sandeep asked:


CPA stands for cost-per-action. CPA essentially measures actions that are taken by the web site visitor that result in a purchase or an equivalent action such as signing up for a newsletter. An online marketer is relieved of some risk and is giving their advertisement investment a better value as this model places a lot of the responsibility of conversion to the publisher of the web site. Think of it in terms of earning commission. The goal of the online marketer is to compose a creative campaign that is capable of generating actionable leads and pays for each lead which results in some action being taken.

CPA is considered the optimal form of buying online advertising from a direct response advertiser’s point of view. An advertiser only pays for the ad when an action has occurred. An action can be a product being purchased, a form being filled, etc.Google has incorporated this model into their Google AdSense offering while eBay has recently announced a similar pricing called AdContext.

One potential benefit of a CPA model is a reduction in click fraud. Payments are based on a user clicking on an ad and then performing a specified action, such as generating a lead or purchasing a product. While not impossible to manipulate, that model is harder to game than one that pays publishers for clicks alone.

Typically, cost-per-action pricing, in which advertisers pay for leads, purchases or customer acquisition, has been the domain of affiliate marketing. Leaders in that industry include ValueClick’s Commission Junction network, Rakuten’s LinkShare and DoubleClick’s Performics. But at least one other search player, Snap.com, has been offering cost-per-action pricing for more than a year. Google’s entry into the market could threaten all of these players.
Benefits of Cost Per Action Pricing

Anyone involved in this industry knows that things aren’t simple or clear-cut in the world of online ad prices, where sites and advertisers are experimenting with a wide range of creative pricing options.

* We consider cost per action (CPA) pricing any formula that has advertisers paying not for viewership, but only for those viewers who do something upon seeing an ad.

* Advertisers often favor such pricing strategies because they pay only for measurable results. The problem for publishers is that they carry all the risk - if a poorly designed or badly targeted ad draws low activity levels, the publisher gets no revenue for those impressions served.

* CPA pricing can range from cost-per-click to cost for registration forms filled out, contests entered, questionnaires answered, or cost per ultimate product purchase. And this includes lots of other variables along a continuum of steps toward the sale.

Risks in Cost Per Action Pricing

* To counter the risk, most publishers charge much more for CPA arrangements, with the price going up as the action gets more demanding (and moves the customer closer to the sale.) So cost-per-click is higher than cost-per- impression. The cost for a completed registration form is many times higher, and the revenue share or cost-per-sale model is considerably higher still.

* What multiples make sense depends upon site performance, and the site’s visitors’ anticipated actions. The more a publisher knows about how regular visitors react to various calls to action, the better equipped they are to appropriately price CPA arrangements.

* CPA pricing is less clear to any supplier who recognizes that actual results are as dependent upon what the buyer brings to the transaction, as to what the seller supplies.



BOB

James Trippon asked:


Choosing the right tax CPA Houston preparer is one the most important financial decisions we make in our life. Although many people don’t often think about it, your income taxes are your largest lifetime expense, more than your home mortgage, your retirement contributions or your children’s college expenses.
As someone who has prepared over 10,000 Federal Tax returns, I know that controlling your income tax expense can make a tremendous difference in your financial well being. So let’s examine the types of tax preparers and how they work.

The most common type of tax preparer is the non-CPA who works for a national tax franchise. This type of preparer generally has no formal education in accounting and frequently has only a few weeks of training. Often they are retirees looking for a few weeks of extra income each spring. This type of tax preparer is not licensed to respond to IRS inquiries and generally has only a rudimentary understanding of the techniques used to reduce taxes. An unlicensed tax preparer should never accompany you to an IRS audit, and in fact this type of preparer would probably not be allowed by their employer to do so. The non-CPA tax preparer is in my opinion usually appropriate for only the simplest types of tax returns, such as an hourly worker that has household income of under $50,000 a year and that does not invest in stocks or itemize deductions.

A Tax CPA Houston is very different from the unlicensed tax preparer found in most franchised tax operations. The CPA normally has at least 5 years of college study in accounting, has passed a comprehensive technical examination. In most states a new CPA has to apprentice under an experienced CPA for 2 years before getting their license.

For any business tax return, or for an individual who itemizes deductions or makes investments, or for any situation where there is a dispute with the IRS or in which tax planning is required a licensed Houston tax CPA is a must.

Of course not all CPA’s operate the same. Some tax CPA’s only want to fill out the tax forms (the historians), and others are afraid of the IRS (the phobic’s).

The rarest type of tax preparer is pro-active and likes to search tax saving opportunities for the future while preparing your current year’s tax return. At Trippon & Company CPAs our goal is to be forward thinking enough to protect our clients now and in the future. Call us at 713-661-1040 and put our experience at work for you!



