Author: Debra Watkins

Federal Tax Deposits

On December 27, IRS sent Notice CP-247 to inform employers that required federal deposits may not be made with Forms 8109/8109-B as of January 1, 2011.   Taxpayers are advised to check with their financial institution to find out its cut-off date for accepting Federal Tax Deposit coupons.

Employers that are using a payroll service have already been depositing electronically through that service.   Others must navigate to https://www.eftps.gov/eftps/ to enroll in the Electronic Federal Tax Payment System.

This system is available to both business and individual taxpayers.  Be sure to set up a business account for payroll taxes and a personal account if you would like to use this method for 1040-ES (estimated tax) payments.

If you’re stuck and need to make a payment and your financial institution turns you away, you can take the payment to the IRS.  In Austin:  825 E. Rundberg Ln.  (IH35 and Rundberg)

Moolala: Ooo La La?

Moolala is the most recent opportunity that I have been offered that operates like Grupon or LivingSocial Deals.  Businesses offer reduced rates on services or goods;  I am offered the opportunity to purchase them.  Grupon offers me $10 if I refer friends.  From Grupon’s website:

We’re giving $10 in Groupon Bucks for every friend you refer when they make their first purchase. It’s our way of saying “thanks” for spreading the word and increasing our collective buying power! Groupon Bucks can be used toward any Groupon purchase, and they never expire.

LivingSocial offers my deal for free if I share my purchase and at least three people buy it:

Share for a Free Deal
After you buy the deal, you’ll get a unique link to share. If three people buy the deal using your link, then your deal is free.

Here’s Moolala’s pitch:

There’s more – we want to help you make money, too!
We will give you 2% back on each deal you buy. And for each friend you refer to Moolala, you will earn 2% of every deal they buy. And that’s not all: we’ll pay you 2% for each friend they refer, and again for your friends’ friends’ friends and your friends’ friends’ friends’ friends. It’s a 2% five-level reward system. That adds up to lots of rewards for you and your friends.
Use your rewards to buy the Moolala deals you love or even redeem them for cash. It’s up to you.
So start inviting friends and earning rewards now.

There’s more – we want to help you make money, too! We will give you 2% back on each deal you buy. And for each friend you refer to Moolala, you will earn 2% of every deal they buy. And that’s not all: we’ll pay you 2% for each friend they refer, and again for your friends’ friends’ friends and your friends’ friends’ friends’ friends. It’s a 2% five-level reward system. That adds up to lots of rewards for you and your friends.

Use your rewards to buy the Moolala deals you love or even redeem them for cash. It’s up to you.
So start inviting friends and earning rewards now.

Whenever I see “we’ll pay you based on your friends’ friends” ,  I immediately think,  “pyramid selling and chain letters.”  It appears Moolala is an Austin based business that was formed in 2010.  Here’s the LinkedIn reference. I joined Moolala to help  my missionary, traveler friend receive his 2% should I make a purchase.

My least favorite is the LivingSocial offer.  I’m not sure I know three people that would make the same purchases as I would make.  My choice is between the immediate $10 of Grupon or a potentional stream of 2% commissions of Moolala.  The Grupon offer seems more bird in the hand to me, so I would choose Grupon.  Except, what if all of my friends have already signed up?  Then I think that there’s “no soup for me.”

It will be interesting to see which company is most rewarded by the market place.

Those darn outstanding checks

On June 30 of each year, business owners in Texas need to determine whether they are holding abandoned property:  property for which they have had no contact with the owner for the applicable abandonment period and their whereabouts are unknown.

For most business owners the most common financial assets will be outstanding payroll, accounts payable, or refund checks.  For payroll checks, the abandonment period is one year.  For other checks the period is three years.

The reports are due November 1 and no extension of time to file is available.  Effective for the 2010 reporting cycle, which just ended, holders reporting to Texas are required to mail a notice in July to all owners of property over $250 that are due to be included in their November report.  Here is a sample letter:  Due Diligence Letter.

The Texas Comptroller is able to go back ten years to look for unreported unclaimed property.  Although the Comptroller is holding the property for the rightful owner,  the state wants to be the one holding the property rather than the business owner.   Although there is no legal limit to make a claim, the state can invest this money much as lenders use escrow funds to make money on your money.

Investigate outstanding checks and contact vendors or employees on a regular basis so that you will limit your exposure to the unclaimed property regulations.

