any tax-exempt organization that fails to file for three consecutive years automatically loses its federal tax-exempt status.

Here are 10 facts to help nonprofit organizations maintain their tax-exempt status.

1. Small nonprofit organizations at risk of losing their tax-exempt status because they failed to file required returns for 2007, 2008 and 2009 can preserve their status by filing returns by Oct. 15, 2010.

2. Among the organizations that could lose their tax-exempt status are local sports associations and community support groups, volunteer fire and ambulance associations and their auxiliaries, social clubs, educational societies, veterans groups, church-affiliated groups, groups designed to assist those with special needs and a variety of others.

3. A list of the organizations that were at-risk as of the end of July is posted at IRS.gov along with instructions on how to comply with the new law.

4. Two types of relief are available for small exempt organizations — a filing extension for the smallest organizations required to file Form 990-N, Electronic Notice and a voluntary compliance program for small organizations eligible to file Form 990-EZ, Short Form Return of Organization Exempt From Income Tax.

5. Small tax-exempt organizations with annual receipts of $25,000 or less can file an electronic notice Form 990-N also known as the e-Postcard. To file the e-Postcard go to the IRS website and supply the eight information items called for on the form.

6. Under the voluntary compliance program, tax-exempt organizations eligible to file Form 990-EZ must file their delinquent annual information returns by Oct. 15 and pay a compliance fee.

7. The relief is not available to larger organizations required to file the Form 990 or to private foundations that file the Form 990-PF.

8. Organizations that have not filed the required information return by the extended Oct. 15 due date will have their tax-exempt status revoked.

9. If an organization loses its exemption, it will have to reapply with the IRS to regain its tax-exempt status and any income received between the revocation date and renewed exemption may be taxable.

10. Donors who contribute to at-risk organizations are protected until the final revocation list is published by the IRS.


Reg Baker, CPA
http://www.regbaker.com/

IRS Mandatory Preparer Registration Begins!

IRS just launched their mandatory tax preparer registration system.  Make sure your preparer has registered and is legal!

All preparers are required to register and have a PTIN (Preparer Tax ID Number).  If your preparer does not have a PTIN then they are not registered or allowed to prepare and file tax forms with the IRS.  This will definitely cause problems for the preparer and could complicate things for the tax payer.

Word of caution - just because your preparer has registered does not mean they are qualified.  Ask them about their certifications, training, continuing education and length of experience.  In this economy many unemployed and underemployed are claiming to be experienced tax preparers and offering their services to the public to make an extra buck.  Do not be fooled but these newbies; they can really cause you problems with the IRS and then you will have to pay higher fees later to a real professional to fix their mistakes.   

If in doubt ask for a second opinion.  It can save you a lot of stress later.

Reg Baker, CPA

www.regbaker.com

Self Employed Medical Insurnace Deduction

For the first time ever the self the employed can deduct their medical insurance premiums on Schedule C shaving 15.3% off their tax bill. Don’t miss this!

Normally these insurance deductions are taken in other sections of the tax return helping reduce income taxes but not the 15.3% self employment tax. For the first time (for 2010 only, at least for now) this deduction can be taken on Schedule C and reduce self employment taxes (15.3%) and cut your income tax bill.

Although it is hard to understand why the Washington has finally decided to treat the self employeds the same as any other business this is an opportunity you don’t want to miss.

Let me know if I can be of any help!

Reg Baker, CPA
http://www.regbaker.com/

IRS Open House for Veterans

September 25th – IRS Open House for Veterans. 

See http://www.irs.gov/localcontacts/article/0,,id=220631,00.html for locations. 

See the IRS announcement below -

The Internal Revenue Service will host a special nationwide open house in 100 offices across the country on Saturday, Sept. 25 to help taxpayers –– especially veterans and people with disabilities –– solve tax problems and respond to IRS notices. IRS staff will be available on site or by telephone to help taxpayers work through issues and leave with solutions.


Here are five things you need to know about the special open house.

1. One hundred offices, at least one in every state, will be open from 9 a.m. to 2 p.m. local time.
2. In many locations, the IRS will partner with organizations that serve veterans and the disabled to offer additional help and information to people in these communities.  
3. IRS locations will be equipped to handle issues involving notices and payments, return preparation, audits and a variety of other issues.
4. Taxpayers requiring special services, such as interpretation for the deaf or hard of hearing, should check local listings and call the local IRS Office/Taxpayer Assistance Center ahead of time to schedule an appointment.
5. A complete list of IRS offices open on Saturday, Sept. 25 is available at IRS.gov.

Good Luck!

Reg Baker, CPA
http://www.regbaker.com/

Employee Appreciation

On my way to attend a early morning ceremony honoring outstanding employees. We need more of these!

We need to recognize the efforts of employees every chance we get. It is the employee that is the face of the company and it is critical to keep them motivate and “happy”. In many (if not all) companies it is the employee that can make or break its success.

If you see an opportunity to show appreciation to an employee (whether your company or someone else’s) please do so. Positive feedback is always appreciated and can be highly motivational.

Reg Baker, CPA
http://www.regbaker.com/

Obamacare Lawsuit Status

Obamacare Insurance Costs Skyrocket!

I recently attended a briefing on the Obamacare lawsuit filed by over 30 states; including Nevada (despite Nevada's Attorney General refusal to participate). I was stunned to learn that the average annual insurance cost that the young & healthy will need to cover when Obamacare is fully implemented is about $15,000 per household. This is a greatly inflated amount (for the young and healthy) that is necessary to cover the insurance costs for the rest of the nation.


Personally I am seeing 20 to 30 percent increases for my clients when they renew medical coverage for their employees. The insurance companies are increasing premiums due to the Obamacare mandates of not allowing preexisting conditions and eliminating caps on benefits to pay out. With these huge premium increases many employers are either passing the increase on to employees or dropping coverage all together. The promise Obama made of no increase cost has, as expected, proven to be false and misleading. It is no wonder that Obama’s approval rating is at record lows.


