Realtors! Great "Checklist" for Deductions...

We're going to be going into more detail on some of these deductions.  For instance ANY real estate professional can easily qualify to take a home office deduction, and we will explain why in a future post.

Also... do you like to TRAVEL?  As a Realtor you have a great opportunity to design travel so that you can write if off.  You won't have to work hard at all, and the work you DO do, will bring you future referrals and business.  In the meantime... you still have plenty of "play" time on this tax deductible trip.

FOLLOW us on Twitter for a heads up as we post more Tax Tips: @MaxReturnTax

For now... THIS article from tax expert Stephen Fishman, has a nice checklist you can print out and put in your "receipt file."  Don't have a receipt file?  Get one!  It can simply be a small expanding folder, or just an envelope.  Maybe you'll want more than one... one that stays in the car... one that travels with you... one  that stays on your desk.  Whatever you do... KEEP those receipts.

Why?

Because receipts are MONEY.  Think about it this way.  You go to Office Depot and spend $100. on business items.  Now you can do two things.  You can keep that receipt and deduct it.  Or... you can misplace it.

What does it cost you if you lose that receipt and don't deduct that expense?

Well, if you are in a 15% tax bracket... it costs you $15.  Cash.  Because of course, if you don't deduct that, you have to pay the taxes on that $100 at the end of the year.

Start thinking of receipts in terms of what they are worth in cold hard cash... and you'll become better at hanging on to them.

And... by the way, we'll go over what things you DO need receipts for (even if you have a credit card statement), which include purchases of supplies, equipment, etc.  And, what things you don't need receipts for (like entertainment expenses under $75, or travel meals).  But, for now, keep all your receipts.  You can toss them later easier than you can find them once lost.

CLICK here for the Stephen Fishman article and Realtor Deduction Checklist.

100% Deductible Golf? You bet...

"Business Golf?"
a clever and fun strategy for success

by: Bill Madonna & Sue Copening
Bill Madonna Golf Academy

If you could increase your sales, grow your business, lower your taxes (and perhaps your handicap), feed the hungry, house the homeless, or provide toys for tots all by simply playing more GOLF… would that be something you’d want to learn more about?

Here are topics you don’t see in the same article very often, if at all: golf, lead generation, tax deductions and philanthropy.

Previously, in “Tee UP for Success,” I talked about the benefits that “business golf” has for your business; whether that is simply enhancing the relationships you have with business associates, or enhancing your sales through closer connections with clients. And this isn’t just pie-in-the-sky.

According to a 2002 COMPASS LEADER POLL, business people reported an average of a $1500 return on investment for every dollar spent on “business golf.”

Obviously I’ve got your attention right?

A 1500% return on investment is virtually unheard of outside Las Vegas and rarely in the context of something legit or helping those less fortunate.

You’re going to love this.

As a golf teacher for more than 33 years I never thought I’d learn something new about the game… especially from someone who rarely plays it.

But in talking to Sue Copening, a marketing consultant as well as a speaker and trainer for the Tax Reduction Institute, I learned something about the tax code that, when applied to marketing and “business golf,” as the kids say… “blows it up.”

And this strategy works even if you DON’T play golf!

Sue has been teaching tax strategies to business owners and professionals for nine years, and has been teaching marketing strategies for even longer. Her brain is sort of the “Fibber McGee’s closet” of diverse and random knowledge and, when she opens the door and lets it spill out, it becomes something quite more useful than a pile of old tennis racquets, gym socks and monopoly pieces.

I knew already, from personal experience, and the poll above, that playing “business golf” is an essential tool for many professionals, however I really didn’t have a grasp of the “big picture” when it comes to the most strategic, and cost effective use of the game until talking with Sue recently.

When it comes to marketing and prospecting for your business, or for sales, it’s safe to say that the demographic most professionals seek out is people who can actually afford their product or service; to put it bluntly… people with money.

So, which group of people do you think have more money… random people out there in the community… or people who play golf?

Pretty obvious right? Study after study has shown that golfers, on average, have a higher income level and spend more money on “discretionary” or luxury items. This is why you can find them on on the golf course in the first place, and why on every golf show on TV you see Mercedes and Rolex being advertised instead of Yugos.

So, we can agree that, for most of us, golfers are highly desirable as potential clients.

So… playing more golf is a “no brainer” as a prospecting tool. Going out and playing 9 or 18 holes and hanging out in the 19th hole (the bar for you newbies), you’re going to meet golfers. You can even go alone and ask to be “matched up” with other golfers needing a 2nd, 3rd or 4th player. Sort of “pot luck prospecting.”

We also know that investing in “business golf” brings big returns in strengthening business relationships with our existing customers.

So… we want to play more golf with our current clients too, right?

But, can we do BOTH?  Can we meet new golfers and play more often with our current customers, and do it in a way that becomes a very powerful strategy?

