Musings of a Burbank CPA: How Understanding Assets vs. Expenses Can Make You Rich

  Assets and expenses both have a “debit” balance on the financial statements, but that’s where their similarities end.  Spending on one can make you rich and spending too much on the other can leave you broke.   An expense is money you may need to spend, but after a year, there is nothing lasting to show for it.  An asset is a tangible resource that is still worth something after a year or more and that belongs to you or your business.  The best assets grow in value over time, but some lose their value too.  Real estate typically goes up in value, while a car loses value, or depreciates heavily, in its first few years.   The best example of an asset versus an expense is spending on a mortgage versus rent.  When you pay a mortgage, you own more of the property than you did last month.  One day, you can sell your ownership in the property and get cash or another asset in trade.  When you pay rent, there’s nothing left at the end of the month.  There’s no accumulated value.   Generally speaking, spending on an asset builds or at least better preserves your wealth.  Spending on an [...]

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CPA Tax Musings: Navigating Nanny Taxes and Household Payroll Compliance

Time is precious for most of us these days, and often, we need help at home so we can have more time to run our businesses or careers.  That may mean hiring help for personal tasks such as caregiving for the young, elderly, or special needs family member.  When you first hire a household worker, there’s a whole different set of rules to follow compared to hiring for business. Underground Payroll There is a whole industry of “underground” payments made to domestic workers.  Individuals such as housekeepers, regardless if they live with you full time or work once a month, are wrongly paid as contractors, and often in cash, most of the time.  According to the IRS, in court case after court case, these workers should be paid as household employees, even if they are part-time.  Cracking Down One of the focus areas for the IRS is this area of household payroll.  The current and strong drive to bring this underground payment system to the light is caused by several new pieces of legislation.  A few states have recently passed a domestic workers bill of rights.  Changes in minimum wage and overtime requirements are going into effect in 2015.  And [...]

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General Musings of a Burbank CPA: How to Get Referrals from Friends

A lot of times it is hard to ask friends to refer business to you.  The friend is afraid of hard pressure sales tactics and you don’t want the friendship to suffer, so you don’t talk about it.  How do you break the ice and encourage friends to get you referrals?  See this article in AccountingWeb by Bryce Sanders for a three step way to get things started: http://www.accountingweb.com/article/how-get-referrals-friends/223930 The thing I like about this technique is it is low pressure and is just a conversation between friends.  It more or less is the start of a conversation and is just more of a note to friends to just mention your name when someone they know needs professional expertise.   For financial,  accounting and tax musings, You can count on us to count for you! Email: bstonercpa@sbcglobal.net  Phone: 818-317-6035  Website: www.briantstonercpa.com    Android and the IPhone:        Has been Featured On https://twitter.com/bstonercpa

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