ASHLEY

JS646352 asked:


Deciding to become a Certified Public Accountant (CPA) is a huge step for college graduates looking to step into the accounting world. Being able to put on your resume that you are a Certified Public Accountant, will make your resume stand out above all of the others. Being a recent graduate, having CPA will give you credibility and will act as a “stamp of expertise” to the public eyes. Not only will being a CPA earn you more money, it will improve your credibility, as well as reflect your commitment to the accounting field.

 

Having CPA certification provides substantial financial awards for accountants. Accountants with this certification will be able to establish a standard of living to support themselves and their family. According to Robert Half International, the CPA can, on average, increase a candidates base salary by 10 percent. A lot of small, medium, and large public accounting firms will not promote their auditors past a certain level unless they have passed the CPA exam.

 

To obtain this certification there are six main steps that you have to follow. The first thing you will have to do is apply to take the exam. This step involves deciding what state you want to be certified in and checking to make sure you fit all of their qualifications, requesting an application, completing it, and then submitting it. This process can take from 6 weeks up to 8 weeks. The second step after your application has been accepted is to pay the examination fees. Fees vary for each state as well as qualifications . In Pennsylvania, there is a $95 application fee. The Auditing (AUD) section fee is $230.55, Business Environment (BEC) is $180.95, Financial Accounting and Reporting (FAR) is $218.15, and Regulation is $193.35. If you are taking an exam over you are obligated to the pay the application fee of $95 again whether you are taking one section over or all four. Third, after you have paid the CPA fees you will receive your notice to schedule in the mail.
 

The fourth step in obtaining your CPA is the most crucial. STUDY, STUDY and STUDY some more. The goal is to pass all four parts of the exam on the first try. Although this does not happen for most people, retaking the exam over and over again can become very costly. There are many different ways you can study for the CPA exam. The most talked about is the Becker CPA Review. Becker offers on line classes, live classes, cram sessions, and self study cd’s to work at your own pace. There are many other institutes that offer CPA review classes as well as many study books.

 

After you feel you are fully prepared to take on the CPA exam, the fifth step is then to schedule each section. All exams need to be scheduled at least 6 days in advance. It is advised that candidates schedule their exam at least 45 days in advance. The sixth step is to take the exams. Lastly you will sit in anticipation awaiting the arrival of your scores.

 

Overall, if you are extremely interested and committed to the accounting field, you should try and become a Certified Public Accountant. Not only will this title increase your salary, but it will also help you shine above other candidates when applying for jobs as well as provide a secure standard of living.



DENNY

Ron Piner, CPA asked:


Understanding Your Rental Property

Adding real estate to your portfolio can be a smart thing to do. Many do this by converting their first home into a rental when they can afford to acquire another principal residence. As I have discussed before, every portfolio should have 20% invested in the alpha rim (see “Do What the Hell I Tell You-Guide to Portfolio Building”). The alpha rim is the part of a portfolio that is not invested in stock market products. Therefore, it is not subject to market fluctuations and provides some risk protection to a given portfolio. When adding any new investment to our portfolio, we should take time to learn the basics so that we can make informed decisions over time. Adding real estate to a portfolio definitely requires an understanding of the fundamentals.

Let’s begin by taking our first town home. It was purchased right after we were married with the intent that we would one day live in a larger home. Because we were so good at saving, we did not need to sell the first home to get into the new place. We have made contributions to retirement plans and have savings on the outside of the retirement plans. The decision has been made to keep this town house and convert it to a rental property in order to begin investing in the alpha rim. It becomes necessary at this point to understand how a rental property works from its beginning, during its operation, and when a decision is made at the ending its existence in the portfolio.

Putting the Property in Service

If the property is being converted from personal use, as it is in this situation, we must take the lower of cost or market value in placing this property into service as a rental. If we purchased the home originally for $200,000 and its fair market value is $300,000 when we are ready to make the conversion, we will use the $200,000 original cost as our basis. If the fair market value was $150,000 at the conversion date, then this would become the basis for the rental property. Placing a property in service in this case means establishing how much will be available for depreciation and how much will be allocated to land. Let’s assume that $200,000 is our basis. We will need to allocate this basis to determine what can be depreciated and what must be land (not depreciated). I like to use the property bill assessment as it normally breaks down the property into what is building and what is land. After reviewing the property assessment, it is determined that 80% of the property’s value is building with the remaining 20% representing land value. This means that we will depreciate $160,000 over a 27.5 year life, or $5,818 per year. If we were to purchase this rental property as opposed to converting, our basis would be calculated based on cost plus settlement charges. Remember, each year that we take depreciation, we are reducing our tax basis in the property. This is important to know as we consider disposition of the property.

