Personal Financial Tip Vol. 7 - What's your number?

What's the most important number in you every day life. Social security number? Phone number? ATM PIN?

Try your credit score. Your credit score is getting used for everything from insurance rates to employment review.

The three big credit bureaus use what called a FICO score to determine your credit worthiness. A score of over 700 is considered a good score.

While each of the credit services, Experian, Trans Union & Equifax will provide you with a copy of your most recent credit report (required by law). They usually will not provide you with a FICO score without a subscription.

If you contemplate making a move, buying a house or call, it's a good idea tho pay for the subscription so that you know how strong you are in the financing game.

Business Tip Vol. 4 - Reach out and touch someone

When is the last time you reached out and touched a customer?

If you're in a business where you may only see your customers once a year or less, what have you done to keep your name in front of them?

When I first started in business, I got a lead from a friend about someone looking for an accountant. When I called the guy up he told me that he wasn't looking for one at that time. However, he would do me a favor and put my name on a post it & note stick it on his desk. After the note dried up, he was going to crumple it up and throw it away. My job was to "make sure I put a fresh post it on his desk" to remind him of who I was.

It was a lesson I've kept close for all these years. Now this man was a prospect, but do we do the same for our existing customers? As a consumer, I get really frustrated when I get so much attention from companies as a prospect then I do as an already paying customer. I was actually astounded once when I received a $20 credit on my bill from a phone company simply because they "appreciated my business". They've had my loyalty since.

So I would offer that mining your existing client base for business could be more profitable for you than spending resources on prospects. So reach out and touch a customer today.

I'll close with a joke.

A banker dies and went to St. Peter's gate. St. Peter asked the banker if he would prefer heaven or hell. The banker thought this was an odd question but St. Peter told the banker he could spend a day in hell to check it out.

Knowing that he could spend a the rest of his life in heaven he thought he would check out hell to see if it was everything he thought it would be.

He goes down there and the devil shows him around and everyone's partying, drinking and having a good old time... nothing like he originally thought.

So banker decides that he's lived the conservative life for too long, he's going to have a great eternity in hell. So he tells St. Peter to send him to hell.

The next day, he's awakened by a whip in the back and told to get to work. He's toiling in the inhumane heat, chained to a bunch of other guys.

The devil walks by and the banker says to him, "Hey what happened to the women, the music, the booze, all the fun..."

The devil looks at him and says "Yesterday you were a prospect. Today you are a customer".

Wednesday's tax tip Vol. 7 - Charitable Donations

A number of tax publications seem to be of the belief that that IRS is going to be checking on large non cash donations of clothing, appliances and furniture to thrift operations. As a reminder, your donations of such items need to be in good to better condition and the charity is supposed to acknowledge such.

A good practice is to document a list of a non cash donations so you can be specific as to the donations of such goods. My guess is that the more detail you can provide the more apt your donation will be considered acceptable.

I have recently put together a schedule to aid in your records keeping of such charitable items. On the back of the form is a Goodwill guideline of the value of clothing items, appliances and furniture. If you would like for me to get you one email me at gtvcpa@yahoo.com.

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Personal Financial Tip Vol. 6 - Marketable skills

In my practice, I meet lots of people all over the financial spectrum, and one of the things that you'll notice among the wealthier clients as well as the not so wealthy is that there are common themes amongst the two groups.

Of my wealthy clients, you'll notice one of the themes is the constant upgrading of their skills as compared to the market place. Of my non wealthy clients, you'll notice the lack of improved marketable skills.

To the side is a graph. I lecture this graph to every man, woman and child that will hear it. It shows the supply/demand curve in a somewhat different format. It shows the correlation between income and marketable skills.

The days of increasing income just from years of experience are over. As a recruiter once told me "there's a difference between 12 years of experience and 12 x one year of experience". The days of having a nice job for decades earning an above average income are over.

Think of it in terms of an accountant doing tax returns with paper and pencil. I could never produce the volume of returns I do today simply using paper and pencil, the business has required me to learn computer skills and improving my knowledge of the tax codes. Without that, my earning potential would be extremely limited.

