What Is A Durable Power of Attorney For?

A durable power of attorney is used to give another person certain legal powers to manage your assets. It can give someone all powers to do everything you could do if you were able or it can give limited powers. Oftentimes we use a general power of attorney that gives someone complete power over our assets but it does not become effective until and unless we become incapacitated. This kind of power of attorney is part of your complete estate plan. See article below for definition of “incapacity.”

Even if you have a trust you will need a power of attorney to give someone control over basic things such as, changing your mailing address, transferring money from accounts that are not in your trust, talking to an institution regarding your affairs, like, the IRS, Social Security Administration, Veteran’s Administration, life insurance company, pension plan administrator, etc. Because of the privacy laws, if you don’t have the power of attorney for someone, like your parents, none of these institutions will divulge any information to you. Even your parents’ doctors cannot give you any information unless you have this document. This power is not always included in a medical power of attorney or “advance health care directive.”

Many times we see an elderly person, whose son or daughter helps with paying their bills and checking their bank balances. The son or daughter can do this because they sign on the bank account. But if they need to help with anything else not in the bank account they can’t. Many times the parent gets dementia or Alzheimer’s, becomes incapacitated and then it’s too late to have them sign a power of attorney form. At this point the child will have to go through the probate court process of getting a conservatorship for their parent, which takes many months and costs anywhere from $ 3,000 to $ 6,000. Again, with a little planning you can avoid this by getting a durable power of attorney now before your parent becomes incapacitated.

What Is a Durable Power of Attorney?

What Is a Durable Power of Attorney and How Does It Work?

A Durable Power of Attorney is a legal document giving certain powers to another person to act as your attorney in fact or as your agent with regards to your assets. That is, it enables the person you appoint to make decisions about your assets and liabilities and to sign documents, contracts, agreements, leases, etc. for you. The power of attorney is used like a trust, except you’re not dead. So when does it take effect and for how long does it last?

When does it take effect?

It takes effect and it ends when you say it does. You define the time limits and other terms in the document. Usually we use these powers of attorney for asset management to protect the family in case the creator (you) becomes disabled or incapacitated. That means you are not able to take care of your financial affairs. It can also mean that the creator, perhaps your parent, is not able to resist “undue influence.”

This can happen when an elderly person can’t say “No” when someone asks them for money. Or a caregiver or someone else may find out that your parent has some savings and uses their position as a friend to influence your parent to give them money. This is financial elder abuse. It happens more often than we want to admit. The scary part is that the county agencies in California that were helping to protect seniors against elder abuse have all been cut back and have let go most of their staff.

You may also use a power of attorney if you just don’t want to handle your affairs and want to appoint someone else to do it. The document usually includes terms providing that you will get your powers back if you regain capacity. So if you are temporarily ill and someone has to pay your bills for you, you will take back your powers when you recover.

Sometimes you want the power of attorney to take effect immediately even if you’re not a senior or disabled, such as, when you travel out of the country a lot. One of our clients who travels to South East Asia on a regular basis gave a power of attorney to her brother with whom she owns rental property. That way if anything happens while she’s gone her brother can handle it and sign any necessary documents to maintain the property.

What is Incapacity?

The document includes a definition of incapacity which you can tailor to your own needs. The standard definition is:

(1) The person is unable to provide properly for that person's own needs for physical health, food, clothing, or shelter; to manage substantially that person's own financial resources; or to resist fraud or undue influence.
(2) A medical doctor or psychiatrist, not related by blood or marriage to any trustee or beneficiary, examines the person and declares under penalty of perjury that the person is temporarily or permanently incapacitated, according to medical definitions.
(3) The person already has a conservator who has been appointed by the court.
(4) The court makes a finding that the person is either temporarily or permanently disabled.
However, you can define it any way you want by removing any of these items or adding some of your own.

When Does It End?

The power of attorney can end on a specified date, when the person regains capacity or under any other circumstance you describe in the document. Estate planning documents are to protect you and your family. So you decide what you want to include.

For more information call the Law Offices of Patricia Rowe at 925-256-1000 or go to our website at www.PatriciaRowe.com and sign up for our monthly newsletter. Or you can ask questions here in the comment section or email your questions to prowe@patriciarowe.com.