The other issue the lawsuit addresses is the federal government’s mandate that all citizens are required to purchase a specific product (i.e. medical insurance), regardless of state governments laws. This type of specific product federal mandate that overrules state laws has never, in the history of our nation, been done before. The theory is if we let this happen now what is next? Is a federal mandate to purchase a GM vehicle to support the auto industry or maybe borrow money to support the banking industry next? Silly as it may seem, there is no way to predict what will happen next. Just look at prohibition, $700 screwdrivers and federal grants to study the habits of ants in Africa


In the early days of our country, the states allowed a federal government to exist as long as state rights were not overridden. The Obama administration is attacking this very basic principal that our country was built on and intentionally ignoring our countries founding fathers intent.

Let’s hope that the lawsuit is successful.

1099 Contractors Being Challenged Again

IRS looking at 1099 contractors again. Are you prepared? Penalties are huge if reclassed to employee!

Dredit Card Debt Down!

Consumers paying off credit card debt much faster than before the Great Recession!  Maybe caused by bankruptcy filings?!  LMAO

With unemployment and underemployment at record highs and businesses shutting their doors everyday, how can consumers be paying off their debt?  The only way I can think of is that the debt is being discharged through bankruptcy. 

Okay, maybe some are biting the bullet and cutting back on their expenses, which is the smart thing to do.  But with retail sales numbers flat or slightly better than last year this strategy of cutting back does not seem to be widespread. 

What will happen when the double dip recession slaps us all in the face and layoffs, downsizing and reduced hours start all over again??  We will all wish that we had cut back, reduced our debt and been better prepared.

Good luck to all those trying to survive out there!

Reg Baker, CPA
www.regbaker.com

Getting Better or Worse?

Corporate downsizing continues by cutting hours or staff. Bankruptcy’s increasing; especially those converting Ch 11 to 7 which do not show as a new filing (thereby understating the numbers).


I can't help but wonder if the economy is getting better or continuing to drift downward. Many of my clients are in desperate need of cash flow. Many have filed Chapter 11 to reorganize but cannot survive even with court protection. They have no choice but to convert to a Chapter 7 (liquation) but are having a challenge paying the fees and costs to shut down. So there are running away in the middle of the night……

It may be another two year or more before we see any significant signs of recovery. If this is the case it will be a very long two years!

Good luck to all of you struggling to keep your heads above water!

Reg Baker, CPA

Tax Preparer Registration is Finally Here!

Is Your Tax Preparer Registered?

IRS is now registering all tax preparers. I registered years ago. Is your tax preparer registered? If not, why not?

The IRS is implementing new registration requirements for all tax preparers. Each preparer will be issued a Preparer Tax Identification Number (PTIN). The cost is expected to be about $50 a year with a possible small processing fee. The $50 is not very much money to ensure that all tax preparers are legitimate.

There will also be a tax exam requirement to ensure a basic understanding to the tax code, rules and regulations. This will be phased in over the next year or two. The tax exam should be a relatively easy one to pass for those preparers that are trained on the basics and know what they are doing.

If your current tax preparer is not registered you need to find out why. The cost of $50 should not be the issue. Loss of privacy should not be the issue; like I mentioned above, I have been registered for years and have never had an issue with the IRS invading my privacy. So if they are not registered there must be another reason other than cost or privacy concerns.

Has your preparer passed a tax competency test? If not ask why? Don’t be fooled with the worthless “in-house” tests given by some tax preparation firms to their employees. There is a clear conflict of interest with companies testing their own employees on tax rules so they can go out and generate tax revenue for them. The tax test needs to be given by an independent third party for it to be considered legitimate.

The world of tax preparation is finally changing in a positive direction! No more shady under the table deals, scams and rip offs. By requiring a basic understanding of the tax rules and registration, the level of knowledge and professionalism will certainly improve.

Reg Baker, CPA PFS
http://www.regbaker.com/
reg@regbaker.com

Tax Scam Alert

IRS issued another tax scam alert.

Watch for bogus IRS letters & emails claiming you have a refund or credit due you!

This happens a lot more often when the economy is suffering. The scammers are out there trying to take advantage of those hurting the most. Don’t be fooled!

If you receive a letter form the IRS check with your local IRS office or CPA to determine if it is authentic. Be especially suspicious if the letter or email is asking for you to respond with social security number or other personal information and there is a short time frame. The IRS normally does not work this way.

Contact me if you need a second opinion!

Reg Baker CPA PFS
Reg@regbaker.com
http://www.regabker.com/

Financial Literacy Presentations

Financial Literacy is a Must

To ensure a comfortable future we must all be financially literate. I do group presentations in less than an hour that can change lives.

A variety of topics can be selected including:

• Why should I join a 401k?
• What is a family financial plan?
• How can I start building some savings?
• What caused the real estate melt down?
• How to pay for college?
• Can I afford to retire?
• How can I help my kids or parents?
• How can I learn more and get financially literate?

The list can go on and on. The bottom line is that everyone needs to become aware of how a basic understanding of personal finance can affect their lives and the well being of their family’s.

Knowing all the answers is not possible; but knowing when to ask for help or where to find it absolutely possible.

In less than 60 minutes I can provide some basic tools to help those needing help get it. This is a great benefit to non-profits members and company employees.

Contact me for more information!

Reg Baker, CPA PFS
http://www.regbaker.com/
reg@regbaker.com

Deduct Job Hunting Expenses

Six Tax Benefits for Job Seekers

(IRS Tax Tips) 

Did you know that you may be able to deduct some of your job search expenses on your tax return?

Many taxpayers spend time during the summer months updating their résumé and attending career fairs. If you are searching for a job this summer, you may be able to deduct some of your expenses on your tax return. Here are six things the IRS wants you to know about deducting costs related to your job search.  

