2011 Coming to a Close

As we wrap up 2011 it is time to start organizing for tax filings. Contact our office right away if you are considering any last minute purchases or sales to get information on the possible tax benefits or costs associated with the timing. It is always heart breaking to learn of a transaction that was conducted after the fact when we could have made minor suggestions to save hundreds or thousands of dollars!

For all of the UM Alumni out there, just had to share the info on the Sugar Bowl.

Click the image below to visit the Alumni site to “read all about it!”

Proud to be a Dave Ramsey endorsed Ann Arbor CPA. When looking for a recommended accountant in Michigan it makes sense to consider a Dave Ramsey endorsed CPA who focuses on your long term and short term goals with accurate, honest advice.

We liked this article in Dave’s recent newsletter, you can read it hear of visit his full newsletter by clicking here.

Four Ways to Help You Reach Your Goals

People make a common mistake when they are setting goals for the New Year.

They pledge to do something and then subconsciously think they have to tackle the next 12 months right now. If the goal is to read 10 books, many people focus on just “10 books.” They don’t hear “this year.” They’ll get too overwhelmed and quit.

It may seem a little early to bring this up since the start of the New Year is three months away. But just like pro football teams gear up for the regular season with preseason games, we have to get ready for 2012 goal-setting with some advance planning. Now is the time to

Now is the time to not only finish what you started in 2011, but also get ready for new and better things next year.

If you apply these quick tips when setting a goal for yourself, you’ll find progress—and success—will start finding its way to you.

Do Little Before Big

When going after something, start small. If it’s Sunday, set yourself a minor goal to accomplish by Saturday. Make it something that you have to work on every day of that week. Teach yourself about sustained effort and how to make steady progress. Then expand from there.

Change Your Thinking

You’ve heard this one before, and it may sound cliché. But if you stop and think about it, this behavior can really be the key to achieving big stuff.

When it comes to accomplishing an objective, you want to learn how to be in it for the long haul. Today, most of us want immediate results. Heck, if the internet connection is slow, we’re about ready to pull our hair out! We need to learn to go into a task with the frame of mind that it will be an experience, not just something to get through.

Enjoy the process. Have a marathon mentality, not a sprinter one. Doing so will keep you patient and more likely to stick to the task at hand.

Have an Accountability Partner

With married couples, it’s your spouse. With singles, it’s someone you trust who will hold you accountable for your actions. You don’t want a person who is a wimp and will agree with everything you do. The ideal partner will get in your face to stop a behavior if they see you slacking off on your goal. And if you are smart, you’ll listen. Read more.

Make Productive Habits Routine

Picture putting on your seat belt when you get in the car. If you become accustomed to wearing a seat belt, when you drive without it, you feel awkward—almost naked. Only after you buckle up do you feel like you’ve taken the proper steps to prepare yourself. That’s the feeling you want from the habits you form to reach your goals.

You want a behavior to be so ingrained in your psyche that not doing it makes you feel like something’s missing. When starting a new goal, wrap your mind around what it will take to accomplish it. If you want to get a washboard stomach, then incorporate sit-ups into your everyday routine. Make it so your day feels incomplete without sit-ups. Having that splinter in your mind will make you want to work on your goal.

All of these are tips, but they are not the most important factor. What is, you may ask? Simple—it’s you. When you commit yourself to reaching a goal, you’ll get there. So get to reaching!

A great way to track your goal progress is with our improved My Total Money Makeover Goal Tracker. Check it out here for free!

More About Goals in Ask Dave

Cheryl in Seattle is making $14 an hour. She lives in an apartment, drives a beater car, and feels like she’s just keeping her head above water. She has $10,000 in debt and doesn’t know how to begin to take care of it. Where does she start? Dave suspects part of the problem is a lack of goals. Hear Dave explain to Cheryl what she needs.

Read or listen to all the recent calls about goals Dave has answered on air.

Click here read full article on Dave Ramsey’s site.

Go Blue!

The win was needed and they delivered. Great job!

Here is an article from Michigan Radio with all of the details.

UM vs OSU game not the best, but one of the most important

U of M quarterback Denard Robinson and other teammates celebrate their win over Ohio State with fans in the student section.

mgoblue.com

Last week, the Michigan football team beat Ohio State for the first time since 2003. While it wasn’t anything like the half-dozen “Games of the Century” these two rivals have played, I believe it might be one of the most important.