3 Reasons Why You Need a Trustee

1. To Take Care of Your Assets for Your Children- If you have minor children they will need someone to manage your assets for them. Even if you only have a house and a few investments, if both you & your spouse die in a car accident, say, your children will probably have to go live with someone else. In that case your house will have to be sold and the money will have to be reinvested in stocks, bonds, cd’s, etc.

Who will do that for them? You will need someone to deal with a real estate agent, sign a listing agreement, decide on a listing price, negotiate with buyers, sign the sales contract, perform all the tasks that a seller must do to complete a sale. So even if you have children who are no longer minors, would they be able to do all that? Probably not- many adults can’t do it. So if you haven’t appointed a trustee (by writing it in your trust document) the court will appoint a stranger to do it for your family.

After the house is sold the trustee will have to manage the investments of the trust to get the highest rate of return (income) possible while keeping the assets safe. That’s the main job of a trustee, to safeguard the assets for the beneficiaries of the trust (usually, the kids) and make distributions according to the trust document.


2. To Provide Flexibility in Making Decisions- If your children are young the trust will have to be managed for many years. Oftentimes parents will set up the trust to give discretion to the trustee regarding how much to distribute to each child each year, that is, the trustee decides. If children are young that would mean giving living expenses or a monthly allowance to the guardians of the children, the people who are taking care of them. If kids are going to college, they might need money to buy a car, for example. That would be an extra distribution that the trustee would have to decide on. Most trustees may give $ 12,000 to buy a used Honda but would not give $ 100,000 for a Lamborghini.

Even if your children are in their twenties, oftentimes, clients set up a time schedule for distributions of principal, that is, all of the assets that went from you or your estate to your trust. Usually if there are no problems with, say, drug or alcohol abuse, parents will write in their trust that the trustee should distribute one third of the principal when a child reaches age 25, one half when they reach age 30 and the balance when they reach age 35. This helps to give out the assets when the children become a little more mature. You must have a trust to do this.


3. To Give the Trustor (You) More Flexibility in Describing How To Distribute the Assets- You can also describe in your trust other reasons you would want your children to receive distributions, such as, for education. Your trust document can include a definition of education. You may not want to pay for basket weaving school but you may have a child or grandchild who you know will never go to college. However, if they were interested in a trade school, you would probably want the trustee to pay for that as well.

You can describe other things you would want your trust to pay for, such as, giving a child money to start or buy a business, or for the down payment on a house.

If you have a child who has a drug or alcohol abuse problem, you can provide that they must be clean and sober for one year subject to testing before they receive any distributions.


These are only three reasons to have a trust. There are many more. Stayed tuned for future blog postings! Or subscribe to our RSS feed. You can get more trust and tax tips from our monthly newsletter. Just subscribe below! Or you can always call us at the Law Offices of Patricia Rowe 925-256-1000. Or you can visit my website at www.PatriciaRowe.com

You Can Cancel Your RMD for 2009

The required minimum distributions (RMD’s) for IRA’s and certain retirement plans have been waived for 2009 according to the Worker, Retiree, and Employer Recovery Act of 2008. Generally, a required minimum distribution is the minimum annual amount that must be withdrawn from an IRA or an employer's pension plan beginning with the year the account owner reaches age 70 ½.

The 2008 law waives required minimum distributions for 2009 for IRA's and defined contribution plans (such as 401(k)s). If you have already taken distributions in 2009 these required minimum distributions can be rolled over into an IRA or another retirement plan.

IRS Notice 2009-82 provides relief for people who have already received a 2009 required minimum distribution this year. Individuals generally have until the later of Nov. 30, 2009, or 60 days after the date the distribution was received, to roll over the distribution.

Call us if you need help- Law Offices of Patricia Rowe 925-256-1000

7 Things To Do Before Year End To Reduce Taxes

Purchase equipment for your business- You can take a deduction of 50% of the cost of furniture, fixtures & equipment purchased & placed in service in your business before 12/31/09. Items of personal property that have a useful life of more than one year are supposed to be depreciated, that is, the deduction for the cost of the item is spread out over several years. Instead of depreciating it over 5 to 7 years which allows you a small deduction each year, you can deduct 50 % in 2009. Don't forget the item must be used in your business. This provision may disappear next year!

