Go for the Real Tax Thing, Use an Enrolled Agent

The whole tax return landscape is changing. Big things are happening to protect the average taxpayer from shoddy tax return preparers.

Until 2011, there was no regulation of unlicensed tax return preparers. Any-body could wake up in the morning and decide to do taxes for money. At the same time, the government subjected Certified Public Accountants, Attorneys, Enrolled Agents, Enrolled Actuaries, Enrolled Retirement Plan Agents, and Appraisers to strict regulation via Circular 230. Licensed tax preparers could face severe penalties and lose their licenses for if convicted of certain kinds of crimes, if they did not file their taxes, if they gave marginal tax returns or gave bad advice. That has changed. Now the IRS will regulate all paid tax return preparers.

In 2010 the IRS began the process by requiring everyone who wanted to prepare tax returns in 2011 to get or renew their Preparer Tax Identification Number (PTIN). The government required even licensed professionals such as Certified Public Accountants, Attorneys, and Enrolled Agents to renew their PTIN. Licensed professionals will not have to prove their ability to prepare taxes again-they have already demonstrated competency. Furthermore, these licensed professionals have always been subject to continuing professional education requirements, not to mention staying current on their taxes & clear of the law.

Unlicensed tax return preparers must pass a test to prove their competency to prepare basic Form 1040s. If they pass the competency exam, the IRS will allow them to prepare more complex business returns, even though the IRS is not requiring them to prove competency there. No doubt, a few currently unlicensed preparers, who have renewed their PTINs, will not be able to demonstrate competency within the grace period, but still prepare taxes.

The competency exam is now available, therefore the IRS stopped issuing PTINs; the tax preparer wannabe must past the test before getting the PTIN. Once an unlicensed tax return preparer passes the test they will be able to use the designation Registered Tax Return Preparer (RTRP), and the IRS will allow them to prepare taxes.

Although, the competency test is now available, anyone who registered their PTIN before the test was available had three years to pass that exam. That means for the next couple of years, an individual taxpayer can still wind up pay-ing for slipshod tax return preparation and advice from an unscrupulous possibly felonious tax cheat. Yikes.

Enrolled Agents (EAs) are federally licensed tax practitioners who have passed stringent exams in the area of taxation. The federal government requires EAs to be knowledgeable in all areas of taxation: Personal taxes, business taxes, corporate taxes, payroll taxes, estate taxes, etc. as well as representing the taxpayer before the Internal Revenue Service (IRS).

As Circular 230 practitioners, the IRS has also tested EAs on their ethical responsibilities and obligations per that document and EAs are familiar with the consequences of breaking the rules. In addition to passing the rigor-ous Special Enrollment Exam, the IRS requires EAs to take 24 hours per year of Continuing Professional Education (CPE) including 2 hours of ethics every year in order to retain their license. If an EA is a member of the National Association of Enrolled Agent, they are required to take 30 hours of CPE per year. Remember EAs work for you, not the IRS.

EAs have limited privilege in representing the taxpayer before the IRS, when dis-cussing civil (not criminal) matters that do not constitute tax return preparation. In short EAs are taxation specialists, who work to stay current in the area of taxation, who can prepare any kind of tax form, and can represent the taxpayer at all levels of the IRS, whether they prepared a given tax return or not.

In contrast, when the Registered Tax Return Preparer (RTRP) passes their test, which will be a far less difficult exam than the Special Enrollment Exam, and gains their designation, the IRS will only require them to take 15 hours of CPE per year. RTRPs will have no privilege with their clients with respect to matters before the IRS because tax return preparation is not a covered privilege under Circular 230.

If you pay someone to do your taxes, make sure they sign on the tax preparer line and give a PTIN. Moreover, if you need help with your taxes or tax advice, as long as it is not criminal matter, you really should go to the tax specialists; hire an Enrolled Agent. For a criminal matter, hire a lawyer first; let your attorney hire the Enrolled Agent.

