It seems that barely a week goes by without the IRS warning us of a new tax scam. If you pile them up together, it becomes rather frightening.

But I am here to try to spin this in a more positive direction (and it isn’t even that much of a spin).

First, realize that the high number of warnings being released means that people are aware of them and actively are trying to shut them down. For the extra curious, take a peek at the IRS’ news releases and see how many headlines concern security, data, scams, etc. Although I realize this easily sets up humorous retorts, it shows that the government is doing something, and maybe a lot of things.

There was even a Security Summit at the end of the last month, where tax agencies gathered with private-sector interests to make sure they do not remain complacent and continue to stay on top of security issues. If you curious ones want to delve deeper, read the report on it here.

This will not be the tone given with most of these stories, though, for fear makes better headlines. Taxes feel so mysterious to most people that is easy to tap into a sense of danger when talking about them. Paying taxes already involves money being sent somewhere unknown, taken by an entity with which we rarely have any interaction and the benefits of that relationship are never immediately apparent. At the same time, we know there can be stiff discipline for not fulfilling our end of the relationship.

Losing money and potential penalties? Those are the stories you want to know about. The government taking steps to keep your money safe? Then it is just doing what its job, no need to discuss.

As the do-it-yourself tax business continues to grow, stories of security concerns are destined to multiply with it. Those of us who work in the tax-preparation business have rules that we need to follow to ensure that our clients’ information remains safe. The more that tax work happens in more (less secure) places, however, the more chances there are for more criminals to take advantage of it.

So although I believe there is reason for calm when it comes to this area, it is not something that should simply be ignored. My biggest piece of advice when it comes to this – and it can apply to every avenue of life – is be mindful.

If you get involved in any situation that does not feel legitimate, chances are that it is not. If by some chance you are ever having a real interaction with an actual IRS agent, you are not going to make the situation worse by taking the time to confirm credentials. Call it an extra layer of security.

And that leads to the second important rule to remember. The first interaction with the IRS in any official capacity will never be a phone call, but through official correspondence sent through the mail.

Now for the more self-serving bit, as I remind you that working with a tax professional can be an even stronger layer of security. We are already abiding by those previously mentioned rules established to keep your information safe. And if you ever do receive some of that official correspondence from the government, wouldn’t you already rather have someone already on your side and not be going at it alone?

Last blog, I wrote about taxes. Yes, even as summer was ramping up with the approach of July 4^th (and may you have had a wonderful holiday and enjoyed a longer weekend), there was something to be said about taxes.

Of course, I would like to think that this is the time of year when I have nothing but extended weekends and do not need to spend time worrying about taxes. We do have to do that, though, and that is what makes us so good at what we do.

You may not have to worry about taxes at this time of year, but we still are. That means that come tax filing time, you still do not have worry about taxes and can entrust your return to us because we are worrying now.

Sometimes this means interesting stories come across our radar that you may not have seen. I want to bring you a couple of those this week. That’s right, a second tax article at the height of summer. We must be into this stuff or something.

First, I am sure many of you at some time in your life received an IRS Form 1099. Essentially, this comes for any income you received that did not come through a W2 employer, so taxes were not automatically paid from it. It thus is well known for any self-employed person or independent contractor.

But can you imagine one being sent to a strip club?

In an interesting accounting trick, it recently came to light that boxer Floyd Mayweather Jr., did just that, sending a 1099 form for more than $20,000 to Larry Flint’s Hustler Club in Las Vegas. From a tax perspective, how this plays out between how the tax burden on the club or the dancers is interesting. From a layman’s perspective, hey, who can’t see the humor in Mayweather’s audacity and strict accounting when out at the club.

It isn’t the typical way that 1099s are used, and Forbes.com’s Robert W. Wood sums up the situation:

More than a few observers are probably wondering how they too can start issuing IRS Forms 1099 to turn the tax tables on someone. Issuing a Form 1099 is something businesses do to verify that payment was made, and to help support tax deductions. Of course, by issuing a Form 1099, you are generally also sticking the recipient with paying taxes on the item. In that sense, some IRS Forms 1099 may conceivably be issued with a kind of punitive intent.

I guess some people out there can afford to try to be a little more punitive after those situations when they couldn’t believe what they did the night before.