Cancel or Rollover Your RMD for 2009- You do not have to take the Required Minimum Distribution for 2009. If you have already taken it you can roll it over to an IRA by November 30, 2009. See tomorrow's post for details.

Start a Business- If you don’t have a business- start one! Even if you have a W-2 job, you can have a business on the side. It must be a valid business that you spend time on. Then you can deduct expenses related to that activity to offset wage income. See article next week for more information.

Charitable Donations- Yes, the age old idea of cleaning out your closets and donating to Goodwill before the end of the year. But now you must be able to prove the items were in “good” condition. Take pictures, keep detailed lists and get receipts.

Incorporate Your Business- If you are going to receive a lot of income before the end of the year think of incorporating and transferring the income to either a C corporation or an S corporation. Both have ways to save you taxes. Call us for help.

Pay Both Installments of Your Property Taxes In December- Remember the only way this will help is if your income is going to be lower next year than this year. If you have high income this year due to bonuses or commissions, pay all of the property tax and take the deduction on 2009. If your income will be the same or higher next year you will need the deduction next year.

Sell Property on an Installment Sale- If you are selling property that will close by the end of this year and if by chance you have a gain on it, think of using an installment sale. It can be under any terms you and the buyer agree upon. Just have the buyer pay you part of the funds next year, say, in January. Then it's considered an installment sale by the IRS and you report part of the gain next year. It's complicated though. Watch next week's postings for more information.

How to Use Your Corporation to Save Taxes

How to Use Your Corporation to Save Taxes

First of all the name of the game is to have the corporation pay for as much as it possibly can so you are using pre-tax dollars. That means just what it sounds like, you are using money that you haven’t paid tax on yet. The corporation takes in income then gets to deduct all business related expenses and pays tax only on what’s left over, net taxable income.

C Corporation

If you have a C corporation, then the corporation will pay the tax on the net income. If you can leave some of the money in the corporation (as opposed to taking it out in the form of wages to you) this will save taxes because the corporation pays only 15 % federal tax on the first $ 50,000 of taxable income.

If the corporation makes $ 93,300 and if you can leave $ 50,000 in the corporation you will pay 15 % tax on all of the income, that is, the combined tax between you and the corporation. Here’s how:

Corporation net income $ 93,300
Less: wages to you ( 43,300)

Net taxable income to corporation $ 50,000 taxed at 15 %

Wages to you $ 43,300
Less: standard deduction
& personal exemption ( 9,350)

Taxable income to you $ 33,950 taxed at 15 %

So you’ve paid 15 % tax on $ 93,300 of income!

Remember, if you or you and your spouse are the sole owner/employees of the corporation it doesn’t matter who is paying the taxes you or the corporation. It’s all coming out of your pocket. For example, when you pay yourself wages the corporation will pay the FICA Social Security and Medicare taxes by withholding 50 % from wages and paying 50 % itself. It’s still all coming out of your pocket because you own the corporation.

S Corporation

If you have an S corporation, then the net taxable income and certain other items, like interest income and capital gains, will be passed through to you to be reported on your individual tax returns. If you can leave some of the money in the corporation (as opposed to taking it out in the form of wages to you) this will save taxes because the net income from an S corporation is not subject to self employment tax.

This is the great advantage to using an S corporation instead of a sole proprietorship that reports its income on your 1040 Schedule C. All of the income on the Schedule C is subject to self employment tax. It’s a killer!

Now keep in mind, you are an employee of the corporation and you must pay yourself a “reasonable” wage for the services you perform for the corporation. This means it can’t be too high or too low. If you are the sole owner/employee then no wage is too high because all of the income was generated by your efforts. Under the same theory, if you don’t pay yourself all of the income in the form of wages, the IRS may say you didn’t pay enough.

If you do not take all of the income out in the form of wages you should be careful about taking other distributions. Although you are allowed to take distributions from an S corporation without paying tax on them, the IRS could recharacterize the distributions as wages and charge you payroll taxes on them.

