Mary Kay Cosmetics provides extensive training for consultants in many areas that help them to work with integrity and professionalism.

I’ve referred to myself at times as a serial entrepreneur.  Since becoming self-employed I have tried my and at a few things.  Some have been successful; some not so much.  One business that I have really enjoyed besides Storehouse is Mary Kay.  Yes, I did say Mary Kay.  “How in the world do you reconcile that?”  I’ve had to answer that question more times than you know.  It used to bother me to explain why I became an Independent Beauty Consultant for Mary Kay.  People just didn’t get it.  The truth is that Mary Kay appeals to other sides of my personality that accounting just doesn’t reach.  What I’ve found over the years however, is that they are not as foreign to one another as you might think.  Many of the values I have learned from one business readily transfer to the other.  One of those values is the habit of consistency.

In a recent Mary Kay success meeting, the unit director was explaining to the consultants in the group how little things done consistently could help them reach a big goal.  The lesson was regarding sales and production.  What she was teaching them is how placing a minimum order of a certain amount each week can easily get them to a certain goal by the end of the fiscal quarter.  Some of the consultants bucked at the idea because making a minimum order every week will increase shipping cost over the long run.  The point that they were missing is that placing a minimum order each week establishes a habit of consistency.  Having a goal to place an order each week means you need to have minimum sales each week.  Having a sales minimum each week means you need to contact or acquire a certain number of customers each week to meet that goal.  Being intentional about and consistent with the sales process will get you where you want to be.  Every week you have a win.  Every week you have accomplished a goal making the entire sales process a lot easier and a lot less intimidating.  Just a little effort can go a long way.

Success comes, not by knowing, but by doing what needs to be done.

This is the same process we use when helping families and businesses reach their financial goals.  Whether establishing an emergency fund, saving for retirement, or getting out of debt, the process is the same.  Somewhere in time we lost the value of consistent effort.  We have become accustomed to instant gratification, and therefore we look for instant results in everything we do.  This leads to frustration and a feeling of failure when things don’t work out as we expected, when we expected.  Some of our financial goals are so big that it seems we’ll never reach them.  I’ve heard it said, however that the only way to eat an elephant is one bite at a time.  Consistently putting money away in a saving account will increase the chance that you’ll actually have money in that account when you need it.  Consistently making additional payments on that debt will guarantee that it will get paid off.  Consistently sending money to your financial adviser will guarantee that one day you will be able to retire.  How much money you’ll have in savings, or retirement or how quickly that debt will be paid will depend on how much you contribute to those causes.  The truth is, however, that whatever your effort is, it will pay off if you’re consistent.

We tend to look at finance and money matters as though it’s a simple math equation.  Obviously if you add money to an account, you’ll have more of it.  That’s only partially true.  The problem is that the solution is not in knowing what to do.  The solution is in doing what needs to be done and that’s where most people fail.  They know what to do, but they fail to do it.  The thought process is often that because they do not have a significant amount of money to contribute toward debt payment or savings, they don’t do anything.  Sometime later they find that they are no closer to reaching to their goal and frustration sets in.  Success is found in the day-to-day activity of doing little things along the way.

Crossing the finish line one step at a time.

If you’re finding that you have goals you’re not reaching, start developing the habit of consistency.  No matter what happens make at least the minimum effort required to get you where you want to be on a consistent basis.  Once you start seeing those small wins, you’ll find ways to achieve bigger ones.

  The Secret Revealed

I have a secret that I’m about to reveal that may shock and disturb you.  It’s a little known fact, but it is very true.  This secret is so serious that is costs untold millions of dollars in lost revenue every year; possibly even billions.  Few speak of it and even fewer know about it.  Did you know that the IRS does not have the authority to regulate tax preparers?  Shocking isn’t it?  What’s more shocking to me is that their attempt to regulate tax preparers has been overturned in a Supreme Court ruling.  What that means to you as a tax payer is that in many states without regulations regarding this industry, there is no consumer protection against unqualified tax preparers.