Just a few years ago, ESPN’s viewers called the Michigan-Ohio State rivalry the best. Not just in college football, or all football, but in all sports. Period.

But this year’s game won’t go down as one of the best. Michigan entered the game ranked 17th, but the Buckeyes hobbled into their annual finale dragging a 6 and 5 record behind them, their worst team since the 1990s.

But all that just made the stakes for Michigan that much higher.

Visit: http://michiganradio.org/post/um-vs-osu-game-not-best-one-most-important to read more.

Profits on a home sale?

Even in these difficult times for the real estate market, occasionally I have clients with real gains on their sale. It is important to take into consideration the tax ramifications of the transaction and plan accordingly. The IRS has released some new rules as relates to home sales. An excerpt is below with a link to their web site. Please contact me at my office if you are considering a sale of your home and have questions.

From IRS.gov:

If you have a gain from the sale of your main home, you may qualify to exclude all or part of that gain from your income. Publication 523, Selling Your Home, provides rules and worksheets.

In general, you are eligible for the exclusion if you have owned and used your home as your main home for a period aggregating at least two years out of the five years prior to its sale. Generally, you are not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home. Refer to Publication 523 for the complete eligibility requirements as well as exceptions to the two year rule.

Report the sale of your main home only if you have a gain that is not excluded from your income. In most cases, if you have a gain that is not excluded, you must report it on Form 1040, Schedule D (PDF), Capital Gains and Losses.

If you or your spouse are on qualified official extended duty in the Uniformed Services, the Foreign Service, or the intelligence community, you may elect to suspend the five-year test period for up to 10 years. You are on qualified official extended duty if, for more than 90 days or for an indefinite period, you are:

At a duty station that is at least 50 miles from your main home, or

Residing under government orders in government housing.

If you sold your home under a contract that provides for all or part of the selling price to be paid in a later year, you made an “installment sale”. If you have an installment sale, report the sale under the installment method unless you elect out. Refer to Topic 705, Installment Sales, for more information.

Read more

This is only taxing to Spartans!

UM beat Purdue in the big house last Saturday. While the Spartans lost to Nebraska. This all adds up to an important game against Iowa next Saturday.

A convincing, dominant 36-14 rout of Purdue on a picture-perfect Saturday afternoon at Michigan Stadium. And while the Wolverines were turning up the heat on the Boilermakers, the Cornhuskers of Nebraska were dismantling Michigan State. Read the whole story here.

Go Blue!

Rule change benefits employee, not employer

IR-2011-93, Sept. 14, 2011

WASHINGTON — The Internal Revenue Service today issued guidance designed to clarify the tax treatment of employer-provided cell phones.

The guidance relates to a provision in the Small Business Jobs Act of 2010, enacted last fall, that removed cell phones from the definition of listed property, a category under tax law that normally requires additional recordkeeping by taxpayers.

The Notice issued today provides guidance on the treatment of employer- provided cell phones as an excludible fringe benefit. The Notice provides that when an employer provides an employee with a cell phone primarily for noncompensatory business reasons, the business and personal use of the cell phone is generally nontaxable to the employee. The IRS will not require recordkeeping of business use in order to receive this tax-free treatment.

Simultaneously with the Notice, the IRS announced in a memo to its examiners a similar administrative approach that applies with respect to arrangements common to small businesses that provide cash allowances and reimbursements for work-related use of personally-owned cell phones. Under this approach, employers that require employees, primarily for noncompensatory business reasons, to use their personal cell phones for business purposes may treat reimbursements of the employees’ expenses for reasonable cell phone coverage as nontaxable. This treatment does not apply to reimbursements of unusual or excessive expenses or to reimbursements made as a substitute for a portion of the employee’s regular wages.

Under the guidance issued today, where employers provide cell phones to their employees or where employers reimburse employees for business use of their personal cell phones, tax-free treatment is available without burdensome recordkeeping requirements. The guidance does not apply to the provision of cell phones or reimbursement for cell-phone use that is not primarily business related, as such arrangements are generally taxable.

Details are in the memo and in Notice 2011-72, posted today on IRS.gov.

Donald Strom, CPA is an endorsed Tax Services Professional by Dave Ramsey.