Finally when there are RTRPs out there, do not expect EAs to add the designation to their alphabet soup, it is kind of like saying Jane Doe PhD, High School Graduate. Who would do that?

As always, small business services and taxation are our business. If you need help with taxes, or other services, Please give us a call. We would love to engage you as a client.

The usual disclaimers: Although the author has made every effort to insure the accuracy of Taxes, Tips and Tools, misinformation, disinformation, changes, mistakes, typos and hackers happen, therefore GetMeOutOfThisShoebox.com, Art & Business Consulting LLC, its employees, members and other associates, take no responsibility for any action taken or results based on the information supplied here in. The content of this article generally applies to business and individual taxation in the United States of America. Internal Revenue Service Circular 230 Disclosure: As provided for in Treasury regulations, advice (if any) relating to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, market-ing or recommending to another party any plan or arrangement address herein. The author currently does not have a certified public accountant, human resource specialist, certified financial planner or an attorney on staff; this information is purely for educational purposes and not to be construed as legal or financial advice. The author, its employees, members and other associates are not engaged to practice law; you always should discuss legal matters with your attorney before talking to anyone.

Making Money From Art & Literature – Online

Is it possible to make money from art & literature online?

If you’re an artist, do you know who’s developing and presenting contemporary art & literature?

If you’re a online cultural organisation, do you know who your key competitors are?

By looking at Alexa, Best of the Web, and other sites – as well as from our own perspective – we’ve picked out five key sites bridging the gap between capitalism and contemporary art & design.

These are sites that use socialised internet tools like tagging, comments, and blogging; sites that are wholly or predominantly based around the development and publication of contemporary art and literature; and sites that are developing and presenting new work. Above all these are sites that are making a living either directly or tangentially through their activities.

We Make Money Not Art

The name says it all – headed by Régine Debatty, this blog started in 2004 to investigate ‘how often companies that develop and manufacture technologies actually meet the hackers and artists who have a more playful or activist approach to them. Do these two different worlds collide? If yes, how does it happen? If no, why not? Would it make any sense to try to change that non-communicative situation?’.

One of the most linked-to blogs, with an Alexa rating of 34,431, over 30% of its audience in the US and a regularly updated list of contributors, the site doesn’t actually generate revenues as a direct result of its advertising but rather via Debatty’s fees from writing and speaking.

Ad!dict

Based in Belgium, members collaborate on themed projects & share work via online profiles. Divided into a number of different areas – the addictlab, for example, allowing more experimental interaction – there is tremendous potential here to get involved in a wide range of new projects, either based on the themes or through interaction with other users.

This is one site that has spread its net wide in terms of a business model, supplementing revenue from retail of books and magazines with cultural funding, contextual advertising and business partnerships. However, with a net presence that seems to have been around since before the first bubble, there’s no question that this is a powerful force.

Stereo Publication

This is one organisation that falls down more on the design side than the pure art side – an on and offline magazine, they make their money through retail sales and luxury editions of their high-quality magazine.

A little like We Make Money …, Stereo claim not to be making money out of this activity – they say they are a non-profit organisation who are setting out to design new ways of developing magazines that are more creative. By including an online work-in-progress section for developing new projects, the processes are more visible – a low Alexa score does nothing to harm the fortunes of the group, who continue to turn out new work on a timely basis.

Born Magazine

Born have been around forever, and provide consistently high-quality content as well as some offline events. Their focus is art and literature, leaning towards new media.

This is where we see a quite different model – Born is financed through sponsors and through donations. This is a more organic, cultural model – and again, shows that with low overheads it’s possible to have a long-running art and literature magazine.

Magwerk

Finally, having moved right to the other end of the spectrum from We Make Money …, Magwerk are as close as you can get to a traditional publisher. Publishing a suite of lifestyle magazines including art and design, fashion, and music, these magazines are published as if they were physical, employing the kind of page-turning design you can now get for free on Formatpixel.