Inherent humor aside, this story highlights the complexity of tax issues and how something that seems obvious like a 1099 can be turned and used in situations that we never imagined. Those entanglements lead to time being spent navigating the tax waters, but just how much time?

Taxfoundation.org recently published some research that looked into this question and determined that an astounding 8.9 BILLION hours are spent complying with tax filing requirements every year. In a fairly extensive breakdown that you can look at by viewing the article, it is determined this costs $409 billion a year.

With such tactics and numbers abounding in the tax world, aren’t you glad that we are paying attention? 

We are now exiting June, and many may be surprised to find that we were a little busier over the past month than usual. (We swear it’s not all beaches and margaritas after April, but not everyone believes us). You see, we got a pretty steady flood of questions around mid-month when quarterly estimated tax payments were due.

This does not affect every taxpayer, as many have enough taxes being taken out of their paychecks to cover their annual tax bill. If this is you, congratulations, you are all set and we can’t wait see you next tax season.

This is not everyone, though, and for the rest of you the IRS would like you to be checking in quarterly (well, not quite quarterly, but four times per year, more on that later). So let’s start with the agency’s two rules for requiring you to make quarterly estimated payments, which sound a little complicated, but if they take them individually they are not too bad. And keep in mind that both situations have to apply for you to fall in the group that must make payments.

First, you must expect to owe at least $1,000 in federal tax for the year, after subtracting federal tax withholding and refundable credits. In easier terms, if you expect to be making at least a $1,000 payment before next April 15^th, this is you.

Second, you must expect that your federal withholding and refundable credits to be less than the smaller of: 90% of the tax to be shown on your 2016 return or 100% of the tax shown of your 2015 return (if it was for a full 12 months). This just means the IRS wants to be sure they are getting enough money to cover their expected bill. The government isn’t too keen on you keeping that money for now, they would rather get the interest.

Now we get back to when these payments are supposed to be made. The first two for this year (covering  the periods from January 1-March 31 and April 1-May 31) already passed. There are upcoming due dates of September 15 for the period covering June 1-August 31 and January 17, 2017 for the rest of 2016.

Making these payments is done by estimating your adjusted gross income, taxable income, taxes, deductions and credits for the calendar year. This is done on Form 1040-ES, which includes an estimated tax worksheet. It also includes instructions that go way more in depth than is suitable for this space. It sometimes does it in language that is typical government-ese, however, so remember we are in your corner if you need help navigating it.

A large number of those who are affected by this situation are the self-employed. If you are not receiving a paycheck from an employer, the IRS is missing out on the tax payments that would come along with it and it would like to get some of its taste through the year. This is an unavoidable aspect of being self-employed, but instead of thinking of this as an unnecessary burden, try to frame it as being proud that you are successful enough to be earning enough money that you fit in this schema.

If you are not self-employed and still fit the IRS’ rules for these quarterly payments, though, maybe you would like to increase your withholding to cover the liability. The government is always happy to take more money from your check, after all. Again, feel free to contact us if you want some guidance on figuring out what you should be paying, and from there it can be easily changed with your company’s payroll department.

So until September 15 …. 

Does it ever seem like some people know everyone? At the least, they know someone who knows someone who can help you with any problem you have.

Of course, there are times when this type of person is overbearing, and their attempt to connect themselves is self-serving, heavy-handed and quickly wears thin. There are a few, however, who we find genuine, whose connections serve us well and who we are happy to know.

Relationships with that type of person should be cultivated and allowed to shine.

Last week in this space, I wrote about being open to reaching out to others, giving information about what we do, and sharing this with others who could benefit from it. Of course, some people are just better at this than others.

In his book “The Tipping Point,” bestselling author Malcolm Gladwell looks at the idea of ‘epidemics,’ not from a viral standpoint, but through the spread of ideas. He tips off (forgive the pun) some of his findings in the book’s subtitle, “How Little Things Can Make a Big Difference.”

If you don’t believe that little things can make a difference, let me steal a thought experiment from Gladwell’s introduction. Imagine that you had a piece of paper you could fold in half 50 times, how tall would it be at the end? No matter how difficult it may be to believe, it could reach the sun.

It is the mathematics of exponential progression - once things begin to build, the numbers can take off. In this scenario, after all, just one more fold of the paper makes it big enough to get to the sun and back.

