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Expand Your Business and Increase Margins with Outsourcing

Starting a business is an act of love and courage. Enjoying a task soon becomes a business. You might start working out of the home or buy a small store front. The previous hobby now commands more of your precious time. A business is about more than making money. Small business owners love the work they do and get paid to do it. Awesome! Then reality sets in.

When I was a sophomore in high school I fell in love with the stock market crash of 1929. The teacher said economists don’t know what really caused the crash. The Smoot-Hawley Tariff was probably the trigger but many other events also played a role. I could not let it go. Every book in the school and public library in my small town was in my paw, devoured for any tidbit of information on why things went so wrong in 1929. I never found a definitive answer, but I did learn a lot about economics.

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Workflow in a Tax Office

The more traffic grows on The Wealthy Account the more questions I get from accountants wanting to know how to run their office more efficiently. The tips below can be tweaked to work in many business settings and can be applied to personal management of time with family and friends while allowing ample “me” time for reading, thinking, and relaxing.

The workflow process in my office evolved over time as the tax industry changed and my practice transformed from a tax office to an accounting/payroll/bookkeeping office to its current incarnation as a quasi-communications company focusing on tax issues. So you understand my thought process I will walk through how I handled workflow in the past and why I changed procedures when I did. By seeing each stage of my workflow history you can pull the pieces that fit your situation best and modify them for your needs.

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Mister Indispensable: Everybody’s Go-to Guy

I am writing this as the tax extension deadline is a week away. Tax returns I delegated to my team are starting to boomerang back to my desk. Some issues are beyond the comprehension of everyone but me. This confuses me. How can I be so much smarter than everyone else? What makes me so special?

The first issue perplexing me is the Indispensable Man theory. It goes like this: I want to earn more money but I am unable to close the money accounts. As you can see it does not work. Avoiding the tough cases holds people back in their career. If the boss does the work you can’t claim credit for the project.

The second issue is that the Indispensable Man is only an illusion. There is no tiny bag of pixie dust hanging at my side I can use to fix any problem showing up. Okay, maybe I do. It’s called an absolute confidence I can figure anything out and get it done. I am not asked to perform brain surgery (and if I was I could do it given enough time to research the subject and consult with other professionals); I am asked to perform a task in my field of study. All the resources available to me are available to all tax professionals. Nothing special in my bag of tricks.

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Reader Case Study: Deciding When to Start Your Own Business

Sean is a CPA who sent me an email asking a list of questions about how I started my business, how I operate successfully, handle problems, and balance work and personal life. It is a common request from members of the accounting industry. They want to know how I pulled this stunt off. In the past I touched on the subject; today I will dig deep using Sean’s email to drive the narrative.

Even though this story is about my experiences in my business, most of what I do works for other business models with slight modifications. The hardest part for a professional earning good money is to jump into the unknown of private practice and the certain decrease in income as a business is started; the money comes later. There is also fear of the unknown. I will share how I managed these issues. This will sound different from what you hear from other people or the media. The only reason I can give for the dichotomy is 1 in 10 businesses survive the first five years. Since I am one of the survivors, my story will differ from the majority, 9 out of 10 crowd.

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Don’t Leave the Lights On For Me

A few months back I was in a conversation where the topic of sabbaticals arose. A member of the group worked for a company that allowed employees a one-year sabbatical in the past, but ended the practice when employees who took the sabbatical tended to never return. According to my friend it was the best employees who decided a sabbatical would refresh and recharge. What the company hoped would be an opportunity for star employees to get away from the frantic pace of life turned into an early retirement plan. I laughed heartily until I realized I have employees and know how hard it is to find and keep good ones.

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Avoid an IRS Letter by Audit Proofing Your Tax Return

The IRS has audited tax returns the last several years at a historically low rate. Individuals faced a 0.84% audit rate in 2015; millionaires, 9.55%; Schedule C sole proprietor taxpayers, 4%; partnerships, 0.51%; and S corporations, 0.40%. (Source: The Kiplinger Tax Letter: Vol. 91, No. 4) None of this makes a difference if your number comes up. Over the years I developed methods to reduce risk of audit. My clients are audited at a fraction of the national rates due to the steps applied to all tax returns leaving my office.

IRS audits are expensive even if you did nothing wrong. Hiring an accountant to navigate the audit process is time consuming regardless of guilt. Unlike criminal law, in tax matter you are guilty until you prove yourself innocent. The burden of proof is on you to provide proof of income and deductions should the government come knocking. Below are several tips to reduce your risk of getting an unfriendly letter from Revenue.

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Why I Know Your Tax Return Is Wrong

I sometimes play a little game with people to prove most tax returns are prepared wrong. Before any tax professionals reading this start writing nasty comments I confess I also make errors on tax returns. I get it. Tax season is more triage than solid tax planning. However, once tax season slows down it is time to put your tax preparer to work saving you money, building your net worth, helping you with early retirement and making your life easier from a financial and investing point of view.

Certain errors on a tax return are understandable. Maybe you did not know the tax law or you forgot to tell your accountant about a certain income or expense. Other errors are unacceptable. These include transposed numbers or forgotten elections. This is sloppy tax work and it drives me insane. Anyone plugging numbers on a tax return must review their own work and reduce the number of issues on the return to zero before sending it to the final reviewer.

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