It may no longer be innovative – but it’s certainly making money. With full-page adverts from high-quality luxury goods companies, solid business partnerships and sponsorship, Magwerk are definitely a force to be reckoned with.

Summary

We asked if it was possible to make money from art and literature online. These five organisations show that not only is it possible – they make it look easy!

Who Wants To Know About High Profit Low Cost Business Ideas?

Low cost business ideas are fun to find. Once you find your ideal idea you know you’re in for a quick turnaround of profit in your first year in some cases, and in others even on your first day of business!

Who wants to know about high profit low cost business ideas? We all do! I have chosen 5 core areas I believe are high potential businesses with a history of long-term sustainability, healthy growth and demand, and can be started with a low budget in many cases.

The 5 low cost business ideas I have chosen are in Jewelry, Arts & Crafts, Interior Designing, Manufacturer and Wholesale products, and SME Bookkeeping. Lets get started.

Jewelry Seller

Think you can run your very own dream jewelry business? We all know that our the love for gold and silver, and for precious stones like diamonds, rubies, and sapphires, is so age old this trade is going to last as long as there is romance on this planet of ours. You can bet your enchiladas the jewelry business is here to stay and to service that love!

While this business may sound expensive to run, you can start small by spending only a few hundred dollars in carefully selecting your merchandise at good wholesale prices.

I have a client who works for a telecommunication company who also runs a part-time jewelry business on the side. She buys pieces she adores and only from a couple of trusted gems and jewelry wholesale suppliers and on sells her merchandise to her clients. You can easily Google for these wholesalers in your local area.

Buy only from certified suppliers who can give you assurance you are buying the genuine article. Once you find reliable suppliers, stick with those. My client runs her business without a fixed shop by promoting her business to bridal shows and to expos that women and couples attend, women organizations, business owners, company executives, and at the local chamber of commerce. She does well. She also sells her more unique merchandise at high markups to other jewelry stores.

Make sure you buy pieces that have that ‘sellable’ factor, the ones that have classic designs at very competitive prices. Try to stay away from abstract designs when you start out, unless you want to specialize in certain types of looks and make.

If you are going to set up shop try checking out these ideal spots:

  • Shop in a busy mall
  • Busy city areas
  • Tourist hot spots and resorts
  • Uptown hotels
  • Your own online store
  • eBay
  • Bridal shows
  • High fashion zones

One great piece of advice she gave me was to make sure the collection you buy has an interesting mix of gems that are already set, gold and silver pieces, and an array of loose gem stones. You will need classy looking velvet boxes and pouches, and black velvet mats to place your merchandise to showcase to the customer.

One thing about this business is that it will never be without an audience of interested or potential buyers.

Interior Designer and Consultant

An interior designer usually ‘discovers’ his or her own unique decorating flair early in life. If you have a natural passion and talent for decorating and designing interiors, this might be a great business to let loose your designing skills and be paid well for it!

The reason why I feel this is potentially a very good business idea is from a recent personal experience I had. My wife and I hired a decorator and for around $400 she helped us with some needed renovation ideas. She came to our house and gave us the best 3 hours in home decorating tips and ideas. For us, it was well worth the money we spent which wasn’t that much in the scheme of things. In fact she’s been back several times to drop off a few more research she did on what we had asked her about. We got a new lease of inspiration for our home that we couldn’t have achieved ourselves and she got our life long recommendation.

By the way, we were referred to her when we were looking at color schemes at our local paint shop. So go and make sure you network at places that spins off from what you do such as the paint shop, the hardware store, the curtain place, the local real estate office and so on. You get the idea.

There will be so many situations and places that will require a service like this if you stop to think about it. Here are some you can start your list on:

  • Businesses with reception areas
  • Practices such as doctor’s waiting rooms
  • Private residences that are going through renovation
  • Government offices
  • Luxury boats and yachts
  • Commercial premises
  • Factory offices
  • Portables such as classrooms and temporary offices
  • Tired-looking business establishments
  • Businesses that have just moved in

It would help your business success greatly if you have evidence of experience, testimonials and perhaps a relevant qualification. A nice website would be advisable to showcase your work.

