CPA Blog

CPA & Accounting Topics for Business

This Spring's Special Tax Tip... How to Deduct Having Fun!

Today is the start of the first day of the 2012 Shell Houston Open played at Redstone Golf Club. The "SHO" as it is referred to, is an annual PGA Tour event that raises millions of dollars for charities. It is held the week before The Masters golf tournament that is arguably the biggest golf tournament of them all. Thousands of golf fans attend the SHO but few of them know that their business can actually deduct 100% of the cost of the ticket on their tax return.

How can you do that when entertainment deduction is limited to 50% of the cost?

The SHO is what is referred to as a qualified charity event. A qualified charity event must be

  1.  A sporting event
  2.  Gives all its net proceeds to 501 (c) (3) charities
  3. And uses volunteers for substantially all the work performed in carrying out the event.
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The Dreaded Property Taxes

You hear it over and over again. Texas politicians entice employers to the state claiming we don't have a state income tax. Any experienced small business person knows this statement isn't completely true. All corporate entities have to file a state income tax return. But individuals don't pay any income tax in Texas. But we all pay the dreaded property tax.

Property tax rates vary from location to location. In the Houston area, property tax rates exceed 3% of the property value. That adds up really quickly when you consider they are taxing not only your land and buildings but your equipment, vehicles, machines, inventory, furniture and fixtures.

Different Types of Property for Businesses

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Today is March 6th...

From time to time I will branch away from the topic of tax and accounting and I will write about leadership and business management philosophies. This is one such letter.

I hope you are enjoying my newsletters. I write these to each of you as if you are sitting in front of me and we are having a conversation. I am writing to you, the small and mid size business owner who has poured your life into your business. I write to educate and challenge you to think and grow as a business leader and a person. Maybe I will have a positive impact on you and your business. I hope so, because I want each of you to be successful in whatever way you define success.


If you are enjoying this almost weekly newsletter, feel free to drop me an email about topics you would like me to cover. Tell me what you like about the newsletter. Even if you don't like something I write, let me know. I will respond to every email to the best of my ability and time. On to this weeks topic.

Today is March 6...

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Tax the Other Guy, Too!

Tax the Other Guy, Too!
Did you know that 46.9% of all people who file tax returns pay no taxes at all? Did you know that people who represent the top 10% of wage earners (adjusted gross income of $112,124) pay 70% of the taxes? Yes it is true. Almost ½ of all people who file...
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Democracy in America

The recent passage of The Middle Class Tax Relief and Job Creation Act of 2012 by Congress that was signed Wednesday of this week by President Obama reminded me of Alexis de Tocqueville's observations on our democracy.....

"The American Republic will endure, until politicians realize they can bribe the people with their own money."-Alexis de Tocqueville

Who is Alexis de Tocqueville?
Alexis de Tocqueville was a French politician and social scientist who toured the United States in 1831 observing our political system, religious practices and the workings of our economy. He published his views in a book titled
Democracy in America.... writings I studied while in college.

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1099-K... Another Reason to Keep Accurate Records

Most of you are familiar with Form 1099. As you know on your tax return, you always want to declare sales greater than your total 1099's received.

However, there is a new form in town.... the 1099-K and it doesn't play fair.

In 2008, President Bush signed into law a bill known as The Housing and Economic Recovery Act of 2008. Now businesses that accept credit and debit cards (or 3rd party networks, such as Paypal) when making sales to customers are receiving this form from their credit card processing company. The 1099-K reports the total gross payment transactions for the year........

So what does this mean to the small business owner?

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E-file Now Required by IRS

Tax season is beginning and there are lots of changes this year. Besides the normal "book" of tax law changes, the IRS has added more forms, more questions that must be answered on tax returns, more due diligence is expected by tax preparers and e-file is required if your tax return is prepared by a professional tax preparer authorized to prepare returns by the IRS. The IRS is not making our jobs easier as tax preparers. They are certainly not making the tax code more understandable and no one disputes that fact!

The change we all understand is the move towards e-filing which makes processing returns at the IRS much more efficient. But even the IRS can make that process a little bit complicated. This year virtually all paid tax preparers must electronically file federal income tax returns for individuals, trusts, and estates starting January 1, 2011. Like all requirements, there is a loop hole, but it takes another form to be filed to get out of e-filing your return. If you choose to not e-file your individual income tax return that we prepared you must sign a waiver form and send it to us. You also must attach this waiver with the paper return and send it to the IRS.

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Lessons From JoePa

Yesterday, Penn State's legendary football coach, Joe Paterno was laid to rest. He passed away on Sunday at the age of 85. Many of you may be aware of Joe because of the recent scandal that rocked Penn State and its football program costing Joe the job he held for almost 46 years. The scandal was the result of one man's alleged unspeakable acts with young boys at Penn State's football facilities, the failure of Joe's superiors to act more strongly on what he reported to them, and Joe's failure to "do more" when his superiors did not act in a stronger fashion.

Many stones have been cast at Joe by the large majority of commentators and writers in the sports media as well as bloggers and webmasters on the internet. He has been great fodder for lesser men who claim they would have done more than Joe all while hurling their stones of contempt and judgment from a safe distance. Joe has judged himself saying "I wish I had done more".

Today, I choose to take a different approach. I will not cast stones, but will look at his life time of success as head coach of Penn State's football program. JoePa taught more lessons to his football players, students, and coaches than any other football coach at a major university. Joe accomplished this feat because he believed he was more of an educator than a coach.

What Joe accomplished while at Penn State is no minor feat.....

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Change Your Life in 2012... continued

Change Your Life in 2012... continued
I hope you all have been enjoying your New Year's and sticking to those resolutions! Last week, I sent you an email containing 3 New Year's Resolutions that could have been applied to your daily life immediately and started you on your way to changing your life and your business in...
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Goodbye 2011, Hello 2012! - Houston Business CPA

Goodbye 2011, Hello 2012! - Houston Business CPA
It’s January again. Have you made your New Year’s resolutions yet? Maybe this is the year to forget the boring, routine promises you know you won’t keep, like going to the gym everyday and calling your parents once a week. Try resolving to be a more proactive business owner in 2012....
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IRS Wants Your Data File - Houston Business CPA

IRS Wants Your Data File - Houston Business CPA
Big brother is at it again. Over the past three years, the IRS has expanded its tools it can use to get more money from you. Recently, they increased the penalties upon preparers of tax returns the IRS deems to be inaccurate and now they are increasing the data gathering ability...
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