1. To qualify for a deduction, the expenses must be spent on a job search in your current occupation. You may not deduct expenses incurred while looking for a job in a new occupation.
2. You can deduct employment and outplacement agency fees you pay while looking for a job in your present occupation. If your employer pays you back in a later year for employment agency fees, you must include the amount you receive in your gross income up to the amount of your tax benefit in the earlier year.
3. You can deduct amounts you spend for preparing and mailing copies of your résumé to prospective employers as long as you are looking for a new job in your present occupation.
4. If you travel to an area to look for a new job in your present occupation, you may be able to deduct travel expenses to and from the area. You can only deduct the travel expenses if the trip is primarily to look for a new job. The amount of time you spend on personal activity compared to the amount of time you spend looking for work is important in determining whether the trip is primarily personal or is primarily to look for a new job.
5. You cannot deduct job search expenses if there was a substantial break between the end of your last job and the time you begin looking for a new one.  
6. You cannot deduct job search expenses if you are looking for a job for the first time.

For more information about job search expenses, see IRS Publication 529, Miscellaneous Deductions. This publication is available on IRS.gov or by calling 800-TAX-FORM (800-829-3676).

 

Contact me if you need advice on how to take advantage of these deductions.

Reg Baker, CPA PFS
(702) 283-0784
reg@regbaker.com
http://www.regbaker.com/

Are Banks Really Lending?

Banks say they have plenty of money to lend. But are they lending?

What has been your experience?

Some of my clients (some very credit worthy with cash in the bank; and with over 15 years in banking I would know about credit worthiness) are being told by their bank's "Relationship Managers" at their branch that getting a working capital loan should not be a problem.  After completing all the necessary forms and providing the required financial statements and projections they get turned down from an out of state "Manager".  This despite all the local announcements that they have plenty of money to lend. 

This is very frustrating and a big waste of time.  Especially in the economic environment we are in that does not allow for wasted time and effort. 

Based on my experience and what I am seeing and hearing, even with all the advertising print to the contrary, banks are not lending in certain locations of their local or regional markets.  If they are experiencing a higher than expected loan failures in certain markets they reduce their exposure in those markets by not lending in those markets.  Sometimes the bank regulators even require this of the banks. 

So if this is the case, why can't the banks just be quiet about their cash hoard and lending opportunities in the markets with "challenges"?  It is all about image.  If the banks even hinted that they were not lending in specific markets the reaction of the residents and businesses in those markets would be swift and negative.  Deposits would begin to shift to other banks and before you know it those non lending banks wouldn't have all those cash balances to lend any more.  So they continue to mislead those challenged markets in order to maintain cash balances to lend in other markets. 

Welcome to the world of banking!

Reg Baker, CPA
Reg Baker, CPA Website

Summertime Child Care

Summertime Child Care Expenses May Qualify for a Tax Credit

 

Did you know that your summer day care expenses may qualify for an income tax credit? Many parents who work or are looking for work must arrange for care of their children under 13 years of age during the school vacation. Those expenses may help you get a credit on next year’s tax return.

 

Here are five facts the IRS wants you to know about a tax credit available for child care expenses. The Child and Dependent Care Credit is available for expenses incurred during the lazy hazy days of summer and throughout the rest of the year.

1. The cost of day camp may count as an expense towards the child and dependent care credit.
2. Expenses for overnight camps do not qualify.
3. If your childcare provider is a sitter at your home or a daycare facility outside the home, you'll get some tax benefit if you qualify for the credit.
4. The actual credit can be up to 35 percent of your qualifying expenses, depending upon your income.
5. You may use up to $3,000 of the unreimbursed expenses paid in a year for one qualifying individual or $6,000 for two or more qualifying individuals to figure the credit.

For more information check out IRS Publication 503, Child and Dependent Care Expenses. This publication is available on the IRS Web site, IRS.gov or  Reg Baker CPA Internet Links (click on IRS Web Site)

 

Links:  

IRS Publication 503, Child and Dependent Care Expenses

http://www.regbaker.com/

 

Please contact me to discuss if you want a second opinion on any tax or personal financial planning topic.  I am always here to help!

Reg Baker CPA PFS

Reg Baker CPA Update

Hope everyone had a great 4th of July break!

For the next week or so I will be preparing to renew my securities licenses. Wish me luck!

Being securities licensed allows a higher level of service to clients that need this type of support.  Although many individuals already have an investment relationship there are times when a second opinion is needed or maybe even a change is necessary.  Please keep me in mind should either of these situations should present themselves.

Have a great week!

Reg Baker, CPA PFS

Investment Tax Rates Increasing

Tax Thunder Clouds Ahead!

Tax rate increases impacting investment activities will begin next year. Tax rate increases for income tax, dividends, capital gains all going up.

Consider taking capital gains now before increases take effect! Or take some capital losses now which will carry over to future years sheltering future investment capital gains.

With tax rates in the 40% range for some tax payers (and increasing) it is critical to always consider the tax impact on your investment returns.

Contact me if you need a second opinion!

Reg Baker, CPA PFS
http://www.regbaker.com/

Half Year Status

The year is half over. Are you on track with your family financial plan? Do you even have one? I can help!

Every family needs a Family Financial Plan. It acts as a road map to where you are headed. It incorporates all the significant events that may occur during your trip through life; from having children, buying a home, paying for college, taking care of parents and eventually retiring. Without planning for these events you may end up disappointed.

Whether you are just starting out or mid-career or contemplating retirement having a plan, setting goals and objectives and taking positive steps towards accomplishing your plan is essential. Will you achieve all your goals? Probably not, but by going through the planning process you and your family can get more realistic about the future and improve your chances of having a happy one.

Contact me to get the Family Financial Plan process started. Just one hour of you time that won't cost you anything can make a significant difference in your future!