Arts & Crafts Market Business

Ah this is an evergreen. No matter how futuristic life gets we will always need the works of interesting arts, paintings, and hand-made crafts to bring that touch of life and joy into a place.

This is another lucrative business idea and it can be started with a few hundred dollars for products and material. By observing the constant announcements of art shows, craft fairs and market days held in streets, shop fronts, galleries and open car park spaces across the country and in every suburb you can tell this is one thriving industry.

If you are good at creating something that people have said they’d give you money for, the arts and craft business might be a business to consider seriously and get paid for what you love doing. If so, here are some things you can do to get a feel of the potential before you start out:

  • Check out a few arts and craft shows and markets yourself
  • Get a feel of how you might run your business
  • Investigate the various costs to hiring a booth or a stand
  • Factor in transport costs, packaging, and signage
  • Apply for a credit card machine
  • Get a permit if required
  • Call your local council and make some enquiries
  • Learn some good customer service techniques

If it is convenient to do so (I don’t see many operators do this) try to collect contact details of your customers to build a dedicated mailing list. This is going to come in handy to make your business hum with profitability.

By building a list you can offer your customers a periodical arts newsletter and use it to announce where and when your next show or stand will be at and the specials you are going to offer. The more you interact with your list, the stronger the loyalty you will earn. Your list will eventually be worth a lot of more money than you imagined. Start by collecting email addresses and or telephone numbers of your customers and from enquiries you get.

Do the above and pretty soon you will have more people than you can manage!

Independent Sales Rep For A Manufacturer/Wholesaler

This idea may sound like a job, but its not. Yes, there are sales reps that are employed by companies to represent them but there are many manufacturers and suppliers who prefer independent sales reps who can sell for them, all at a cut of the sales or for an agreed sum. This can be a quick-earn business that you can get up and running in no time.

You can source for products to sell by visiting trade expos, industry showings, to the manufacturers themselves. Choose the kind of products you want to sell. Do your research. Find out what the market wants. Use good old Google to find a good list of manufacturers and product suppliers you can contact. They would love to hear from you. If you can prove your ability and experience they would love to load you up with goodies.

You are not tied to a fixed schedule or territory, however this might depend of the needs and demands and the specific arrangements both parties agree on.

Try to start with products you can physically transport and showcase. Although this is not necessarily always the case with every manufacturer, sometimes you can sell large machineries and equipment that normally are just not possible to access or carry. Your customers are already used to seeing these ‘heavy’ products via brochures and video presentations.

As you can see, this is a business you can start as quickly as you find a supplier who will agree for you to rep for them. If you get a hold of a product that enjoys high demand you can be turning a profit on your first sale.

Your market is dual, you can sell direct to businesses or the end user retail consumer, depending on what you are selling.

Bookkeeping Services to SMEs

If you are meticulous about balancing the account, and numbers bring a smile to your face, then you were made for this business!

Ask anyone at a party or your local businesses, chances are that they will tell you that their accounts are in a mess or that they dread pulling out their financial statements to fix them. That’s where you come in!

Here are some of the key issues that businesses and business owners suffer from that make the bookkeeping service such an attractive proposition for the right person:

  • They are just too busy to do their books
  • They dread ‘doing the numbers’
  • They feel inadequate to do so
  • They are not happy with their current bookkeeper
  • They struggle with keeping up to date with the ever-changing accounting laws

Depending on the depth and breath of what you offer you can charge anywhere from around $20 to $70 an hour and packaged deals or fixed fees for more specialized preparation of financial and tax statements.