Operations of the Rental Property

As one might imagine, everything that relates to the property becomes a tax deduction. Mortgage interest, real estate taxes, repairs and maintenance, insurance, property management fees, and the like become ordinary and necessary expenses for the rental property. It should be noted here that the ideal situation is to have the rents charged to tenants equal not only debt service on the mortgage, but some built-in factor for repairs and upkeep. This of course, will be subject to fair market value rents in the neighborhood, but the goal should be to cover these expenses. In the event that the property operates at a loss, this loss will be able to offset other income on a tax return to the extent that adjusted gross income is $100,000 or less and the loss itself is not greater than $25,000. If adjusted gross income is $150,000 or more, the $25,000 loss limitation is reduced to zero which would make suspended any losses realized. Suspended losses are then carried forward to offset passive income in future years or to be recognized upon termination of the property. When starting a rental property, it is important to know the rules of the game as one might not get the tax benefits expected. If your adjusted gross income exceeds $150,000, you will not currently get any tax benefit from losses unless you have passive income from other sources. If you have a series of suspended loss carry-overs, you might consider adding a passive income generator to your portfolio (see my article, “The Most Complete Real Estate Article on the Internet”).

Disposition of the Rental Property

Now we are considering the disposition of our rental property. At the time, it is believed that we can get $400,000 for our investment. Do we have exposure to income taxes due to the gain of this property? Of course we do, don’t be silly. Let’s first calculate what our gain will be. We know our selling price, so we need to calculate our adjusted in the property. If the property has been depreciated for 10 years, our accumulated depreciation will be $58,180 ($5,818×10 years). This would bring a depreciable basis of $160,000 down to $101,820. We will add $40,000 to this for un-depreciated land basis bringing the adjusted basis up to $141,820. The gain exposure for this property is then calculated to be $258,180. This gain is section 1231 gain which will likely mean that it is long-term capital gain. However, this gain will have two tiers of tax. Because of the depreciation taken in prior years, the accumulated depreciation of $58,180 will have a 25% tax rate application. The balance of the gain, $200,000, will be taxed at the long-term capital gains rate of $15%. There is the potential to do a 1031 (like-kind) exchange on this property which would allow for the postponement of the gain providing that a property of greater or equal value is acquired. There is also the potential for netting the capital gain of this transaction with capital losses that might be in the portfolio. Does it make sense to sell outright or do a 1031 exchange? It depends on the facts and circumstances of this particular portfolio. If the alpha rim is well above the 20% mark, and with long-term capital gains at just 15%, it might make sense to just recognize the gain and pay the taxes (see my article on netting capital gains and losses). If we need to buy another property to maintain 20% in the alpha rim, the 1031 exchange could be the right solution. See what I mean when I say one must understand the fundamentals of owning real estate? My way is better.

Ron Piner, CPA

Host of “Better Business”

Saturday Mornings at 10ET

On WBIS AM 1190

www.wbis1190.com

www.mwibonline.com

taxguy9@hotmail.com



ROMEO

Stephen L. Nelson, CPA asked:


If you operate a small business, you know that you need a decent, working accounting system, right?

Decent accounting means you know things like whether or not you’re making money. And such a system lets you make better decisions about the products and services you sell and which customers and employees you want to work to keep.

Unfortunately, small business accounting isn’t always easy or straightforward. Accordingly, consider these five tips to simplify your business’s bookkeeping.

Tip #1: Don’t Incorporate

Incorporation complicates your accounting. By incorporating, for example, you’ll automatically add payroll accounting to your bookkeeping duties–even if you’re the only employee.

What’s more, by incorporating, you’ll typically have to provide more information when you do your tax return than is the case if you operate as a sole proprietorship. A corporation tax return is several pages long, for example, as compared to the typical one or two page sole proprietorship tax form.

If you want to incorporate for legal reasons, by the way, you should know that you have another option for limiting your liability. You can set up a one-owner limited liability company. A one-owner business operating as a limited liability company is treated for tax accounting purposes as a sole proprietorship.

Tip #2: Don’t Depreciate

If your business is profitable or if you or your spouse have earned income from wages and you’re operating as a sole proprietorship, you may be able to use something called the Section 179 election to avoid dealing with depreciation.

Rather than go to the bookkeeping burden of allocating a $500 desk as “depreciation” expense over seven years, for example, you can use the Section 179 election to just immediately write off the entire $500 furniture cost in the year you purchase and begin using the asset.

Not all states allow Section 179, so you’ll want to confer with your tax advisor. But by simply writing off asset purchases, you greatly simplify your accounting. You don’t, for example, find yourself a few years down the road doing the depreciation calculations for, say, several dozen or several hundred items you’ve purchased. Ugh.

Note: Most assets that a small business purchases can be immediately expensed using the Section 179 election. Some assets can’t, however, including real estate.