Reg Baker, CPA PFS
http://www.regbaker.com/

Family Planning Question

Why do most families spend more time planning their vacations than their financial futures?

Incredible as this may seem, and I have heard this many times of the years, most families will put more time and effort into planning a vacation than they will their family's financial futures.

Is it because they are not comfortable with subject of family finance? Is it because they are afraid of the results (or lack of results) if they ever penciled out their financial futures?

Having a family financial plan (no matter how brief) is better than having no plan at all. No one ever started out having everything they needed or wanted. They needed to work towards their goals and objectives. Without a clear definition of what these goals and objectives are there is no target to aim for, nor direction or focus for your efforts.

A plan can be started very simply over a cup of coffee (or two) and a 60 minute discussion of options. Overtime, and a few more 60 minute meetings, a real family plan can take shape and develop into a very useful tool.

If you would like a free cup of coffee, with no pressure, to kick around some family planning ideas, let me know. I am always available for second opinions!

Reg Baker, CPA PFS

www.regbaker.com

Child Care Expenses - What's Deductible?

Child care expenses for work: summer camp to after-school programs to babysitting: what's deductible and what's not

With school out for the summer, working parents will not only need to arrange care for their children while at work, but how to do so in a cost effective way. For parents facing a summer season that requires juggling childcare and work (or finding work), the IRS provides a few tax breaks that can help make this balancing act a little less painful to the pocket. From the cost of day camp to summer school, how do you determine what kind of childcare is deductible and what is not? Let's take a look.

Child and dependent care credit:

The child and dependent care credit is a popular credit that, in part, enables you and your spouse (if married) to reduce your taxes by the cost of certain qualifying expenses you incur to have someone care for your child or children who are under age 13 so that you can work or look for work. While the credit applies to a wide range of childcare services, there are a variety of popular childcare services that do not qualify. Not only are there limits on the types of care and services that qualify, but the credit is also subject to income and percentage limitations as well.

Eligibility and amounts:

For 2009, you can claim up to $3,000 of expenses paid in the year for one qualifying individual, or $6,000 for two or more qualifying individuals, under the dependent and child care credit. However, as discussed below, the credit can only be taken for up to 35 percent of qualifying expenses. This means that you essentially will not be able to claim the full $3,000/$6,000 amount. Additionally, to be eligible for the credit, you and your spouse must meet certain conditions, including:

• You and your spouse (if married) must have earned income from wages, salaries, tips, other taxable compensation, or net earnings from self-employment for the year;

• The expenses must be made for children age 13 or younger;

• The expenses must have been incurred to enable you and your spouse to work or look for work (unless you or your spouse is a full-time student or incapacitated);

• The care payments must be made to someone you and your spouse cannot claim as a dependent; and:

• Your child must have lived with you for more than half of the year.

Percentage and more restrictions:

Another restriction limits the actual credit amount you can take to a percentage of your expenses. Depending on your income, the credit can reach up to 35 percent of your expenses. Thus, the potential maximum credit you can claim for 2009 is only $1,050 (35 percent of $3,000) for the care of one qualifying child, and $2,100 for the care of two children under the age of 13. The credit falls to 20 percent as your income level rises (at $43,000 adjusted gross income, the credit falls to 20 percent of expenses). Additionally, the child and dependent care credit is nonrefundable, meaning that any excess credit can not be carried over and used in later years to reduce your tax bill.

Comment. The $3,000 and $6,000 credit amounts must be further reduced by any child and dependent care benefits that your employer provides and that you exclude from your income.

Camp to day care, what expenses qualify?

To qualify for the credit, expenses must be incurred for the "care" of your child. With the dollar and percentage limitations, the child and dependent care credit will likely not pay for all of the expenses you incur to have someone care for your child (or children) when you're at work, or looking for work this summer. The IRS considers expenses are "for care" if their main purpose is the individual's well-being and protection.

Expenses that do not qualify for the child and dependent care credit:

• Kindergarten (the IRS considers both full-time and part-time kindergarten a non-qualifying educational expense);

• Overnight camp;

• Summer school;

• Tutoring programs; and

• Private school.

Expenses that qualify for the child and dependent care credit:

• Day camps or similar programs (even if the camp specializes in a particular activity, such as reading, writing, tennis, or computer skills);

• Nursery school, pre-school, or similar programs for children below the kindergarten level;

• Expenses for before- or after-school care of a child in kindergarten or higher may be expenses for care;

• Fees you paid to an agency to obtain services of a care provider; and

• Indirect expenses, such as application fees, agency or pre-school deposits, that you paid for purposes of obtaining child care.

Flexible Spending Accounts:

Instead of taking the child care credit, consider taking advantage of a flexible spending account that covers dependent care expenses. Employers who allow medical flexible spending accounts usually have one for dependent care as well. Contributions are pre-tax and, unlike the child and dependent care credit, they are not limited by adjusted gross income. If you take the credit, however, you can't double dip and pay for the expenses through a flexible spending account.

Some employers go one step better for their employees than sponsoring a dependent care flexible spending account: they provide on-the-premises day care facilities. If set up properly, it can be a win-win for employers and employees.

If you have questions on the type of child care that qualifies for the child and dependent care credit, a flexible spending account or other tax benefit, please contact me.

Reg Baker, CPA PFS
http://www.regbaker.com/

Samll Business Picking Up

Small Business Shows Sign of Life!

NFIB survey shows small-biz optimism highest since Sept 2008! Job openings 16 month high! Vegas left out; but it’s a start!

Vegas seems to always lead the nation in a slow down and lag the nation in a rebound. It's all discretionary spending; gets cut first and replaced last.

The NFIB survey shows that small businesses nationwide are feeling better about a recovery. Let's hope it sticks and spreads to every business in the country!!

A Quote to Remember!

Something we all must keep in mind as we move forward in life and business.