These are just a few areas where you can save money by using a corporation. If you have any questions about your tax strategy call Law Offices of Patricia Rowe at 925-256-1000.

7 Tips To Reduce Corporate Taxes (Way After Year End)

The final extended due date for the 2008 corporate tax returns for calendar year corporations is September 15th. You finally looked at your profit and loss statement and it shows too much net taxable income. Your CPA says you’re going to owe a lot of tax, but you don’t know how you’re going to pay for it because your corporation doesn’t have any cash. You don’t know how the corporation could have ended up with net income because there’s no money in the bank.

What can you do now to reduce your corporation’s taxes now that you’re finally doing the returns?

1. Review Your Cash Expenditures- Go through your receipts (if you don’t have any- here’s the reason why you must save every receipt for anything spent during the year- start now!) pick out the ones for which you paid cash. Add the business-related expenses to the corporate books as “loan from shareholder.” That is debit expense, credit loan from shareholder.

2. Look Through Your Personal Checkbook- Look through your personal checkbook for any business-related expenses. Even if you don't have a receipt- you have a cancelled check or entry on your bank statement. (If you don't receive bank statements in the mail make sure you print out statements from online banking and keep them in your file for each month.) Add the business expenses you paid for the corporation to the corporate books as "loan from shareholder." That is, debit expense, credit loan from shareholder.

3. Review Your Credit Card Charges- Go through your credit card bills for your personal credit cards. (You should have a corporate credit card, but those expenses should already be recorded on the books.) Pick out any business-related expenditures and record them on the corporate books. Again, record as “loan from shareholder.” That is debit expense, credit loan from shareholder.

4. Think of Furniture or Equipment You Use in Your Business- Depreciation! Depreciation! Depreciation! Think of furniture or equipment you use for your business that is not recorded on the corporate books. If you have an office at home you have a desk, chair, computer, printer and maybe other equipment there that has never been recorded on the books. You have cell phones, iphones, cameras, camcorders, bookcases, shelving, storage boxes, file cabinets, etc. If anything can be remotely related to your business put it on the corporate books and depreciate it. It must be recorded at lower of cost or fair market value at the date you placed it in service, which is probably January 1.

5. Pay Yourself Rent for Storage or Office Space- You may be using parts of your house or garage for office or storage space for your business. You can have the corporation pay you the fair rental value of that space per month. Think what you would charge an unrelated party to rent such space. Even though you are way past the end of the corporate year, look to see if you have any outstanding loans you owe the corporation. An amount for rent can be transferred on the books from loan receivable shareholder to rent expense. Remember- you should have a written lease agreement between you and the corporation. In the current year start paying yourself monthly by writing checks from the corporation to you.

6. Pay Yourself A Year End Bonus- Again, you are way past the corporation's year end. But if you are desperate you can do this, although it's risky. If you have an outstanding loan receivable from shareholder you can pay yourself a year end bonus by recording an adjustment from loan receivable shareholder to officer salaries. The problem is you'll have to file amended payroll tax returns and this could cause you to be audited by federal or state taxing authorities. It's best if you have amounts that were paid to you by the corporation at the end of the year. You will still have to pay interest and penalties on the payroll taxes, but this may be worth it if you owe alot of corporate tax.

7. Pay Your Spouse for Outside Services- If you can say your spouse or children performed any kind of services for the corporation, such as, bookkeeping, telephone calls, sales meetings, interior decorating service, filing, modeling for advertisements or brochures, etc. pay him or her as an independent contractor. Again you'll have to have an outstanding loan receivable from shareholder balance. But this will avoid having to amend payroll tax returns. Again make the adjustment from the loan receivable shareholder account to the expense account.

If you are not sure how to do any of these adjustments yourself you can just list the items and give them to your CPA to make the adjustments. If your CPA doesn't know how or doesn't want to do these adjustments, or if you don't have a CPA- call Law Offices of Patricia Rowe at 925-256-1000. We can help! See our website at PatriciaRowe.com.

Estimated Tax Payments

Individuals:

There are two ways to pay your income taxes- through withholding, like on wages, or by making estimated tax payments. Estimated tax payments for individuals are due kind of quarterly on April 15th, June 15th, September 15th and January 15th of the following year.