Social Enterprise

NPR’s Karen Grigsby Bates interviewed Blake Mycoskie of the shoe company, Tom’s.  As Tony Sheldon of the Program on Social Enterprise at Yale School of Management says,  Mycoskie’s vision is a harbinger of the way many future entrepreneurs want to structure their own businesses.

Their careers can’t be only about financial returns, that the social return and the social impact is also integrated into that and they don’t want to just make a lot of money and then give a lot to charity, they want what they do with their lives to be in service of a broader vision.

Here’s the radio spot Soul Mates: Shoe Entrepreneur and here’s the article: Soul Mates.

My opinion is that social enterprises such as Tom’s will eventually out number non profit organizations.   And, fyi,  there is no Tom.  It’s short for tomorrow’s shoes.

Paying for Health Care

On December 31, 2010, many of the products currently eligible for reimbursement through Flexible Spending Accounts will no longer be covered unless your physician provides you with a prescription.    That’s important to note since you can get your physician to write a prescription for the expensive OTC drugs that you use, and you will be eligible for reimbursement.  You will need to send in your prescription with your receipts for reimbursement, and you will not be able to use an FSA debit card.  That may be a good thing since many of the those debit cards are a nightmare to use.

Here’s a handy list of qualified and nonqualified expenditures post 12/31

heb.com/fsa

The Joint Committee on Taxation estimates that this will generate revenue in excess of $5 billion in the first ten years.

Here’s  a website that you can use to calculate your share of the $5 billion: Save Flexible Spending Plans.

All the Devils are Here: The Hidden History of the Financial Crisis

John Stewart interviews the authors of  a new book about the subprime and derivatives-driven financial crisis.  Caveat:  Stewart manages to work in one f-bomb.  The authors claim that the bank regulators required state attorney generals to role back rules that regulated predatory lending and that Wall Street blames the whole mess on the stupid consumers that bought houses they couldn’t afford.  Ironically, we are being encouraged to both save and borrow to save the economy.

The Daily Show With Jon Stewart Mon – Thurs 11p / 10c
Exclusive – Bethany McLean & Joe Nocera Extended Interview<a>
www.thedailyshow.com
Daily Show Full Episodes Political Humor Rally to Restore Sanity

Will the Bush Tax Cuts be Reinstated?

The problem:  how to tackle the deficit.    Not extending the cuts immediately raises taxes on everyone.  Spending cuts are difficult since Medicare, Social Security, and Medicaid represent 50% of our budget by 2015 (  Peter Orzag ).  The other half of our budget is split 50/50 between interest payments on US debt and discretionary spending.  The discretionary spending is 50% defense and 50% non-defense.

Here’s an opportunity  for you to try your hand at balancing the budget.  Especially pay attention to the revenue options:  you’ll find many of the tax effects you may face in 2010.

Get a Pencil.  You’re Tackling the Deficit.

Tracking Travel & Entertainment

Capturing expenses on the road is important  for completing expense reports for your employer or for creating complete and accurate records for your federal tax return.

Credit network processors like Visa and MasterCard and banks have been developing new tools for corporate customers in anticipation of a rebound in business travel, reported Martha C. White  (NYTimes).

Concur Breeze was developed with American Express.  There is an app for all three smart phone platforms.  Take note small business:  the first two users are always free and the software integrates into Quickbooks.  Here are reviews.  To use the mobile app, you need to set up account at www.ConcurBreeze.com, then return to the app store with a mobile PIN.

Fyi, in fall of 2009, Intuit, the maker of Quicken, acquired Mint.com for personal finance and budgeting.  Free apps are available.    Searching for Quicken iPhone apps returns Quicken Online Mobile, but an iPhone  app store search does not return that app.  Mint has a blog that reviews financial apps.

So, Who’s Counting?

Researchers have tracked Tweets to see which part of the country is happy or if our mood changes during the week.  Here is evidence that retailers will use sales information to change the way merchandise in their stores is organized.  I think this is how Wal-Mart “realized” consumers were having stay-cations.

At the height of the recession in 2008, Wal-Mart Stores realized that consumers were “cocooning” — vacationing in their yards, eating more dinners at home, organizing family game nights. So it responded by grouping items in its stores that would turn any den into an at-home movie theater or transform a backyard into a slice of the Catskills. Wal-Mart wasn’t just selling barbecues and board games. It was selling experiences.

But Will It Make You Happy? By STEPHANIE ROSENBLOOM