"Never confuse motion with action". --Benjamin Franklin

Cost of Children

COST OF CHILDREN IS HIGH

Parents – It costs over $200,000 to raise a child to the age of 18, not including college expenses! Are you ready?


Google or Bing “Cost of Children” and get more information than you will ever need.

Contact me if you want to start doing some planning.  It is never too early or too late!

Reg Baker, CPA PFS
http://www.regbaker.com/

Tanning Cost Increase Coming!

IRS Issues Regulations on 10-Percent Tax on Tanning Services Effective July 1

WASHINGTON — The Internal Revenue Service today issued regulations outlining the administration of a 10-percent excise tax on indoor tanning services that goes into effect on July 1.

The regulations were published today (June 11, 2010) in the Federal Register.

In general, providers of indoor tanning services will collect the tax at the time the purchaser pays for the tanning services. The provider then pays over these amounts to the government, quarterly, along with IRS Form 720, Quarterly Federal Excise Tax Return.

The tax does not apply to phototherapy services performed by a licensed medical professional on his or her premises. The regulations also provide an exception for certain physical fitness facilities that offer tanning as an incidental service to members without a separately identifiable fee.

Contact me with any questions!

Rge Baker, CPA

IRS Audits

Hi Gang!

I am getting reports from clients that the IRS is poking around looking for tax dollars. If you receive an IRS audit letter contact me ASAP!

As we all know, the Fed's are under some very heavy pressure to figure a way to reduce the deficit. Of course cutting programs and related expenditures is not an option for the the current administration so the only other option is to collect more taxes. This has been building for some time and the IRS letters are apparnetly going out to anyone that might be willing to just pay up.

Most of these IRS letters are mass mailings triggered by a computer program with preset conditions. For example, a few years back tax payers were receiving automated IRS letters if they received a form 1099. The letter stated that the IRS could not agree the form 1099 to their tax return. Well for taxpayers that receive multiple form 1099's the IRS will never be able to tie the individual 1099 amounts to the tax return. But this rattled many tax payer cages and many just paid up the requested extra tax payment without pushing back. That is expensive for the taxpayer and a good revenue source for the IRS.

If you receive an audit type letter from the IRS, please get it to me ASAP. We'll discuss the options and decide what the best course of action is. I can get involved and handle this situation for you and hopefully reduce or eliminate any additional tax, penalties and interest.

Reg Baker, CPA PFS
http://www.regbaker.com/

Powerful & Moving!

This is powerful. Especially for a Vietnam Veteran like me who saw way too much at a very young age......

http://www.nragive.com/ringoffreedom/index.html

Please pass this on for all those that are still in harms way.

Reg Baker, CPA

New State President for CPA's

I am officially the State President of the Nevada Society of CPA's. I am looking forward to a very interesting and productive year.

Please contact me with any thoughts or ideas on how to improve the Nevada Society of CPA's and increase value to its members.

Reg Baker, CPA PFS
(702) 283-0784
http://www.regbaker.com/

IRS Open House!

Open House Saturday June 5 to Help Taxpayers Solve Problems and Respond to Notices

WASHINGTON — The Internal Revenue Service will once again host a special nationwide open house on Saturday, June 5 to help taxpayers solve tax problems and respond to notices from the IRS.

Approximately 200 IRS offices, at least one in every state, will be open June 5 from 9 a.m. to 2 p.m. local time. IRS staff will be available on site or by telephone to help taxpayers work through their problems –– especially recently received tax notices –– and walk out with solutions.

“We’ve helped thousands of taxpayers resolve their problems the same day at these open houses,” IRS Commissioner Doug Shulman said. “If you have a question regarding a notice, a problem with your taxes or difficulty resolving a tough tax issue, we encourage you to come in and work with us.”

IRS locations will be equipped to handle issues involving notices and payments, return preparation, audits and a variety of other issues. At a previous IRS open house on May 15, close to 7,000 taxpayers sought and received assistance. About 97 percent of the taxpayers who came in for help had their issues resolved the same day.

At the June 5 open house, someone who has received a notice seeking additional information can speak with an IRS employee to get a clear explanation of what is necessary to satisfy the request. A taxpayer who cannot pay a tax balance due can discuss with an IRS professional whether an installment agreement is appropriate and, if so, fill out the paperwork then and there. Assistance with offers-in-compromise — an agreement between a taxpayer and the IRS that settles the taxpayer’s debt for less than the full amount owed — will also be available. Likewise, a taxpayer struggling to complete a certain IRS form or schedule can work directly with IRS staff to get the job done.

The open house on June 5 is the second of three events scheduled after tax season this year. The first was held on May 15. The next event, previously scheduled for Saturday June 26, will be held later this fall. Details regarding that event will be available later.

IRS Open House Locations are:

Las Vegas: 110 City Parkway
Las Vegas, NV 89106

Reno: 200 S. Virginia St.
Reno, NV 89501

Honolulu: 300 Ala Moana Blvd.
Honolulu, HI 96850

For more locations follow this link:
http://www.irs.gov/localcontacts/article/0,,id=220631,00.html
 
Please contact me if I can help!

Guest Blogger - Even Now Are You Leading Inspired?

Mercedes Warrick is a good friend of mine and a master of maximizing internal energy. Mercedes is my Guest Blogger today and offers a very insightful blog. Enjoy!

Even Now Are You Leading Inspired?

In one of the most deeply impacted economic regions in the country, Las Vegas professionals are taking emotional hits amplified by feeling the painful impact of a severe financial realignment.

CPAs, CFOs, attorneys, and human resources executives are the lead professionals when deciding who stays and who goes. Loss of employees often also means deciding which essential service stays and which get cuts. These hard decisions are not only affecting the people losing their jobs. These hard choices affect the professionals making the decisions as well.

Recently I had lunch with two of my executive friends, both having had a crucial year of layoffs and heart break. Making choices that were critical to their companies’ imminent survival, they have had to make the tough people decisions that have influenced families and lives. As their stories unfolded I watched these compassion filled men agonize. It is not a view that many see and it was humbling that they let me in a little.