That concept helps show why it is good to reach out to the right people; they may be just one person, but they can reach many more. Gladwell picks out three types of people who are powerful at affecting others: Connectors, Mavens and Salesmen.

Connectors are those who cultivate large numbers of acquaintances and, thrive off knowing many people. They keep a foot in many different areas, so they can draw people together whose worlds may otherwise not have collided.

Mavens are those we trust for expert opinions. They pride themselves on finding the best deals, the best places to eat, the best places to stay and do it with a level of precision that gives credence to their opinions.

Finally, salesmen are those with a charisma that convinces others to listen. We tend to know when we are being sold a bill of goods, but we also know that sometimes it has been done well enough to work.

This doesn’t mean that to be a thriving member of a community you need to be one of those three types. They are just the ones who have the natural abilities to be influencers. Those types are so strong that it probably won’t take much thought to come up with an example of each in your life.

If you are not one of those types, you cannot force yourself to become one. Being aware of them, though, can help you use their power. If you are an individual looking to reach into different social circles, connectors can help. If you are in a business that could serve someone who is a maven or salesmen, put a little more effort into that relationship, for it is bound to pay off exponentially.

And if you doubt the power of these types, here is a final example that Gladwell gives in his book:

In the late 1960s, psychologist Stanley Milgram conducted an experiment to find how human beings are connected. He mailed a packet to 160 people who lived in Omaha, Nebraska. The recipients were also given the name and address of a stockbroker who worked in Boston. They were told to write their name on the packet and mail it on to a friend or acquaintance that the person thought would get the packet closer to the stockbroker. The idea was that Milgram could trace the hands the packet went through until someone delivered it to the stockbroker.

Amazingly, half of the responses reached their endpoint through the final hands of three people. “Dozens of people,” Gladwell says, “chosen at random from a large Midwestern city, send out letters independently. Some go through college acquaintances. Some send their letters to relatives. Some send them to old workmates. Everyone has a different strategy. Yet in the end, when all of those separate and idiosyncratic chains were completed, half of those letters ended up in the hands of Jacobs, Jones and Brown. Six degrees of separation doesn’t mean that everyone is linked to everyone else in just six steps. It means that a very small number of people are linked to everyone else in a few steps, and the rest of us are linked to the world through those special few.”

And it is very worth knowing those special few.

I like to think that putting words in this spot gives our company the chance to reach out to you in a way that goes beyond a business transaction. That is a gratifying part of being in business that does not always get embraced, the building of relationships. I am sure that no matter whether you’re a long-term client or one on the newer side, and whether we have multiple interactions per year or only talk during tax time, we each have things we could say to each other that stretch beyond business.

So this is a way to do some of that, to put my thoughts onto virtual paper, place it where those I know can see it, and hope it resonates with some of them. Yet, it is impossible to say that it is not partially business-driven, for I also hope that it also gives a chance to make you aware of some aspects of our business you did know about.

That last bit there is what I want to focus on for the rest of this piece. First, if there is ever any sort of financial service that you wonder if we provide, please ask. I certainly cannot promise that the answer is yes, but if it is not, I am sure we can at least help point you in the right direction.

Beyond that, though, please also do not be afraid to let us know if there is something YOU do that we could benefit from. It is possible that we only know you as an individual whose taxes we see once a year, and those W2s and 1099s don’t exactly give the full picture of what you do. We are all more interesting and useful than those numbers, so if there is more to you that you think we should know … let us know!

Also, let us not be afraid to go beyond that.  We would love to be a place you feel comfortable sending your friends. So if you know someone who would benefit from any of the services we offer, please feel free to put us in contact with each other. And again, from the opposite direction, if you think we may be doing business with people who could benefit from your services, let us know and we would love to point them in your direction.

Too often, being in business can feel like you are on an island. We get into ruts where we do not branch out enough beyond what we have always done. We know what others do for us, trust in their work on those tasks, but it goes no further. So consider these words an attempt to go a little beyond that with those we work with. (Or have yet to work with, if you are looking for new services, we want to hear from you, as well. In the interest of ‘going beyond,’ new networks would only help.)

It is an idea can be taken beyond the business world, too. Let us be open and honest about who we are, what we do and the things we desire. Let us then be open to accepting help from those who give it, give it those we can help, and lead others to where they can receive it. 