Yes, we can.  Yes, YOU can!

I’m going to tell you HOW in just a minute (no jumping ahead, it will cost you money), but first let’s talk turkey… I mean money.

Obviously we can expect to get a good return for the dollars we invest in playing business golf, and I’m sure if you are self employed, or a small business owner, you know that playing golf, when done properly, and documented properly, is a “business entertainment deduction” under the IRS tax code.

So you actually get to deduct 50% of your cost of the golf, along with your meals and parking costs.

That’s pretty great right?

But let’s face it, a 50% deduction for something we are doing to grow our company, increase sales, AND something that pretty much shoots a day of our time is pretty lame. We should be able to deduct ALL of it. Do you think we could?

Yes, we can.

Here’s the concept I got from Sue.

Golf TOURNAMENTS.

Scrap the random golf game and put a strategy into your business golf.

Every week, sometimes multiple times a week, some country club, somewhere in your town, is hosting a CHARITY golf tournament.

A good many of these tournaments don’t cost you any more than if you went out and played golf by yourself, plus you get free gifts and the opportunity to win prizes to boot.

They are usually held on a Monday through Friday. Why is that? Because the club gives the charity a break on the fees when they hold it on one of their slower days.

AND… who comes out to golf tournaments on a weekday?

Business owners, executives and decisions makers. Representatives of the corporate sponsors of the tournament. Basically, if you are a sales shark, these people are shark bait, are they not?

So, we can agree that a golf tournament is a much better “prospecting pool” than just a random day at the club.

But let’s take it up a notch.

Did you know that there is a special tax code called “Special Sporting Events?”

Basically that code says this, and I’m paraphrasing to make it simple,…

When you play in, or buy tickets to, a sporting event that’s net proceeds benefit a charity, that is staffed primarily by volunteers (more than 50%), AND you use that event as what would otherwise qualify, under the tax code, as “business entertainment,” … that event is 100% tax deductible!

Not just the event, but meals and parking associated with it.

WOW.

So, your assignment, should you choose to accept it, is this…

Scrap the random golf game. Get on the phone and call the local country clubs and ask what tournaments they have coming up. Put them on a calendar. Google the local charities and see if they have any upcoming tournaments.


To “kill two birds with one stone” ...Look at your prospect or client list and see who you might like to invite out to play with you that day. That way you are meeting new clients and solidifying that relationship with current ones at the same time!

Remember that I said you don’t even have to be a golfer for this strategy to work?

Do you know that most tournaments will sell you a ticket to just the banquet lunch or dinner, OR the “mixer” after the tournament?

So the bottom line is this… you get to hang out with 40 to over 100 golfers, in an environment that is perfect for meeting new people and networking. You get to sit at a table and get to know those around you even more in-depth AND the whole thing (if done and documented properly) is 100% tax deductible with the net proceeds going to help those less fortunate than yourself.

I call that a business golf version of a
“win-win-win” with a karmic cherry on top.



Bill Madonna is a PGA “Master Professional” and owner of the Bill Madonna Academy of Golf at the Marriott World Center in Orlando. Golf Magazine recognizes Bill as one of the Top 100 Golf Instructors in the United States. Bill is also the official golf coach for the Citrus Club.


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Create More Deductions with a Part Time Business!

Working from home has never been easier... NOR more essential, than it is today.

With 65% of American’s having already lost, or worried about losing, their jobs, the number of home based and small business start-ups has dramatically increased over the past several years. Some reports indicate an increase of as much as 12,000%!

Whether replacing income due to a job loss, or simply creating another income stream to provide greater financial stability, more and more American’s are getting the “entrepreneurial spirit” and launching their own business.

Financially it’s a smart move, since just starting a business increases your bottom line instantly. Why? Because owning your own business is the ultimate tax shelter.

“The No. 1 way to reduce your taxes is to convert your personal expenditures into allowable deductions. Turn yourself into a business owner. This is not complicated, expensive or difficult to do, and incorporation is not necessary.” Says Jeff Schneppe from MSN Money (more at: http://bit.ly/schnepper )

Just starting a (full OR part time) business produces, on average, about $10,000 in tax deductions out of money you already spend. Depending on your tax bracket, that is thousands added to your bottom line before you have even made any money in the business.

Do you like to travel?  It's easy to learn the IRS rules so that you can design travel around just enough business to make the trip tax deductible.  You'll still be able to "play" more than half the time and the work you DO do... will help you make more money down the road.

Do you like going out?  Make every visit to happy hour tax deductible.  Make every round of golf deductible.  The IRS rules make this simple, once you learn them, and how to document them properly.

Do you have an area you work at from home?  When you are self employed the rules for deducting part of your home, utilities, maintenance, etc., become very easy.  In fact there are NEW simplified rules for the home office deduction that took effect in 2013!