Watching as their body language gave way to their inner feelings; the tough exterior only a façade both are saying that, “life is too short.” One is changing directions totally, seeking to build up people while leading a profession towards recovery. The other, a recognized expert and leader, is in for the “long haul.” He is seeking to build up his work family, re-fortifying trust in an industry and company that is going through a huge identity crisis. Each asks me, “So what are you doing now?”

After spending many years in executive level marketing and corporate communications ~ which I loved ~ and now 3 or so years basically basking in Zen; I quietly say, “I am empowering leaders to lead at the speed of ZEN.”

“What does that mean?” each asked.

It means that even as you are going through this tough time you take an internal inventory and take care of what you need. Simply, are you asking?

What am I learning?

How am I growing? Becoming more compassionate? Standing in my courage?

Am I being true to my values and beliefs?

What inspires me? Soothes me? Comforts me? Even now…

How am I making sure that “this action, idea or belief” is showing up in my life now?

Abraham Maslow simply stated that we have a hierarchy that moves us through a continuum of satisfaction, safety, love, esteem, self actualization, a vision of the personal self and free will. Maslow stated that we must satisfy the lower levels before we can move to a personal utopia.

We are dynamic and the Zen, the place where our soul resides within us, allows for inner reflection. New seeds of desire, wants and inspirations are planted during these hard environments. And, whether we decide to stand our ground or bring new metamorphosis and change, when we lead from a dynamic sense of Self it inspires the people around us to move through their change gracefully, be courageous and transform too. So even as they are losing a job or maybe doing two or three times more work ~ often in fear ~ of what has happened to a family member or friend, your leadership is being noted. Your compassion and your stance present an energy that is dynamic and influential.

So where are you and how are you taking are of Self? Are you emerging? Changing direction? Standing your ground? Leading at the speed of Zen means having a communion with your inner Self knowing that within every time of recycling, room is made for planting. Are you…?

Educating Your Self!

Living Seeking Information and Knowledge

Growing Your Self!

Living with Awareness, Seeking Know- How

Motivating Your Self!

Living Seeking Action, Consistency & Living Inspired. Leading Inspired!

Live Every Moment, Every Day

***

This article may be reprinted with the following credit listed.

Mercedes Warrick is The Intuitive CEO™ at The Achievement Sanctuary®. After a life changing event she decided that life is too precious and now energizes leaders, emerging entrepreneurs and professionals to live inspired, lead inspired…. Leading at the speed of ZEN! Contact Mercedes at: mercedes@TheAchievementSanctuary.com or visit www.TheAchievementSanctuary.com

Mercedes Warrick
Intuitive CEO™
@ The Achievement Sanctuary™

I am Dedicated to Energizing Your Success!

For speaking engagements, 9 Breaths for Conscious Living

1-hour mini seminars, private consultations....

(702) 348-8800

www.TheAchievementSanctuary.com

Join me on Linked In: http://www.linkedin.com/in/mercedeswarrick

Easy Money

Need Some Easy Money?

If you could just save $30 a week for 3 years at 3% you could have about $5,000!!

What would you do with an extra $5,000?  You could pay off your credit cards, save for college or maybe make a down payment on a condo.

Can you find $30 a week or just $4 a day?  Is that one Starbux run, an afternoon snack or maybe a desert?

Visit my web site at http://www.regbaker.com/, go to the Financial Tools section and use the Savings Calculator to play with different variables.  You would be amazed at how easy it is to save and how quickly it adds up!

Happy savings!

Reg Baker, CPA Installed as State President of Nevada Society of CPA’s

On June 4th, I will be installed as State President for the Nevada Society of CPA’s. This will be the second time that I have served as a State President or Chairman for a state society of CPA’s. I served as a two term Chairman for the Hawaii Society of CPA’s and now the State President (similar to Chairman) for the Nevada Society of CPA’s. Very few CPA’s have had the privilege of serving as the elected leader of two state Society’s of CPA’s.

My focus during the next year as State President is to promote Financial Literacy and generate interest with our members in industry. Occasionally we tend to forget that there are many CPA members that do not practice public accounting, We, as a society, need to increase visibility and service to these non-public accounting CPA’s.

Financial Literacy is an essential element of education that must be incorporated into our schools and colleges. Many of the social problems we are experiencing today could have been mitigated if we only provided some basic financial skills or awareness to our younger members of society. Warning our children and young adults of the danger of excessive debt, teaching them how to save and plan for the future and providing them knowledge to avoid being victims of a scam is a moral obligation we must take seriously.

Please let me know if you would be interested in assisting the NSCPA’s in either of the above objectives.

Little Known Real Estate Tax Credits

I just attended some well received commercial real estate tax credit meetings with Engineered Tax Services (ETS). Lots of interest in these little known tax credits!  Some of these tax credits are expiring soon due to carry back limitations.  IRS claims that less than 2% of credits available are being claimed.  Working with local CPA's, ETS processes over $25 million a month of these credits for Property Owners, Architects and Engineers. 

Call me if interested in more information.

Interesting Observation & Ladies Attire

For all the ladies out there and for interested men:

Dress shabbily, they notice the dress. Dress impeccably, they notice the woman."

--Gabrielle "Coco" Chanel,French fashion designer

This is probably true for both sexes, although I am not sure how many men would actually wear a shabby dress...........

AICPA Council Meeting

Heading to the American Institute of CPA’s Council meeting in San Diego! Lots of important issues to discuss and address! 

I will be making good contacts throughout the country which could be very valuable. It is always fascinating to hear about the various challenges being faced by not only fellow CPA’s from different parts of the nation but also their clients. There is a never ending list of new problems and solutions. The experience is eye opening and very valuable.