One of the best parts of doing the job we do is the chance to work with lots of different types of people who work in lots of different types of industries in lots of different types of ways. No one is quite like anyone else, even those who work in similar areas.

Even with all these differences, what we do is fulfilling when we can help those other businesses reach their goals. For even though there are many ways to get there, we all are aiming toward similar endpoints.

The concept of these different ways to work came up last week due to the Memorial Day holiday. For, just like every three-day weekend, the idea comes up of how it would be great to always have a four-day work week. The Atlantic covered the idea in a rather in-depth article last year, with views both in favor of and against the shortened work week.

Then again, if you want only the rosy view of working fewer days, you should instead read this more biased piece on inc.com. If even that is not enough, take a look at a San Diego Company that stands by five-hour work days.

The jokes almost write themselves when it is a beachside paddle board company that is embracing less work hours as a company tenet. But if it works for them, and still allows the company to thrive, can anyone fault them for it?

Not every company could work like that, however. Some manufacturing work simply could not hold up to that schedule. Sure, it may be possible to buckle down and put in a lot of work on a paddle board during a five-hour shift, but if you are running a machine in a factory that takes a specific amount of time to turn out a product, a certain and definite amount of productivity is lost with working fewer hours.

Again, certain ways of work are better for different companies.

Another recent article, in fact, wrote of how uber-tycoon Warren Buffett controls his schedule by only setting up meetings one day in advance. It is another novel concept, ideally letting you pursue passions and ideas as they happen instead of forcing inspiration to wrap itself around meetings that may have been scheduled weeks in advance, seem less important and feel draining while attending them.

And sure, one can certainly appreciate the theory behind this, but the fact that Warren Buffett can do it has a lot to do with the fact that he is Warren Buffett.

When it comes to what we do in our company, well, we are not Warren Buffett and (unfortunate as it may be) do not work with anyone of his caliber. We do, however, work with many great people and businesses. They run the gamut from individuals who are successful through short bursts of intense work, to those who work hours that sound numerous and draining, but yet they love it.

Either way, I find that the most successful endeavors are carried out by those who love what they do. That passion and drive shows in the end product. Our passion and drive is to take care of some of the financial aspects for those companies, while they pursue the parts of business that excites them most. So if this is something we could help you with, please feel free to contact us. 

I know that tax season is over and no one really wants to think about taxes anymore. Trust us, we feel this more than most (although I am pretty sure that my blood-versus-caffeine levels finally returned to normal last week). Yet there is a need to speak of taxes and the IRS even here as we start the month of June.

It seems almost every week comes with a new scam warning from the IRS. One of the latest came around last week as the IRS advised of phony phone calls telling potential victims that they needed to pay a “Federal Student Tax,” a non-existent tax.

Scams often seem to target the elderly, but this one goes in the opposite direction. It makes sense, though, to target students and recent graduates, people who possibly haven’t filed an in-depth tax return and have limited knowledge of tax law.

One has to imagine that this dynamic is also behind another recent criminal trend, scammers claiming that people need to pay their back taxes via an iTunes gift card.

I think it is important for everyone to remind themselves of some signs of scams the IRS has posted. (Pay special attention to the first one, which should immediately raise your hackles if you receive a call from an apparent tax collector.) The agency will never:

·                   Call to demand immediate payment over the phone, nor will the agency call about taxes owed without first having mailed you a bill.

·                   Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.

·                   Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.

·                   Require you to use a specific payment method for your taxes, such as a prepaid debit card.

·                   Ask for credit or debit card numbers over the phone.

Also this week, I wanted to visit an article from inc.com that appeared last week and relates to many of the topics I wrote about in this space over the last month. First, it stresses how it is important to make employees feel like they have a stake in a company, and that one’s performance changes if that dynamic exists (remember Zappos?). The article makes a comparison between being a renter and a homeowner. You want your employees to feel invested in how the operation is operating and not just operate like they are only there for a short period of time.

The article also stresses the importance of having open books to achieve this dynamic (remember the increased access technology can provide?) The more that employees feel you are being open with them about numbers, ones that employees don’t always get to see, the more trust is built. Openness means that one does not always have to agree with every decision made by a business, but employees can at least feel that those acts are based on facts.

Unlike those who call you demanding tax payments of which you were never aware, which are never facts.