Wednesday, January 22, 2014

CLEAN UP YOUR WORKSPACE


Every year at our office we have a cleanup day.  We schedule this on a Saturday so it won’t interrupt the workday.  This is a time to go through and purge all the unnecessary items that tend to cause clutter.  We are continually amazed by the things that we can donate or throw away.  This is a great way to start the year clutter free and organized.

Christine Bartlett, Office Manager

Thursday, January 16, 2014

THE PLANNING MEETING

Gordon Bower and I were having lunch with an attorney friend of ours last week and the discussion turned to their annual planning retreat.  They, like us, have a formal annual planning retreat where all the owners of the firm and their spouses go away for a few days and plan out how the firm is going to operate for the next year.  Our firm has been doing this for the past 25 years or so and it has been a huge help to our successfully running the business.  At the meeting we keep formal minutes, discuss all aspects of operating the business and plan out all our major actions for the coming year.  We make decisions about salaries, equipment purchases, marketing techniques, office space, operating expenses and anything else that comes up.

By taking our spouses we are able to get their perspective on major issues, which is very helpful, and we do some team building in the process.  We have found that it is absolutely imperative that the retreat is held away from both home and office.  This point is hard to convince other business owners of, but it really is a necessity.  The most common excuse we hear is that the business owner can’t afford to take the time away from the business.  However, over the years we have been able to direct a few of our clients to have this type of planning retreat and they have universally agreed that it is the best thing they do all year and that they can’t afford not to take this time away from the business.  Much of the anxiety of running a business can be greatly reduced by taking this special time to discuss and make decisions about the operations of the business for the coming year.

To get you started you could use your financial statement or tax return as a guide and go through the document line by line, discussing each category of income and expense.  Much emphasis should be placed on the sales category since it entails the major areas of marketing, collections, and customer satisfaction.  If you need help getting started, we could help you set the agenda, but by all means, consider making the business planning retreat an annual event.  You will be glad you did.

Loren L McCann, CPA, MS (Tax)

Tuesday, January 7, 2014

WHAT PERCENT OF YOUR INCOME DO YOU PAY IN INCOME TAX?


There is a lot of talk in the media and among friends about how much we pay in income taxes in this country, but we have found that most people really do not know the answer to that question.  So that you will have a better idea of how much you are really paying you can find your tax liability on your tax return and divide it by your gross income to determine the percentage you pay in income taxes.  For example, on the 2012 tax return, you could divide line 55 by line 22 from the Form 1040. 

If you want to include Social Security tax in the calculation, which is a good idea, the calculation is a little more complicated.  To include the Social Security tax you would have to add the Social Security withheld from your wages, found in boxes 4 and 6 of your W-2 forms, to line 61 of your Form 1040, and then divide that sum by line 22.

Most people discover that they are paying a smaller percentage than they have been led to believe.  Regardless of what you find as your answer, at least you will be dealing with facts instead of impressions or media hype.
 
 
Loren L McCann, CPA, MS (Tax)