A Little History

When I decided to open Storehouse Financial Management Services, LLC, I was surprised at how easy it was to do.  My plan was to take my accounting degree and put it to use to help support my family outside of the traditional work model.  My plan was to provide bookkeeping and tax services to small businesses and some financial coaching to individuals needing help with the family budget.  I had been doing these same things for years for my employer and friends so I had the experience.  What I didn’t have was a license to do it on my own.  I researched the web for information on what licenses were needed and actually found very little.  So little, in fact, that I actually called the state and institutions who I determined should be responsible for such licensing.  I wanted to be sure I was not missing anything and they assured me that I was not.  With that information I obtained the licenses that were required and went to work.

The End of the Beginning

A few years later I started receiving information from the IRS that there would be a continuing education requirement and that a test of basic skills would have to be passed for everyone preparing form 1040 for the general public who was not a CPA or an EA.  I thought to myself, this is great!  We finally have something to bring credibility to the industry at large.  Something that would let tax payers know that the tax preparers they are using who are not CPA’s and EA’s are qualified to prepare their returns.  It’s the RTRP designation!  I’m going to be a Registered Tax Return Preparer.  That’s a good thing, right?

Well apparently not to some tax preparers.  Not long after I paid for, took and passed the RTRP exam,
received and framed my certificate, the IRS was sued and told that they did not have the authority to regulate tax return preparers.  Persons who had paid for, but had not taken the test were issued refunds for the testing fees and many of us were left shocked and amazed.  Yes, the IRS was sued by tax return preparers in Loving vs. IRS and lost.  Wow!

The problem was that Congress never gave the IRS authority to regulate tax preparers and by making the attempt to require a license of sorts, the IRS over stepped its authority.  OK, that’s fair.  We should all play by the rules, the IRS included.  So what now?

Returns of the Wild, Wild West

Back to square one.  There are no federal regulations for tax preparers and the same is true in many states.  So at any given time, any given person, for any given reason can begin preparing tax returns regardless of their ability, experience, knowledge or education.  There’s almost no way to know who you’re dealing with.

The problem with this is the tax payer, many of whom do not know or understand what is on the return, is responsible for whatever the return contains once they sign and authorize it to be submitted to the IRS.  Since many tax payers are looking for a refund, some tax preparers will enter fraudulent information in a return to create or enlarge the refund amount which makes the tax payer very happy.  They come back year after year because they’ve received such “great” service.  Years later, they receive a letter from the IRS regarding the inconsistencies that were found in the tax returns along with an adjustment to tax due.  On average these letters are received two to three years after the return is filed so the tax payer now has interest and penalties due on the amounts owed from the time the return was filed until the time the last cent is paid.  Many of them don’t understand why.  Many of the preparers responsible are not available to help sort out the mess.

My personal opinion is that it’s unfortunate and a disservice to the general public to have an industry this large and important to go unregulated.  There is so much at stake for the tax payers personally.  Fines, penalties, possible jail time, and the sheer aggravation experienced once the fraud is discovered could be mostly avoided.  Then there are the claims of a whole new industry promising a quick and easy fix to the IRS problem that preys on unsuspecting tax payers and often leaves them worse off than they were before.   The situation for the federal and local governments in terms of losses in income and the services dependent on that income isn’t much better.  Government spokespersons are often speaking of budget shortfalls.  Ever wonder how much of that money is lost due to taxpayer (preparer) fraud?

Don’t get me wrong, there are many very honest and credible tax preparers in the industry.  They’re the ones who aim to prepare a correct tax return with the information they have regardless of whether a refund is due or how much it is.  They’re the ones I see at the continuing education courses every year, even though they are not required to be there.  They are the one’s supporting the idea of regulating the industry for the protection of their livelihood and the people they serve.  They’re the ones who need you to let Congress know that mandatory regulation of the tax preparation industry is long overdue.

Want to know more?  Check out these resources.

The Ruling

United States Court of Appeals – District of Columbia Circuit

Pro

 Forbes.com

Appellate Court Delivers Blow to IRS and Taxpayers Nixing Tax Return Preparer Regs

Con

Institute for Justice – Loveing vs. IRS

Challenging the IRS’s Authority to License Tax Return Preparers

I usually find that tax filers who have had a change in dependents, who are newly married or divorced, those who have had significant changes in income during the tax year and the self employed are most often the ones who run into this issue.