Tip #3: Don’t Combine Business and Personal Items

Another tip for keeping your business accounting simpler: Don’t combine business and personal items. For example, setup a separate bank account for the business and use that account only for business deposits and withdrawals.

Another example… Don’t go try to buy a car, call the purchase a business expense, and then attempt to deduct a portion of the car’s price and operating expenses.

A general rule about tax accounting: Any deduction that’s been abused by taxpayers in the past is probably closely watched by the IRS and the state revenue folks. And that close monitoring almost always means that in order to take the deduction you need to go to a bunch of extra bookkeeping work. That extra bookkeeping work not only costs you time and money, the extra work also tends to truly complicate your accounting.

With a car, for example, deducting some portion of your auto expenses will require you to carefully track all of your car expenses (fuel, service, insurance, and so on) and also your business, commuting, and personal use of the vehicle. Furthermore, whenever you trade-in your “business vehicle,” you or your accountant will also probably have to do the tax accounting for a like-kind exchange.

Seriously, small businesses commonly make the mistake of deducting items like cars only to find (if they’re honest with themselves) that after all the wailing and gnashing of teeth (and perhaps a bit of dishonesty, too) the deduction saves only an extra two to three hundred dollars.

Tip: Do keep track of any business miles so you can claim the easy standard business miles deduction. That deduction, for many businesses, is an easy tax deduction.

Tip #4: Do Consider Using Cash-basis Accounting

Tax laws don’t allow all businesses to use cash-basis accounting. For example, if your business resells inventory or manufactures items, you probably can’t use cash-basis accounting.

However, service businesses typically can use cash-basis accounting. And cash-basis accounting, while a little frowned upon by accountants, should always been considered if the resulting accounting lets you prudently run your business.

Cash basis accounting simplifies your accounting because you don’t have to setup and then work with an accounts payable system. And because you don’t have to do accrual journal entries at the end of each month and year.

Note: The popular small business accounting program QuickBooks lets you do both cash-basis accounting and accrual-basis accounting.

Tip #5: Do Consider Outsourcing

A final quick tip that’s especially applicable once you have employees: You should consider outsourcing your accounting, or some part of your accounting, once you’ve got employees or too little time to do the job yourself.

And this outsourcing option is actually very simple, straightforward, and even economical as compared to the options of letting your books turn into a mess or hiring a modestly competent full-time bookkeeper.

You can typically pay a service bureau a couple of thousand dollars a year, for example, to do your payroll. And a few hundred dollars a month is often enough to pay for a general bookkeeping service.



DONALD

Maxood asked:


Wonder what makes accountants indispensable for business concerns despite there are so many softwares these days for preparing financial statements. Wonder what are their tasks besides preparing statements in:
1. Sole Proprietorship concerns
2. Partnership concerns
3. Joint Stock Companies
Please answer in detail.

TRISTAN

? Sola ? asked:


With this economy, what is the future like for accountants? I may be studying accounting in college this fall and will be graduating 2013. I know the future doesnt look too promising for accountants but how bad is it right now? and how hard do you think it might be to find a job in the future?

PIERRE

macroscope asked:


And what does the charge depend on? I’m married with no house or kids, but high income and medical expenses.

ERNEST

Kyel asked:


How much will accountants be affected in the amount of work that comes their way based on economic down turn?

MARION

Chad Brubaker asked:


 

If you’re looking for a custom designed CPA and accounting website, here are some things you should consider. Done right, your website will be an effective marketing tool, improving your company’s bottom line. These pointers will improve your site, turning visitors into clients and providing valuable services to your existing clients.

1. Your website is for professionals – while its content shouldn’t be dry, it also shouldn’t be too flowery. It should speak to your target audience (those requiring accounting services), and it should explain why your services are best for them.

2. Respect your visitor’s time by making the information they need easy to find - in addition to being attractive, your site should be user-friendly and easy to navigate. Make sure that the team you hire has competent designers, as well as a skilled technical department.

3. Your website should be more than an online business card. Position yourself as an authority with compelling content and tools - tax calculators, FAQs, and financial guides demonstrate that you have the practical knowledge to help your clients achieve their financial goals.

4. Enhance the value of your website with tools for your clients – for example, a file transfer system that allows them to easily and securely exchange sensitive files with your firm. In addition to saving you time by making transfer of large files easier, a secure system like this will build your client’s trust in you by demonstrating that you value their privacy.

5. A monthly newsletter is an easy way to build loyalty and stay in touch with your client base. Many website designers include automatic monthly newsletters – take advantage of this feature to keep clients up-to-date on the latest tax laws and information.

6. Make yourself accessible to your clients – contact information should be prominently displayed on your site. Ensure that the contact info you post is up to date, and provide easy ways for clients to request appointments and information with contact forms on your website.

Following the rules above will result in happy and satisfied clients and an ever-growing client base.

 



DANIEL