It's EASY to increase your deductions, and your "take home pay." by creating a part time business! The key is to find the business that is right for you, and to “fill in the gaps” in your skill set to increase your success level.

Any successful business is like a 3-legged stool." 

says Sue Copening, Director of Central Florida's

Connections Groups.

“One leg is your product or service, the 2nd is your marketing and the 3rd is management, which includes financial management and educating yourself on the tax deductions avail to you as a business person.

All three legs need to be strong, for obvious reasons. No matter how great your product or service is, you must market effectively in order to get it in front of potential clients. On the management side, taxes can eat up 20-40% of your gross income, so it’s essential to take every deduction you are entitled to.  Learning about the deductions that apply to small business owners means you can turn some otherwise personal expenses (such as entertainment, travel or a home office) into legitimate, deductible, business expenses.”

The great thing is… this IS truly the best time to be starting your own business. The internet is right at your finger tips and is a huge resource for everything you need to get started.... from knowledge & learning resources to avenues for marketing your business.

Want some ideas for what kind of business to start? Try “Googling” a phrase like “best business ideas” and you’ll come up with articles like this one in Entrepreneur.com: “Need a Business Idea? Here are 55” (at http://bit.ly/bizideas )

Think your favorite hobby could be a good business? Make sure you are thinking of all the angles by googling “turning your hobby into a business” and you’ll turn up this article in StartUpNation.com: http://bit.ly/hobby

If you have start up capital you might look at a franchise or even purchasing or buying into an existing business. While this can be riskier, the trick is to fully investigate, choose wisely and use an experienced attorney. It’s a business, so don’t get emotionally attached, and be ready to walk away if there are too many “red flags.” That said though, there are many successful business owners that want to retire at some point and are often willing to stay on at the business for a period of time to assist the new owner with the transition and help introduce you to their valued clients.   If you don't have the capital to outright purchase their business, you could approach them about a partnership for a few years with the goal being to buy them out down the road.

If you don’t have much start up capital, consider becoming part of an MLM or direct sales company. The advantages to that are that you step into a “turn key” business where you are generally provided with low cost marketing materials, a product (or products) that may have a proven track record of sales, and the ability to create “passive” or residual income by building a team and bringing others into the business also. Don’t get caught up in a company’s “hype” though. Use common sense and a check-list when evaluating each opportunity.

I want to see several things with 

any business opportunity I look at. 

Whether it's an MLM, a direct sales opportunity, or even a job offer...

First off, let me clear this up... an "mlm" (multi-level marketing organization) is a perfectly legitimate business model, however, you must know how to analyze one correctly.  An "mlm" has it's benefits, and it's faults...

Benefits...

1) Low cost to start your business
2) Turn-key system, marketing materials and products provided
3) Once you build a "team," and have a solid residual income coming in, you will make money even when you aren't working (I once made over $6000 for the two weeks I was on vacation).

Faults...

1) No matter what they tell you... ALL businesses involve SALES in some regard.  If you are afraid to pick up the phone and call people, or ask for the sale, you will not enjoy it and, mostly likely, will not be successful.
2) A company can be a "legitimate" mlm, but still function like a "pyramid scheme."  What do I mean by that?  I mean that if the products don't "stand on their own merits" - if people are ONLY buying the product or service because their motivation is really to be "in the business" then, once the company reaches "saturation" it because very difficult to bring new people into the business and the whole thing crumbles from the bottom up because people start dropping their auto-ships.  On the flip side, if the products are strong - and people would buy them anyway - you always have a legitimate sales opportunity and, while you might never become wealthy, you can still bring in a steady and reliable income, which is what the vast majority of us are really looking for.

SO, if it’s an MLM I want to know where the money comes from. Is the majority of it from sales of the products and what percentage of the products are sold to consumers versus the companies own reps or agents?  A good mlm should have a strong percentage of "consumers" that are NOT in it for the "business aspect."  This is sometimes hard to tell, because a lot of people will pay the small amount of money it takes to become an "IBO" (independent business owner) just because they want to get the products wholesale.   So you need to talk to people and also ask yourself... "would I, or anyone, buy these products regardless of where I had to buy them?"

I want to know the products either have long term success, or the potential for it. How are they priced compared to their competition? If the products are low priced... are they a consumable?  Do they SAVE people money or cost them money? Is there a lot of competition? Is the market for the product oversaturated? What is the ‘market reach’ for the product or service? In other words, out of 100 random people, how many are good prospects?

What does the company charge to get into the business and are there mandatory monthly fees or a requirement to buy product? What will your marketing costs be? Will it be necessary to spend a lot of money on samples?