If Your Income Is Less Than Last Year

The amount of estimated tax you are supposed to pay is 90 % of what you “estimate” you will owe for that year, say 2009. You compute how much you think you will owe, then divide by four and pay that amount. Just use your tax return software for last year and put in your numbers for this year. This is a good method to use if your income in 2009 is a lot less than that of 2008.

If Your Income Is the Same or Higher Than Last Year

But if your income is about the same or higher than last year you should use one of the “exceptions” to penalty for underpayment of estimated tax. That is, pay an amount equal to 100 % of prior year’s tax. (You can pay less but I don’t recommend it- it’s temporary and you never know what they’re going to do with the tax code.) Take the tax on your 2008 1040 line 61, divide by four and pay that each quarter. Then you’re covered- even if you owe $ 1 million on April 15, 2010 you won’t get a penalty. If your prior year’s tax was zero, then that’s all you have to pay for estimated- zero. But be careful, you’ll have to include form 2210 with your return to prove it.

Corporations:

The rules for estimated tax payments for corporations are a little bit different from those for individuals. For a calendar year corporation (one whose tax reporting year ends on December 31) the estimated tax payments are due on April 15th, June 15th, September 15th and December 15th of the current year.

So, use the same rules as above for individuals, i.e., estimate the corporation’s actual tax if income is less than prior year or pay an amount equal to 100 % of prior year’s tax if income is equal to or greater than the prior year.

Unfortunately the “exception” to penalty for underpayment of estimated tax that allows you to pay zero if prior year’s tax was zero is not available to corporations. Attach completed form 2220 to the corporate return to prove your exception.

Safeway vs. Walmart or Union vs. Non-union

I recently had a conversation with a cashier at our local Walmart. Ah yes, the store owned by the evil corporation where idealogues used to refuse to shop on principal but flock to now that their stock portfolios have been deflated by 50 %. Yes, that's the one.

Anyway, when I commented how much cheaper certain food items were at Walmart than at Safeway, the cashier scowled at me and told me how much more than Walmart Safeway paid their cashiers and other employees. I replied yes, that's because Safeway's workers were unionized (at least in California they are) and that if Walmart had to pay their employees union scale wages Walmart would go out of business because they would have to raise their prices and no one would shop there. We had a few more comments back and forth, then she said if any union organizers came on to Walmart property Walmart would have them arrested. Instead of saying "Good for Walmart! Aren't they smart!" I left the store.

This is typical employee mentality with a tablespoon of "poor me" and a cup of heartless management thrown in. Why can't people understand that's one reason why companies like GM are filing for bankruptcy? Because of the excessive union wage and benefits packages to which they were forced to commit.

In the San Francisco Bay Area one of the cities has sought to file for bankruptcy due to excessive wage and benefits contracts forced upon them by unionized firefighters. Why can't these employees have a minimal amount of foresight to realize obtaining high wages, pensions and, yes, health care, (oooh, there I've said the "H" word!) through collective bargaining does them no good if the organization for which they work can't make enough profit to support such amenities.

Americans are constantly complaining that jobs are being outsourced to other countries, but we've brought that on ourselves. Because we are a nation of consumers, we want what we want, we want it now, and we want it for the least amount of money possible. Granted it's only human nature to want to earn more money and spend the least amount possible on food, clothing and shelter. I get that, the basic human needs. But come on people! We're taking about iPhones, Wiis and Baby Phat here!

We don't need all this stuff! But we have Madison Avenue telling us we need it to be happy in a constant barrage from the media. So if we want it cheap, we're going to have to go to Walmart to get it. I just wish the boxes had some English on them so I could tell what was inside. But that's another story for another day.

Interesting Items of the Day

Cartoon: Blue Dog Fight http://bit.ly/DiHrD via @AddToAny- Way coooool!4 minutes ago from AddToAny

As Dennis Miller says re alleged "climate change" We're comparing temperatures now with those taken at time when people were using outhouses

AGW Stupidity: Vilsack Blames Trees Dying On Climate Change at http://bit.ly/3qTaEA16 minutes ago from web

Independents realize error of their ways in electng Obama-http://bit.ly/1iMU9about 2 hours ago from web

David Axlerod's former corp to gain millions from Obamacare- http://michellemalkin.com/

Not Just Another Town

Fred Everhart read the mail and felt sick. What would the kids do? Fred, head of the recreation commission, experienced what many American towns and committees felt - loss of funds.

