Congratulations! You just won Powerball! Now get ready to pay taxes

Powerball

Powerball just paid out a record jackpot of over $550 million. Two lucky citizens from Missouri and Arizona will split the money. Despite the fact that winning so much money will change your life, it will also change your view of taxes.

Although these eye-popping figures probably make you dizzy, they are not quite as lavish when you consider the taxes that must be paid on these winnings.
Powerball winners can have their money paid to them in the form of an annuity or as a lump sum. The annuity would consist of 30 annual payments of a certain amount. The lump sum, in this case, would pay out about $360 million, or $180 million for two winners.

A federal tax on the lottery will take a 25% cut out of your winnings. Taking in such a large amount of money will also vault you into the top tax bracket – if you aren’t there already. Because of this, plan to save 10% of your winnings to cover these taxes as well. On top of these federal taxes, state taxes apply to lotto winnings. This means someone who wins Powerball in Missouri will likely have different tax obligations than a winner in Arizona.

In addition, lotto winners owe taxes on winnings in the year in which they claim their prize, not the year in which it is won. For instance, if you win the lotto in November 2012 but don’t claim your winnings until January 2013, taxes would be paid on the money via your tax return for 2013. States have different expiration deadlines on how long a winner can go to claim his or her money.

Winning hundreds of millions of dollars completely changes the life of a lotto winner. There is a long list of precautions you should take to protect your finances, your family, and your livelihood. One of these should be to bring an accountant on board. If you are looking for accounting assistance call 1-800-ACCOUNTANT.

Steve Jobs’s Tips for Hiring Your A-Team

1800Accountant helps businesses get their footing by providing affordable accounting services, tax preparation services and overall providing advice. Steve Jobs was a starting entrepreneur and had a start-up business plan like many do. This article portrays how he handled gaining the excellent team that Apple still has today.

By Jay Elliot

In his book, Leading Apple with Steve Jobs, author and former Apple senior vice president Jay Elliot details Jobs’s approach to motivating people, pursuing excellence and forming innovative teams. In this edited excerpt, Elliot, who was personally hired by Jobs, describes his former boss’s strategies for hiring A-list players.

For their book In the Company of Giants, authors Rama Dev Jager and Rafael Ortiz asked Steve Jobs about putting together a team. He told them, “When you’re in a startup, the first 10 people will determine whether the company succeeds or not.”

Want to recruit and hire highly talented innovators? Here are some Jobsian ideas for hiring:

Define the requirements but don’t be rigid.
At first glance, this point will sound painfully obvious. But too often, the person doing the hiring hasn’t given enough thought to defining the need precisely enough. You might be interviewing the perfect person and not realize it. Or the person in charge of filling the position might be looking for the wrong type of candidate. Worse, you run a high risk of hiring the wrong person.

Steve always had a very clear grasp of the need. Yet at the same time, he was not at all rigid about what qualifications he was looking for. Sometimes his choices surprised me, when he saw something in a candidate hardly anyone else would have seen — something that told him, “This is the right person for the job.”

That’s what happened with Susan Kare. At her high school in Pennsylvania, Susan had known Andy Hertzfeld, who would become one of the early Mac team members. Steve was captivated by the “graphical user interface” he had seen at Xerox’s Palo Alto Research Center, which used icons on the screen to make routine operations obvious and easy; you use such an icon every time you drag something to the trashcan symbol.

Who was going to dream up those icons, and the other parts of a pleasing and easy-to-use onscreen design? Andy suggested Susan, whom he knew had become an accomplished artist. Almost any other executive in those circumstances would not have agreed to let Susan come in for an interview: She was a creative artist who knew nothing about technology. She had “not qualified” written all over her.

But Steve saw in her a spark, the ability to catch on quickly and the kind of creativity that suggested she would be able to offer the kind of inventive contributions Steve was committed to having. He decided that Susan’s talent, passion and flair were more important than the fact that her background in technology was a big blank. He accepted her as a key part of the Mac team.

Don’t limit your search to the usual methods.
Steve’s accepting invitations to lecture to classes at Stanford University became part of his routine. The students considered it a rare privilege to be able to discuss real-life business problems with an entrepreneur whose start-up company was already in the forefront of the new industry of personal computers. But it was a two-way street. Steve felt inspired and energized by the students. And everywhere he went, he had his antennae up to find likely candidates for the Macintosh group.

To read the full article click here: Steve Jobs’s Tips for Hiring Your A-Team

The Changing Landscape of Online Sales and Cyber Monday

Cyber MondayFor years, shopping online has been a popular purchasing method, particularly for holiday shopping. The convenience of ordering an item online and having it sent right to your doorstep is usually well worth the added shipping and handling fees. Several years ago, online retailers got in on the Black Friday frenzy. Cyber Monday is now an annual tradition for e-commerce sites and shoppers alike as these retailers offer big savings on hot items. It falls on the Monday after Thanksgiving when people return to work and sit in front of their Internet-ready computers.