If there is a monthly auto-ship do NOT get into the company unless you absolutely love the products - the reason "mlm's" have a bad name is a direct result of garages stacked high with products bought by people who fell for the "hype" of the 'business' and not the actual product.   If someone is trying to get you to sign up and they are focused on the money - and say something like "don't worry about the product - its incidental" - RUN, don't walk, to the nearest exit.  Just my opinion, but a company without a product is not a real company - it's no more than a "pyramid scheme" that has figured out how to be "legal."

What does the compensation plan look like? Realistically, how long will it be before you make decent money, keeping in mind that it’s an 80/20 world out there and, generally speaking, less than 20% of your new reps will “stick to” the business aspect (which is why you want a good mix of "consumers" and "business builders").

Finally, how does this particular product or service “fit” with your other business, career or lifestyle? For instance, if I’m an out of shape couch potato, selling a nutritional or fitness product would be a challenge, but if I work in heathcare, or I'm “gym rat,” I’m already in a “target rich” environment surrounded by many people who will be receptive.”

What companies does Sue Copening, of Connections Groups recommend right now?   Qivana and Worth Unlimited.  Qivana is a mlm - Worth Unlimited is not - but IS a "direct selling" company.  I'm sure there are other solid companies out there... do your research!

Important TIP:  Make sure you have personal PASSION about what you do so that talking about it comes naturally.

Worth is a program we recommend to our clients who want to get out of debt and become better financial managers.  It's great for insuring you have a firm financial footing, both personally, and for your business.

Worth is an award winning software and coaching system that helps their average client get debt free in about 1/3 of the normal time... and saving over $100,000 in the process. 

As a "business" while Worth is not something that is appropriate for everyone.  It is perfect for anyone in a business where they talk to clients about money, debt, real estate, credit or finance.  For them, it simply becomes something they refer a client to and step away.  The company does a detailed financial analysis (free of charge) to determine what clients will benefit from the program, and if they are ready to move forward, the company gets them set up and simply sends the referring party a "referral fee / commission" for simply suggesting the client take a look at it.

Now... what OTHER things should YOU look for in a business?

Consider...  How will you "market" your product? It better be in a way that you enjoy... because you'll want to spend a good amount of time doing it. If you enjoy playing golf, consider selling promotional golf products.  If you work out, enjoy sports, or work in health care - then obviously a health related product is a good fit.  Don't do something that is "counter-intuitive" to your natural lifestyle!

You need good sales and communication skills in ANY business. Consider joining a group like “Toastmasters” (http://www.toastmasters.org ) where you will learn and get support from other members as you improve your speaking, communication, persuasion skills and body language. As you develop your skills you have the added benefit of building new business relationships with the other members (any environment, event or social gathering is an opportunity to “network” for your business too!).

Design a solid marketing plan for your business. How many phone calls will you make each day? How many face-to-face events will you want to attend each week? WHO are your customers? How can you most effectively get in front of them? How will you market on the internet? What about the new “social media” craze? How is your time best spent? For your business, will it be “Twitter” or “Fritter?” Educate yourself on marketing strategies for small business through books (public library) and the internet (new technologies) and “target” your market like you’re using a laser scope, not a shotgun.

"Network like a Rock Star!"  Join networking groups, associations and “get out there” and meet people. An event doesn’t have to be a business event to be a good networking environment. Depending on what you do, events like (for instance) a charity golf tournament might be the ideal way to meet new clients. Think about who will be there. A charity golf tournament is usually attended by business men, but not just any business men, because they are usually held during a week day meaning the players are generally decision makers, owners or executives. If your product or service fits this demographic… buy a ticket to play… or just to attend the luncheon or dinner portion.

Networking groups are a great way to hone your presentation skills, refine your “elevator speech” (a 10-30 second introduction of your business), and develop long term, mutually beneficial, business relationships. Keep in mind the key is to develop relationships, not “sell” at the event. It’s a “Kevin Bacon” world… “6 degrees of separation” …everyone knows everyone. While “Bob” might not be a good prospect for your product or service, Bob knows lots of people and some of them will be.

To find networking groups just google/search for “business networking” and your city name. If you are in Central Florida, your first stop is Connections Groups where you can set up a free profile for yourself and check the calendar of events.

In closing… the opportunities, possibilities and resources for those wanting to start a part or full time business have never been better than they are right now and, depending on the length of time we will be facing a challenging economy, there has never been a time when starting that new business, or income stream, is more necessary or helpful.

I personally believe that you only need to know two basic things to be successful in business...

1) The first thing you need to know is that you don't know everything (self-assessment is critical - figure out what you don't know).

2) The second is that whatever you DON'T know... you can teach yourself, or learn from those that have gone before. And... a lot of that knowledge can be picked up for free from your local public library and the internet."

So get going… start reading… googling… learning and planning.

"Go for the moon. If you don't get there, you'll still land among the stars.” …Willis Reed