Here are some things to consider before you start:

  • Your qualification to be a bookkeeper
  • Public liability and professional indemnity insurances
  • Permits
  • An office or office area
  • Telephone to contact businesses
  • Stationary with letterhead and business cards
  • Computer and or laptop
  • Bookkeeping software program
  • Scanner and fax
  • Back up hard drive
  • Filing cabinets
  • Marketing budget to promote your business
  • An optional answering service

While its nice to hold a double degree in math, nowadays SME operators just want a good bookkeeper who can spot the numbers and provide accurate and great looking balanced monthly statements.

Most business owners and individuals require some kind of bookkeeping help and advice, and many can’t afford to keep a full time bookkeeper. The idea of an off-site on-demand bookkeeping service is great news for businesses and for individuals. It’s a boom industry for anyone who can deliver on-time accurate bookkeeping management.

In summary

I hope you’ve enjoyed my 5 low cost business ideas in Jewelry, Arts & Crafts, Interior Designing, Manufacturer and Wholesale products, and SME Bookkeeping. These were chosen for their potential to turn a profit quickly. However, its advisable that you seek guidance from a professional before embarking on any of the ideas listed here.

In closing let me list a few more low cost business ideas for you to investigate. I feel these have unique market potential and long term business growth:

  • Wellness & Diet Personal Instructor
  • Gift and Fruit Basket Business
  • Health Snacks Vending Machine Business
  • Resume and Covering Letter services
  • Residential and Commercial Cleaning Business
  • Beauty and Hair Supply Business
  • T-Shirt With Unusual Taglines business
  • Outdoor Furniture For Children Business
  • Garden and Organic Lawn Care Business
  • Band Promoter & Scout
  • Mobile Hairdresser Service
  • Private Home Tutoring Service

There’s nothing like finding your own low cost business idea that can turn a profit in your first year! Be independent.

Art & Craft Business Tips for Entrepreneurs

Today craft supplies are the heart of any arts and crafts business. Without supplies and good suppliers, your business will be in jeopardy. Search the right supplies at the right price and your business will have a much better chance of grow successfully.

Starting and running a craft business can sometimes be as confusing as it is rewarding. Here are 5 things to know before starting your venture into the world of professional crafting.

1. Shop Around

Always comparison-shop for supplies. Prices can vary greatly from vendor to vendor. Once you find a low-cost supplier, don’t stop there! Over time, prices do change. It’s a good idea to keep an eye out for another distributor.

2. Buy at Wholesale Cost

Many suppliers offer discounts to qualified buyers. Qualifications differ, but usually a Retail Tax ID number will suffice. Call your local courthouse to find out whom to contact to obtain a retail tax permit in your area. (If you are selling crafts, you should already have one.) Once you have your tax identification, ask individual suppliers if they offer wholesale discounts and how to qualify.

3. Buy in Quantity

Often, buying supplies in bulk can save money. When comparison-shopping for materials, ask each vendor if quantity discounts apply and if so, what the percentages off will be.

4. Use Recycled Materials

Be creative with your raw materials! You may be able to save quite a bit by using recycled wood, textiles, plastic, metal and anything else you may use. Of course all of your supplies cannot be obtained through recycled materials, but you might be surprised at where you can cut costs if you give it some thought.

5. Shop at Discount Stores

Many large chains offer comparable prices on certain craft supplies. If you intend to resell the finished product that you make and have a Tax ID number, you can avoid paying sales tax. Ask the store manager for details on tax exemption status.

Marketing is the another key ingredient to any successful business! You must have ways to get the word out about your products. Whether you will be attending craft shows, placing mail order ads, or selling your crafts online.

Selling crafts online involves more than simply publishing a Web site. Successful online marketing requires time, dedication and a basic understanding of marketing in general. Your online craft shop is merely an extension of your real-world business and all forms of marketing should compliment each other to work efficiently and effectively.

This article is not only intended to give craftspeople ideas on how to market an arts and crafts Web site, but also to help crafters become aware of the importance of real-world marketing of a cyber-world storefront.