A major incentive of shopping online is that there is no sales tax on most items. This means buyers can save money by avoiding the sales tax rates that apply to each state. However, this loophole is gradually closing. The Marketplace Fairness Act, which was introduced in the U.S. Senate in November of 2011,  is a bill that would require an “alternate sales tax” in certain states on purchases made through the Internet.

In fact, some states have already changed their tax codes on this front. As of October, the state of Georgia’s 8% sales tax now applies to merchandise bought from online retailers that also maintain a brick-and-mortar location in the state. Even if there is no physical location and no sales tax applies at the time of purchase, Georgia taxpayers will still bear the brunt of the state sales tax when paying their income taxes. Other states with similar arrangements include California, Kansas, Kentucky, New York, North Dakota, Pennsylvania, Texas, and Washington state.

From the standpoint of small business owners that operate partly or exclusively online, Cyber Monday can be a very profitable day. There are more web-enabled devices than ever these days, making access to online stores even easier. As shoppers jump online and pull out their credit cards, it is a time these businesses could expect more traffic on their websites and, hopefully for their sake, more revenue. However, for brick-and-mortar small businesses that don’t have an online presence, it’s a disadvantage as individuals flock to their computers rather than physical store locations.

Start Saving Up for the Holidays Now

Holiday wreathIt’s never too early to start saving for the gift-giving season.

 

Holiday shopping can be extremely stressful. How often have you heard about people getting into physical altercations over items on sale at vastly reduced prices? If you start saving up for this shopping earlier in the year, you will have more money in your pocket, which means you’ll have a more pleasant shopping experience.

The best way to save up for the holidays is to plan a budget. Make a list of gift items, decorations, and food that you intend to purchase. Estimate how much money you will need if you plan on having a holiday party. Don’t forget to include travel expenses if you are going away to visit family and friends. You can then estimate how much each of these will cost. Cross off any unnecessary items to help you best plan your holiday savings.

 

It’s also a smart idea to shop early and spread out your spending. When you do this, you are less likely to use a credit card to buy a full shopping cart of gifts all at once. Taking your time will give you an opportunity to shop around for the best deals before all the good stuff is gone. Retailers offer discounts and specials throughout the year, so take advantage of them instead of waiting until the last minute.

 

Perhaps the best way to have more money later in the year is to set aside some funds during the year. You can do this by cutting out simple expenses from your weekly or monthly budget. Skip going out to eat once in a while and cook something at home. Meals at restaurants can take a huge bite out of your budget. Look out for coupons online or in the newspaper. Arrange your financial priorities so that you are spending your money on necessities instead of on impulse purchases. This also applies to gifts. Look for presents that are more useful.
In addition to being fiscally smart before the holidays arrive, there are also several items that are tax deductible that fall into the gift category. These include:

 

 

-       Gifts that do not exceed the annual exclusion for the calendar year (usually $13,000 per recipient)

 

-       Gifts to charitable organizations

 

-       Gifts to political organizations

 

-        Gifts given to one’s spouse

 

If you are looking for tax planning and accounting services to help you save money, contact Corporate Tax Network at 866-893-5730 or go to www.corporatetaxnetwork.com.

Small Business Saturday: A Day to Support Local Retailers

Small Business Saturday is Saturday, November 24.We all know about Black Friday and Cyber Monday – two of the biggest shopping days of the year. But small businesses have been left out from the ever-growing ads from corporate retailers. That is why Small Business Saturday was born.

Small Business Saturday is a newly designated shopping day that falls on the Saturday after Thanksgiving. On this day, shoppers are encouraged to shop at local, brick-and-mortar small businesses. This concept represents a distinct difference from consumers who flood big-box stores on Black Friday and click over to online retailers on Cyber Monday. The day first earned this name in 2010 when American Express promoted it through a TV and radio advertising campaign. The company also purchased advertising space on Facebook that it gave to its small merchant accountholders and offered rebates to new customers.

There have been other efforts to drive more consumers to small businesses. The 3/50 Project is an initiative designed to drive people to support small and independently owned retailers. More specifically, it encourages shoppers to spend $50 of their monthly budgets on items and services from local businesses they care about. The Twitter hashtag #SmallBusinessSaturday has also been used to promote the day and the patronization of small businesses on Saturdays throughout the year for weekend shoppers. In addition, local lawmakers have made official proclamations for Small Business Saturday.

With the economic downturn in recent years, small businesses have struggled. Many have closed their doors because national and regional retailers have moved in and taken away business from them. Because of this, there has been obvious concern about the survival of small businesses. Taking advantage of the busiest shopping periods of the year is a great way to promote mom-and-pop outlets and encourage people to buy from them more often.

On Small Business Saturday, local businesses may consider extending their hours and offering specials and discount cards to increase their return customers. Advertising is also important, and budgeting a larger amount of money for marketing campaigns specifically for this day could help small businesses get more customers in the door on this day and throughout the holiday shopping season. There is finally a day set aside to help small businesses, and it’s a no-brainer to use it to their full advantage.