Greenfield, Ohio, population 5000, just another town reliant on the auto industry. Five hundred jobs (70% of the town's industrial employment) would be gone by October 2009. In Willington, the nearest town, DHL Express announced it was pulling out, leaving another 8,000 employees without work. Due to the economic downturn, Greenfield lost fifty percent of the money budgeted to run the city.

The economy didn't factor in people like Fred Everhart. In January, 2009, Fred called a meeting. Twenty-five to thirty angry parents showed up. The anger and frustration prevented productivity. The parents understood their own hardship, but how could a city face the same?Fred, not to be beaten, called a second meeting. Nine people attended - The Gang of Nine. Together, they convinced the town to give them $5,000.00 of the $20,000.00 budgeted for little league baseball.

Greenfield had only one ballpark, which it could no longer afford to maintain. The "Gang of Nine" convinced the city to give the park to them. Fred posted an advertisement in the local paper a few weeks before opening day - Memorial Day - volunteers needed.

On that Saturday morning, Fred arrived at 9 A.M. Only two others waited. They looked out over the field. A small breeze picked up a piece of paper and sent it tumbling over the barren field. The grass was uncut. Holes surrounded the bases, dug into the dirt by last season's players. Water rimmed home plate. Fred looked at his two companions, "Looks like it's just us." He surveyed the field. "Where's the flag?" He frowned, "For that matter, where's the flag pole?""It blew down five years ago." One of his companions said. "They couldn't afford to replace it.""No matter," Fred said, "Let's get to work."

They pulled! their m owers, shovels, and rakes from their trucks and began to work. At 9:30 A.M. another truck pulled into the parking lot. Behind it, trailing dust, were more cars and trucks. They soon had fifty to sixty men, women and children working. The small army mowed the grass, painted dugouts, patched the fields and mended fences.

A local newspaper picked up their efforts and printed a story. The "Gang of Nine's" efforts symbolized the strength of community and was picked up by national media. Fred was overwhelmed with emails, letters, and donations from around the country. They came from Hawaii to Vermont. One lady called from Illinois. She'd lived through the depression and knew what it was like to go without. She didn't want the kids to do the same. A few days later, Fred received a check for $500.00 from her.

Baseballs arrived. Twenty-four dozen came in one delivery from New Orleans. Donations of equipment arrived from individuals and little leagues in Pennsylvania and Illinois. The league was featured on "Good Morning America". They received more equipment from the major baseball leagues, and the Cincinnati Reds invited the entire Greenfield league to see a game at "Great American Ballpark" in Cincinnati. Fred wasn't done. He spoke to members of the "Concerned Veterans of Greenfield". Their bylaws prohibited them donating money, but they donated a flagpole and a flag. Fred spoke to a stone mason, Jay Hardy, owner of Hardy Memorials. Fred wanted to do something in return to the veterans. Jay agreed to donate his work to those who fought then and now. Fred expected a small plaque, but one morning, Jay pulled into the parking lot with a section of marble three feet, by two feet, by two inches. The flagpole and monument where mounted in cement.

The league made concessions: only one new baseball per game; the scoreboard and lights remained dark; and restrooms were locked, replaced with portable toilets. Four hundred and fifty children, ages five through sixteen, ! signed u p to complete forty-seven teams. On opening day, Fred and his gang surveyed the field once again. Fred remembers one thing - sounds. He listened to the laughter of children, the crack of bats against balls, and above it all, the snapping of the flag blowing in the wind.

A call for silence - the national anthem played and the plaque was dedicated to the veterans. "Play ball!" The umpire yelled.

The season was on.On July 3, 2009, the last game was played. The last ball was struck. The last game of the season came to an end. The players, parents, coaches, and umpires left the field. The last breath of wind rolled a hotdog wrapper over the infield. The sun dropped below the horizon. The light of day faded. The stars and stripes gave a final wave in the dying wind. It hung limp against the pole - vigilant - waiting for another season. One could imagine the sound of a bugler playing, signaling the end of the day, the end of a season.