Rotary Presentation

Had a great time presenting to the Centennial Hills Rotary Club on "Why Bankers and CPA's have a Stressed Relationship".

Essentially it has to do with the transformation of the Banker, Borrower and CPA team to a “cover your ass” litigation focused process. Banking is not what it used to be and neither is practicing as a CPA. Both industries have changed for a number of reasons but it has a lot to do with the litigious environment we now operate in.

I have a list of topics I can speak on.  Call me if you need a speaker!

ROTH Conversions - BEWARE

Beware of ROTH Conversions!

If you are getting pressured to covert your IRA to a ROTH; be careful.  Do the math and ensure it makes sense for you.  This conversion opportunity is not for everyone.  The taxes that will be due, even if spread out over two years, may not fit into your overall financial plan.

Please get a second opinion from your CPA or another financial advisor.  Or call me and we can kick the idea around and see if it makes sense for you.


Reg Baker, CPA PFS
Ph: (702) 360-2823
Cell: (702) 283-0784
Email: Reg@regbaker.com
http://www.regbaker.com/
www.linkedin.com/in/regbaker

Older Siblings Less Risky!

The order of your birth affects the amount of risk you take?

Research shows that younger siblings act riskier sooner than older siblings!

Apparently it has to do with older siblings having greater responsibility sooner than younger siblings.  Being the first born I can attest to that!! 

What do you think?

Reg Baker, CPA PFS
"First Born Son and Sometime Risk Taker"

How Does a CFO Work with Other Managers?

A CFO Perspective

The challenge of writing a Blog like this is the diverse experience and backgrounds of the readers. Some readers could be high level executives with many areas of responsibility while others may be in smaller companies with limited staff and more narrow responsibilities, and yet still other readers could be in public accounting and are passing the article to younger staff and/or clients. Other readers may not even be involved as a manager with an entity.  Needless to say, writing relevant posts of interest to all these readers is difficult. Especially when postings length is limited to only some many words…….


This post will be addressing how the Chief Financial Officer (CFO) interfaces with the “C” suite and other managers of their entity. Depending on the size of the entity this CFO interface could be extensive or be limited to just one or two individuals.

Regardless of size considerations, the CFO interface is essentially an education, coordination and monitoring function.

Education: The CFO needs to educate and create an awareness of the many areas, functions and transactions that impact the financial affairs of an entity. Not to overstate the importance of the CFO’s role, but there is very little that happens within an entity that does not impact the entities finances in one way or another. The more the managers and leadership of an entity understand, support and appreciate this fact, the greater the probability is that the entity is being well managed.

Coordination: Once the leadership and managers of the entity appreciate and support the role of the CFO, then the work of coordination begins. Frequent contact with all aspects of a company is essential for a CFO to effectively execute their role. For example, it is only by understanding how sales transactions are received, processed, approved, recorded, reconciled, collected, monitored, managed and exceptions are handled can a CFO (or their staff) effectively advise the other managers and create a useful support system for the entity. To be effective, a CFO and the entity’s leadership both need to extrapolate this concept throughout the entire entity.

Monitoring: It is only by monitoring (which by my definition includes reporting) all the various activities of an entity can the CFO and the entity’s leadership effectively manage, direct and control the entity. As the old saying goes, “if you can’t quantify it, you can’t manage it”. Providing and reacting to daily, weekly and monthly reports with trend analysis and important observations are critical to an entities success. Again, the more this is appreciated and supported by the entity the more likely the entity will be successful. We’ll be talking about dashboards in a later column.

You might have noticed that I have used the term “entity” throughout this article. The reason is that much, if not all, of what I am writing about is true for companies for profit as well as for non-profit entities. Entity is being used to refer to both profit and not-for-profit entities.

Please contact me with your feedback at reg@regbaker.com.

I am looking forward to hearing from you with suggestions for future posts.

Reg Baker, CPS PFS
http://www.regbaker.com/

Nevada Business Magazine Interview

Just had a great interview with Nevada Business Magazine! We discussed many challenges facing the CPA industry in Nevada. Look for me in the July issue!


Topics discussed were how the economy in Nevada was impacting CPA firms in the state, client retention issues, the IRS Tax Preparer Registration Program, regulatory issues like Big GAAP/Little GAAP, Big SOX/Little SOX and IFRS. Great dialog, great people and great reading!

Pick up the July issue of Nevada Business Magazine and let me know what you think!

Reg Baker, CPA PFS
Ph: (702) 360-2823
Cell: (702) 283-0784
Email: Reg@regbaker.com
http://www.regbaker.com/
www.linkedin.com/in/regbaker

IRS Reports Wide Spread IRA Abuse

IRS Reports Wide Spread Abuse of IRA Contributions & Distributions.

Problems are related to inappropriate contributions and not taking required minimum distributions.  IRS will be taking measures to clean this abuse up.

This could be the next big issue for many taxpayers.

Contact me before the IRS contacts you!

Reg Baker, CPA PFS
Ph: (702) 360-2823
Cell: (702) 283-0784
Email: Reg@regbaker.com
http://www.regbaker.com/
www.linkedin.com/in/regbaker

IRS Open House for Small Businesses & Individuals

Issue Number: IR-2010-055
Inside This Issue
_____________________________________________________________________________

Open House on Saturday May 15 to Help Small Businesses, Individuals Solve Tax Problems

WASHINGTON — The Internal Revenue Service will host a special nationwide Open House on Saturday May 15 to help small businesses and individuals solve tax problems.

Approximately 200 IRS offices, at least one in every state, will be open May 15 from 9 a.m. to 2 p.m. local time. IRS staff will be available on site or by telephone to help taxpayers work through their problems and walk out with solutions.

“Our goal is to resolve issues on the spot so small businesses and individuals can put any issues they have with the IRS behind them,” IRS Commissioner Doug Shulman said. “If you have a problem filing or paying your taxes or resolving a tough tax issue, we encourage you to come in and work with us.”