Fortunately there are some simple things you can do now to help lower or eliminate your tax bill.

1.  Keep the information on your W-4 current.  If you have a child graduate from college, move out of the house, or if you have another person was your dependent who dies or has a change in their dependency status, you need to make changes to your W-4 to reflect the differences.  It’s not something most people think about, but it does make a difference.  The withholding amounts on your paycheck need to accurately reflect your life.  If you take more exemptions on your W-4 than you can claim on your 1040, you will most likely have a tax bill.

2.  Self employed persons should keep track their net income through out the year.  If you see you are making a profit (which is why you’re in business), start making tax deposit through out the year.  This is most easily done through EFTPS.gov.  On average you should deposit 10-25% of your net profit to avoid a large tax bill and underpayment penalties at the end of the year.

3.  If you are self-employed you need to keep a written record of all of your business expenses.  This should include some kind of ledger, receipts, bank statements and any other source documents that will verify your income and expenses.  Don’t leave money on the table because of sloppy or non-existent financial records in your business.  Mileage is one of the most common deductions I see business owners miss out on.  You must keep written records of your business mileage and vehicle expense.  No records = no deduction.

4.  The same advice goes for employees who have unreimbursed job expenses including mileage.  Keep your records.  If your employer has a program that reimburses you for job related expenses, use that.  If they do not, keep records and deduct these on your tax return.

5.  Help yourself by helping someone else.  Charitable contributions to churches and other qualified non-profit organizations are also tax deductible.  Again, you generally must have written records of your donation in the form of a receipt from that organization.  Be aware that donations to non-qualified organizations and individuals are non-tax deductible gifts.

6.  Pay yourself.  There are deductions and credits available for saving for the future.  The future may include college or retirement.  Either way, savers are rewarded for their efforts, provided they use the right instruments.

These are some of the most commonly missed opportunities I see that can reduce or eliminate that dreaded end of the year tax bill.  It just takes some awareness and a little effort to make it happen.

Call me for help implementing a plan for this year.

See www.usps.com for shipping information.

Did you know that correspondences, returns, payments and other time sensitive mailings sent to the IRS can be considered as timely filed as of the date mailed even if the IRS will not receive them until a few days after the expiration of the filing period?  The IRS considers an item as being receive timely if the date of the US postmark stamped on the envelope is within the filing period.

However, be careful to use the United States Postal Service or another private delivery service specifically designated by the IRS, otherwise it could cost you.

The following is a list of private delivery services (PDS) specifically designated under Notice 2004-83.  This list can be found on the IRS website at www.irs.gov.

Effective January 1, 2005, the list of designated PDSs is as follows:

1. DHL Express (DHL): DHL Same Day Service; DHL Next Day 10:30 am; DHL Next Day 12:00 pm; DHL Next Day 3:00 pm; and DHL 2nd Day Service;

See www.fedex.com for shipping information

2. Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2 Day, FedEx International Priority, and FedEx International First; and

3. United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A.M., UPS Worldwide Express Plus, and UPS Worldwide Express.

See www.ups.com for shipping information

Be sure to use only the services listed in Notice 2004-83.  For example, because UPS ground is not specifically mentioned in this list, your mailing will not be considered as timely filed unless the IRS actually receives it before the deadline.  Of course it’s always better to respond to notices from the IRS or complete time sensitive documents  as soon as possible so that you have enough time to deliver the items prior to the expiration of the filing period.  It’s also a good idea to send items using a traceable service such as certified mail or deliver confirmation.  It’s also usually less expensive.  We all know that life happens and sometimes we need a little extra time.  It’s good to know these services are available when we need them.

Storehouse Financial Management Services, LLCJanuary 2013

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

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

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

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

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

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

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

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

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

Happy New Year!

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

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

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

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

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

LaTonia Powers for

Storehouse Financial Management Services, LLC

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

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

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

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

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

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

LaTonia Powers for

Storehouse Financial Management Services, LLC

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

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

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

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

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