The economy caused problems around the globe, but in Greenfield, it was beaten - Greenfield, not just another town. Michael T. Smith

White House Email on Health Care Reform

Today I received the White House email forwarded to me by my Uncle George. Yes, the one the Whiter House is sending out to convince people that we want Obama’s health care reforms. I don't believe alot of this propaganda that the White House is sending out about the health care reforms. These things they are discussing in their email may be in the bill - however- they don't discuss the other things that are in there, such as the public option- that include fines for employers who don't provide health care insurance for their employees.

Employers don't provide it because they can't afford it! I know as a small business woman. So if you are forced to provide it or pay extra taxes, employers will of course choose the cheaper public option to provide the government plan to their employees. That's how they intend to get us all eventually onto the government plan so we can have Socialized Medicine.

You must realize that this will lead to a huge government bureaucracy that will develop to implement and grow the government plan. Let's all think about a government agency like the DMV running our medical care system. That's appealing.

Just look at Medicare. The bureaucracy that runs the Medicare system is fraught with fraud they cannot control, whereby the government pays out millions in false claims. The people who really need it are so overwhelmed with paperwork I have personally met people who have had to hire an outside company just to process their claims & do their paperwork. There are also many situations where coverage is denied and patients have to hire an attorney to force Medicare to pay for their treatment.

Why on earth would anyone want to create a bigger more inefficient government agency to run a health care system that would be a bigger more complicated version of Medicare? Another mismanaged federal government agency that is also running out of money?

And that doesn't address the lies the White House & Obama are telling about this plan not costing the government any more money & not increasing the deficit. That's an out and out lie. His own Government Accounting Office has said so. There's no way he can pay for this without raising taxes. Oh yes, I forgot, the employers are going to pay for it. Is that before or after they go out of business? You can't get blood from a turnip.

There are other reforms that could be done, such as, allowing insurance companies to sell insurance across state lines. That would engender competition and by the workings of a free market would lower prices. That's what this country is based on- free enterprise. That's why this country is the greatest country on earth and why we have become so prosperous.

Obama is a Socialist who believes in a redistribution of the wealth. He has said so many times. This is an obvious first step to making our country into a Socialist society like those in Europe. That's why people are so outraged about this health care plan. Perhaps alot of people who elected Obama want that. But many people don't.

You know this is Obama’s first step towards that goal of redistributing the wealth. That’s another goal of his he has stated many times. We all know “redistributing the wealth” means some people work hard and make money, then the government takes it and gives it to people who don’t work.

All you have to do is look at California to see what will happen to the country if these health care reforms are forced on us. It will go bankrupt in the face of the Democrats' feeble thinly veiled attempt to get the poor to reelect them. But there just aren't enough taxpayers to support all those people who are using our government resources such as, free health care. Again, just look at California. That’s what will happen to our country if this government health care system is put in place.

How can you think that Obama & the Democrats don't intend to make this into government run health care system? That's what he said he wanted to do in his campaign! That's what many in Congress have said they wanted for years. So to say that's not their intention is just another lie.

How To Get Started On Bookkeeping For Your Small Business

OK, you’ve started your business. You will have cash receipts, otherwise known as income (someday), and you already have cash disbursements or expenses. You need a system to keep track of all of your transactions- it’s called an accounting system.

Now we all know that it would be much better if you could just hire a bookkeeper to do all this accounting, but you’re just starting out and don’t feel you can afford to hire one. Besides, it’s hard to find a good bookkeeper. They are notorious for saying they can do more than they are capable of, then proceeding to make a mess of the books of the unsuspecting small business owner. So we’re going to have to struggle along without one for now.

Although it would be better if you could spend all of your time doing whatever it is you do best, you’re going to be doing the accounting until you can afford to hire a bookkeeper. Besides, you never want to put yourself or your business in the position that you are so dependent on another person to do your accounting, that you have no idea what they are doing. By taking responsibility from the start for your own accounting you will be in a better position in the future to review the work of others in a short period of time each week (or day) and know whether or not it was done properly.