IRS locations will be equipped to handle issues involving notices and payments, return preparation, audits and a variety of other issues. At a previous IRS Open House on March 27, approximately two-thirds of taxpayers requested and received assistance with payments and notices.

So, for example, a taxpayer who cannot pay a tax balance due can discuss with an IRS professional whether an installment agreement is appropriate and, if so, fill out the paperwork then and there. Assistance with offers-in-compromise will also be available. Likewise, a taxpayer struggling to complete a certain IRS form or schedule can work directly with IRS staff to get the job done.

At the March 27 Open House, 88 percent of the taxpayers who came in for help had their issues resolved the same day.

Locations for the May 15 Open House are listed here: www.irs.gov/localcontacts/article/0,,id=220631,00.html.

The Open House on May 15 is the first of three events scheduled through the end of June. The next two are planned for Saturday June 5 and Saturday June 26. Details regarding those events will be available soon.

Contact me with any questions:

Reg Baker, CPA PFS
Ph: (702) 360-2823
Email: Reg@regbaker.com
http://www.regbaker.com/
www.linkedin.com/in/regbaker

Get Your 2011 Tax Refund Early!

Want Your 2011 Tax Refund Early? It’s Easy & Legal!
 Receiving a big tax refund check is a wonderful thing! Writing a check to the IRS is never fun. However, believe it or not, you may be better off paying the IRS a small amount on April 15 rather than receiving a receiving a refund check. Why? Because even though you feel like you pay your income taxes when you prepare your tax return, you actually pay incomes taxes all year long! These taxes are paid as your employer withholds taxes from your paycheck and forwards those taxes to the IRS on your behalf. When you file your tax return, you are refunded the difference between the tax you owe and the taxes your employer withheld and already paid for you.

Most tax payers allow their employers to withhold too much income tax each paycheck. As a result income tax refunds averaged over $2,000 in 2008 and is expected to be higher in 2009. As taxpayers we are actually giving the IRS (our government) an interest-free loan. We would be better off saving these withheld taxes and putting them in an interest-bearing bank account and writing a check to the IRS on April 15 when we complete our tax return.

It's not hard to reduce the amount withheld from your paycheck. Just give your employer a revised W-4 form instructing them to withhold less each payday. Your employer’s human resources department should have the form, and it's easy to fill out. If your employer does not have one or won’t give you one, let me know and I will get you one or go to www.IRS.gov and download one.

When changing you W-4, be careful. If you owe too much tax at tax time the IRS may charge you a penalty and interest for the underpayment. It is better to change the W-4 slowly each year until your tax refund is reduced to almost zero but your paycheck increases so you get your money earlier.

Please call me if you want to discuss this further and see how to get more money now than later.

Reg Baker, CPA PFS
Ph: (702) 360-2823
Cell: (702) 283-0784
Email: Reg@regbaker.com
http://www.regbaker.com/

New Financial Literacy Links

Hello Everyone!

Wanted to let everyone know that I just added two more internet links for financial literacy on my website at http://www.regbaker.com/.  

Ths is really good information for all ages including teens and tweens.  It is never too early to start teaching the younger ones about how to handle money and plan for the future.

Please take a look.  I think you will be pleasantly surprised at what you find!

Warmest regards,

Reg Baker, CPA PFS
Ph: (702) 360-2823
Cell: (702) 283-0784
Email: Reg@regbaker.com
http://www.regbaker.com/
www.linkedin.com/in/regbaker

Reg Baker, CPA Named to AICPA PFS Task Force

I just wanted to share some great news!

I’ve just been named to a 13 member national task force to write the Personal Financial Specialist (PFS) Exam for the American Institute of CPA’s!

This will allow me to be actively involved in the PFS Exam process and work with other CPA PFS professionals on a nationwide basis. Very exciting stuff!!

The PFS credential is one of only a few specialties that a CPA can hold. A CPA PFS specializes in providing a variety of personal financial services to clients including estate planning, retirement planning, investment monitoring, tax advice and insurance analysis to name a few.

If you have any questions related to the PFS credential or the services they provide please contact me at:

Reg Baker, CPA PFS
Ph: (702) 360-2823
Web: http://www.regbaker.com/
Email: reg@regbaker.com

IRS to Increase Audits of Self-Employed's

If you are self-employed; beware!

The Internal Revenue Service plans to increase audits of the self-employed by checking for unreported or understated income during correspondence audits.

Estimates by the IRS show that at least $68 billion of the tax gap (tax gap is defined as the difference between what the IRS estimates should have been collected in taxes and what was actually received; the gap was estimated at $345 billion in 2001) was due to self-employeds not filing or not accurately reporting revenues and expenses. The IRS conducted over 5 million correspondence examinations during the past 5 years that resulted in about $35 billion in additional taxes. For each self-employed tax return examined about $6,800 in additional taxes resulted. With the federal deficit increasing at rates never seen before, the collection of these taxes on unreported income and/or overstated expenses has become critical.

Current IRS procedures for correspondence audits of self-employeds do not require IRS examiners to complete minimum checks unreported income. It has been recommended that the IRS require correspondence examiners to check for unfiled returns and to probe for unreported income. These checks are required of IRS examiners who conduct in-person and office visit audits, but not of correspondence audits.

"Sole proprietors who underreport their income can create an unfair burden on honest taxpayers and diminish the public's respect for the tax system," said Treasury Inspector General J. Russell George in a statement. "It is imperative that the IRS institutes policies to address this problem."

In response, the IRS agreed to develop “selection filters” to identity and refer to IRS examiners those self-employeds who did not file required returns or have indicators of unreported income or overstated expenses.

Should you have any questions or concerns, or wish to file an amended tax return, please contact me.

Reg Baker, CPA PFS has over 20 years experience and can be contacted via email at reg@regbaker.com or through his Website at http://www.regbaker.com/.