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Warren Buffett‘s Financial Wisdom
Billionaires aren’t hatched overnight.

But there will be another generation of such men and women in the next few decades — and chances are, they will tread the same path as those who have come before.

So let’s look at Warren Buffett’s path as an example, shall we?

1) Start with a meat and potatoes small business — and be your own boss.
Buffett made his fortune by doing things his way, not by following the crowd. In high school, Buffett and a pal bought a pinball machine to put inside a barbershop. With the money they earned, they bought more machines until they had eight different shops running their machines. When they sold the venture, Buffett used the proceeds to buy stock and start another small business. By age 26, he’d become his own boss and amassed $174,000 — or $1.4 million in today’s money.

LESSON: Don’t fall for the temptations of a huge, immediate windfall business. Cut your teeth on the side, with something basic, reliable and small.

2) Mind the foxes who steal from the vineyard: small expenses.
In the famous book, The Millionaire Next Door, authors Stanley and Danko report that millionaires live well below their means. They budget, plan investments, and allocate their time, energy, and money into building wealth instead of displaying high social status.

Warren Buffett’s companies are known for watching out for small expenses. Exercising vigilance over every expense can make your profits and your paycheck go much further.

LESSON: The next time you spot a sale or online deal, check in with yourself to see if that $50 is better saved or invested than spent. It might seem like you’re spending a relatively small amount of money, but it all adds up.

3) Debt kills.
Warren Buffett advises his people to limit what they borrow. Living on credit cards and loans won’t make you rich. Buffett never borrowed a significant amount of money, not even for investments or mortgages.

The Millionaire Next Door reports that millionaires’ parents did not provide “economic outpatient care”, and their own adult children are economically self-sufficient as well.

LESSON: If you do give your teenager a credit card, make sure to set firm limits and specify use ahead of time. If they abuse the privilege, they lose the card. Do the same for yourself.

4) Leap forward.
Very often those who supply the affluent become wealthy themselves.  In fact, one of the best ways to make money is to sell products or services to those who already have money. Many people don’t see these opportunities because they’re far too busy seeking money and security in the short term only.

Well, when Buffett began managing money in 1956 with $100,000 cobbled together from a handful of investors, he was dubbed an oddball. But he didn’t allow others’ opinions to keep him from leaping into a profitable venture. Over and above, I might add, others with greater private means.

Lastly, I will suggest this: Get professional advice on new ventures and ideas. We are here for far more than “just” tax planning. I and my team would love the opportunity to sit with you, and help you evaluate the direction of your financial life … and point you in a new direction, should it be necessary. Take advantage of our free report by clicking on the link to your right to help you save more taxes!

1.  Larger Section 179 Deductions. For 2010 and 2011, you may take the Section 179 expense deduction up to $500,000 if you place $2 million or less of such assets in service during the year.  This does not change the limits on sports utility vehicles which is $25,000.

2.  Real Property is temporarily included for the Section 179 deduction.  This means you can expense up to $250,000 for qualified leasehold improvements.

3.  Bonus Depreciation is extended for one more year.

4.  Deduction for Self Employed Health Insurance. For 2010 only, the new law allows self-employed taxpayers to deduct their qualified self-employed health insurance on Schedule C.  This is big as it becomes a deduction that will reduce your self-employment taxes.

5.  No Taxes on Sale of Qualified  Small- Business Stock.   If you buy or set up a new corporation with this type of Stock from now until the end of this calendar year and hold it for at least 5 years, you will not pay any taxes on the gain when you sell it.  Check with us on this as there are many rules you have to follow.

6.  Rollover to Roth. You know that there have been rules to convert part of your IRA into a Roth but this has been expanded to allow some employees to convert their 401K balances to Roth 401K accounts.   The plan you are in must offer a Roth option and the plan must allow an in-service distribution.  Again there are some additional tax strategies to check with this.

We have just hit a few of the items in this act.  Please contact us so we can see how to take advantage of these ideas for you. Warning, there are many exceptions to these laws  so you need to check with a tax professional that can help you.

Contact us, you have worked hard for your money, let us help you look at ways to keep it.