Things to Buy:

There are a few things that you’ll have to buy to accomplish the setting up of your accounting system. You’ll need the most recent QuickBooks accounting program. Of course, you’ll need a computer to go with that. You must check the QuickBooks specification requirements for the computer system and make sure that your computer will meet the minimum specification requirements, such as, have enough ram memory, for example.

Yes, there are many other accounting programs out there. But QuickBooks is the easiest, most user friendly accounting software in existence today. QuickBooks also generates many different types of reports, which is the whole purpose of doing your bookkeeping- so you can generate accurate reports showing your financial situation and the history of your transactions. QuickBooks does have its problems- for example, it does not provide a good audit trail, that is, after you have recorded transactions, reconciled the bank account and even closed the books, you can always go back and change things. This is not good, because then you may not be able to trace the transaction (hence the lack of audit trail.) However, if you follow the procedures set out in this book and discipline yourself not to stray, you will not get in trouble. And don’t be cheap and try to save money by buying Quicken. Quicken is useless for businesses because it does not generate many of the reports you will need, like a balance sheet.

How To Save Money When Hiring a Lawyer

Alot of people are afraid to even call an attorney because they think it will cost too much money. I'm an attorney and I'm afraid to hire an attorney. But there are some things you can do to make sure you don't get ripped off or over-charged.

1. Get a Referral- Ask someone you trust if they can refer you to the type of attorney you need. Either a friend or someone who works with attorneys on a regular basis, like a financial advisor, certified public accountant or banker.

2. Interview at Least Two Attorneys- Find at least two attorneys who will tell you about themselves, their practice and the type of work they do. Make it clear when you call that you are interviewing to choose an attorney, that you are not asking for information about your case or legal issues, and confirm that there will be no charge for the call.

3. Ask If They Give A Free Initial Consultation- Many attorneys give a free half-hour initial consultation. Ask for it. Sometimes the attorney will talk about your legal issue for one half hour or an hour and will credit it towards your job if you hire them. Example: talk for 30 to 45 minutes about your estate planning, then just pay the flat fee for the estate plan if you hire them. If you don't hire them you pay for the 30 to 45 minutes at the attorney's hourly rate.

4. Ask For A Flat Fee- Many kinds of legal jobs can be done for a flat fee, that is, not at an hourly rate. Things like incorporating your business, creating estate planning documents, or writing a buy-sell agreement can be done for a pre-arranged amount. Even jobs that are normally billed based on a percentage of assets, like probate, can be done for an agreed upon amount.

5. Set A Time Limit- Even if the job is the type that is normally charged at an hourly rate you can limit the amount of time to be spent on your job. Just ask!

Virgin Voyage

Hi, everyone! This is our virgin voyage into the sea of taxes, business & estate planning strategies to help keep you afloat in these tumultuous waters of our current challenging economic environment! I am an optimist. I do not say we are in a "depression." I say we are in a period of a natural business cycle that entails slow growth & contraction for some businesses.

I agree with those who say it is the large organizations who are suffering- GM, Goldman Sachs, Washington Mutual, etc. and that it is the small businesses & entrepreneurs who will be exposed to great opportunities to fill in the gaps. Although we small businesses may not be in a position to manufacture automobiles, we will be able to pick up the slack in many service businesses such as, investment counseling, real estate brokerage and accounting and legal consulting, to name a few. Even small, local banks and credit unions that didn't get involved in the subprime mortgage industry are poised to take over for the Citibanks and Wachovias.

It's a shame that the news media spends so much time and energy fanning the flames of the depression mentality. I hear people all the time talking about how bad things are for the U.S. economy and how hard it is getting to "make it." Having been a CPA preparing tax returns for over 25 years, I have been through the recessions of the late 70's, early 80's and early 90's. There's a big difference between the recession now and then- in the early 80's interest rates were around 21 to 22%. That's a major advantage we have now with interest rates being so low.

I firmly believe that if we think "good economic times" and "act as if", we will pull ourselves and our neighbors out of this recession sooner rather than later. I am praying for our new President Obama and Congress that they make the right decisions regarding changes to the tax laws to give us long term recovery and get our businesses back on track.