In the 21st century, we will all be required to increase our skills in order to yield increases in pay. Those that don't will end up watching the wealthy pull away.

Wednesday's tax tip Vol. 6 - A Day off

There will be no tip today since I will be taking the day off after the tax season. See you next Wednesday.

Personal Financial Tip Vol. 5 - College Tuition

If you haven't noticed lately, college tuition increases have more than doubled the cost of living rates.

Most schools have resorted to dramatically increasing the "sticker price" on their base tuition. During the admissions process, the schools review the students admission information and "kick back" tuition dollars in the form of scholarships and grants to get your student in.

An example, let's assume your child applies to a top level engineering program. If the student has the minimum SAT and grade point averages for admission, there will be little if any scholarship money available.

However, if you have exceptional grades and SAT scores and are willing to be patient you'll find that schools will offer substantial scholarship money in order to fill their admissions quota and maintain a high quality admission student.

So while I'm not a fan of chaining you student to a desk to get the maximum scholarship money, the student needs to be aware that a little extra elbow grease will go a long way in taking the inflation bite out of tuition

Wednesday's tax tip Vol. 5 - Extensions

If you have not filed your return to date you may want to consider an extension. April 17th is the filing deadline. Note an extension does not give you an extension to pay. I advise clients to file their returns "as is" even if they cannot pay the amount due. That avoids other potential penalties. For instance, your extension can be denied if you did not make an reasonable estimate of your tax liability, which could mean an additional late filing penalty which is much worse than a just simple late payment penalty.

If you need an extension form go to irs.gov and download form 4868.

The states of Ohio, Kentucky and Indiana recognize the federal extension but most cities do not.

Most cities will accept a letter requesting an extension but some do not. Check the link to the side to locate your city and review your options on filing city extensions.

Filing an extension does not increase or decrease your audit exposure and as I tell clients "I'd rather have it right than fast".

If you have any questions about your individual issues email me at gtvcpa@yahoo.com.

Personal Financial Tip Vol. 4 - The power of stability

Year after year, I have clients come in and seem to be treading water financially despite above average incomes.

One of the things I notice most about these people is the lack of stability in their lives. Job changes, new houses, kids, new cars, divorces, remarriages, etc. It appears that each and every year there's at least two significant life changes that really keeps the people sustaining any kind of financial momentum.

To add to these life changes, these same people seem to be the ones who dive into network marketing businesses in the hopes of making extra money; things such as Amway, Mary Kaye, Avon, Longaberger, etc.

It's extremely rare for people to make any long term money in these businesses.

The secret to establishing long term wealth is simply having a plan, working the plan and dropping the drama of life style instability. You'll find that just doing these three things will go a long way in establishing your retirement at 55 rather than 70.

Business Tip Vol. 3 - Time Management

Where do you spend most of your time running your business?

If you had to allocate a normal 40 hr work week between Sales, Production and Administration what would be the percentage breakdown between all three?

I've devised the 40/40/20 rule. 40% of your time on sales, 40% on production and 20% on administration.

As businesses grow, we all have a tendency to skew those figures and end up spending more time on production than sales. But the time and resources on sales is what grows your business. Think of it as a large pipeline. You have to prime that pump for a while to get the oil flowing. Once the pump starts to fill you have to manage what comes out the other end. However, if you don't keep working to keep the oil going into the pipeline it will ultimately drain and you'll have to spend more time priming again.

For now, just observe and note your time management. Just observing your time will have you changing course in no time.

Wednesday's tax tip Vol. 4 - School District Income taxes

Last week we went over the city income tax. Because of the way it's paid, many people can get it confused with the school district income tax.

The school district income tax has become popular in many rural districts where property taxes can be extremely high on elderly people. However, the tax is becoming more popular across the state, and, my prediction, will ultimately be how we end up funding schools in nearly all of Ohio.

The income tax is only for residents of the school district, not businesses or people working in the district. So if you are a resident of Goshen School District you are required to pay Goshen School income tax regardless of where you work, actually, even if you are retired.

Finally, many school districts mirror city incorporation limits so don't be confused if you live in my home town of Lancaster and have to pay city income tax and school district tax; two separate taxes funding two different entities.