Here are some related articles you can check out.

Related articles

• Economic, political climate make tax planning hard (seattletimes.nwsource.com)
• New tax breaks for the 2010 tax planning home stretch (iowabiz.com)

]]> http://savemoretaxes.com/blog/taxplanningpreparation/small-business-jobs-act-of-2010-tax-ideas/feed/ 0 http://savemoretaxes.com/blog/general/questions-to-ask-your-tax-preparer/ http://savemoretaxes.com/blog/general/questions-to-ask-your-tax-preparer/#comments Tue, 01 Dec 2009 19:43:24 +0000 admin http://savemoretaxes.com/blog/?p=53 These are the questions that a small business owner should be asking before hiring an accountant or better yet, who is this person and why should you trust them to do your tax return.

1. Do they offer Double, No-Risk, Money-Back Guarantee?

#1: Guaranteed Accuracy Or You Don’t Pay!

#2: Guaranteed Satisfaction Or You Don’t Pay!

2. What is this person’s education? He doesn’t have to be a CPA but this does give you a better level of comfort.

3. Do they do taxes all year round or just “do taxes” in the Spring?

Are they available to help you monitor your business activity year-round by preparing “Business Progress Reports” (monthly or quarterly).  Why wait until tax time to know how your business is doing?  To build a successful business, you must keep track of your “bottom line” throughout the year.  The “Business Progress Reports” should be tailored specifically to your situation and will help you know exactly what is going on at any point during the year.  The accountant should run the numbers so you can run your business!

4. Do they don’t just “do taxes” – how about doing some” financial planning”?

If they are a certified financial planner^® and or licensed investment advisor, the accountant could use some financial planning expertise to help business owners implement tax saving ideas that will help with their long term financial goals. They would have the unique ability to look at the total financial picture for you and use their investment expertise to help business owners implement tax-saving small business retirement plans.  There are many tax-deductible plans to choose from—401(k),403(b), SIMPLE, SEP—they could be there to help you decide which plan is best for you.   They could help you and your employees make intelligent investment decisions both from a financial edge as well as from a tax saving view.   You and your staff will save taxes today and “build a nest egg” for tomorrow.

5. Do they don’t just “do taxes” – what about “doing” software consulting?

Can the accountant help small business owners decide what bookkeeping software program is best for their business.  There are literally dozens of accounting software packages to choose from.  Which one is right for you?  And once you find the “right program”, how do you use it to maximize record-keeping efficiency?  Does the accountant provide on-sight accounting software training so you can learn how to use your accounting software right “the first time”, without having to rely on some 800 number for technical support.

6. How many tax returns do they do a year?

How many tax returns do they prepare each year? – I prepare over 350.  That’s a lot of tax returns! The accountant should be able to do all kinds of tax returns, some of which you may have never even heard of:  Personal, Business, Estates, Trusts, and Payroll Taxes. What does that mean for you?  It means that they have the experience to handle any tax situation no matter how simple or complex.  It means that you can count on them to prepare your tax return without any worry – the accountant should have the attitude, “I know what I’m doing and I’m going to “take care of you and your tax return” as if it were my own.

7. Are they a small business owner as well?

Like you, if they are a small corporation, the accountant has to file the same corporate income tax returns as you, and  have to pay them self as an employee of the corporation and file the same payroll tax returns as you.  This somewhat assures you that the accountant knows how to handle your tax situation because theirs is very similar.

8. Whose side is the accountant on?

What is their position with taxes? They should say that they have to pay taxes like everyone else.  The accountant should abhor the amount of taxes that has to be paid, and should realize that most people feel the same way — we pay way too much in taxes!  The accountant’s dissatisfaction with our tax system should motivates them to treat every tax return as if it were their own –  determined that every client pay the lowest tax allowable by law.

Obviously, you may not find the perfect candidate who can answer these questions to your satisfaction but these are questions that you should be asking. I think you will find them thought provoking and will stir up some interesting answers.  I can be reached at 847-243-3600, by visiting my web site, SaveMoreTaxes.com. or by emailing me at Howard@SaveMoreTaxes.com.

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