Ron Piner, CPA asked:


The Adventures of the Amazing Ron and Tax guy: Clueless American!

The holiday season is here once again and two very hard working super heroes are busy with the task at hand. As another year comes to a close, our financial super heroes are engaged with tax planning for their clients.

Tax guy: my goodness Amazing Ron, I am grateful for the opportunity to serve those Americans that are up to speed with their financial matters.

Amazing Ron: Right you are Tax Guy. It is indeed a privilege. My hope is that more and more people, not just in America, become more involved in financial, business, and tax matters.

Just then, the phone rings. JC Minyon (Tax guy) answers the phone. It is Innocent Spouse and she is quite excited (as women are apt to get). She is frantic that her husband, Clueless American, is making a big financial mistake. Clueless owns a small business that he started at the beginning of the year. He has done zero financial and tax planning and Innocent Spouse is afraid of what consequences might face them.

Innocent Spouse: Oh help us mighty Tax guy! I am afraid that our financial and tax situation will be out of control!

Tax guy: Fear not dear lady. Do try to calm yourself as the Amazing Ron and I are on the way to look over your situation.

Tax guy changes into his blue uniform, red cape, with a white TG posted upon his chest, He flies to the rescue of our financially distressed couple. The Amazing Ron is clad dapperly (as always) in his black tuxedo with red bowtie and cumber bun. The Amazing Ron takes to his stretch limousine driven by Bob.
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Tax guy: (crashing through the window) I am here Innocent Spouse, Where is Clueless American?

Innocent Spouse: He is looking for his numbers oh great financial warrior.

Amazing Ron: (cool and collected entering calmly through the front door) Fear not dear lady, we will be able to provide you with practical advice you can put in motion immediately.

Clueless American: Oh great financial heroes! I am grateful for your attention to our situation. Innocent Spouse does get quite excited over many situations.

Amazing Ron: (in a chastising tone) I am sure this is true inattentive citizen. In this case however, she is right to raise concern. It is the duty of every American Citizen to understand at least the basics regarding financial matters. It is each American’s duty to ask questions when they are in need of help.

Tax guy: Well said Amazing. You are indeed a leader for all (Begins looking through the information that Clueless American has turned over).

Innocent Spouse: Oh thank you Amazing Ron. I will forever be in your debt.

Amazing Ron: (to Tax guy) what have you found oh loyal side kick and knower of all tax laws?

Tax guy: Clueless American’s business has netted $30,000 in profit for the year. He has not made any estimated tax payments He will owe both income tax and self-employment tax on this number unless… unless he purchases equipment before the year end.

Amazing Ron: (to Clueless American) how about this then? Is there a need for purchasing equipment?

Clueless American: Yes, I do in fact need some equipment and have already secured financing to make the purchase. The equipment will cost $35,000. Should I purchase it this year? I am expecting larger profits next year and will be in more need of deductions.

Tax guy: Based on the circumstances, it does make sense to put the equipment in service during the current year. Under Internal Revenue Code 179, a taxpayer can expense up to $250,000 of fixed assets placed in service during 2008 (returning to $125,000 after 2008). The 179 expense deduction can not be taken if there is a loss and it can not create a loss.

Amazing Ron: (to Innocent Spouse) to you have income dear lady?

Innocent Spouse: Yes, I have W-2 wages from my employer.

Tax guy: Excellent question Amazing Ron! We can then take 179 against the $30,000 in profit from Clueless American’s business, and can use Innocent Spouse’s income thus allowing us to take the entire equipment purchase into expense.

Amazing Ron: That’s right Tax guy. Not only will we eliminate the exposure to income tax from the business activity of Clueless, but we will eliminate the exposure to self-employment tax and even create an additional deduction against Innocent Spouse’s income. For the following year, when income is expected to be higher, Clueless American can implement a retirement plan best suited to meet the needs of his business. This will require keeping a watchful eye on the business and making plans through out the year.

Tax guy: We will not be able to eliminate all of the income for state purposes as Clueless’ state decouples from the federal provisions for 179 expensing. The difference will be immaterial and Clueless could make an estimated tax payment to the state by year end, in order to get a federal deduction. This is true because Clueless American and Innocent Spouse are not in the alternative minimum tax.

Amazing Ron: That’s right Tax guy. I am glad you are on my team.

Innocent Spouse: Thank you both for the excellent advice. You really saved us this time!

Clueless American: I will never ignore my financial situation again. I will do what ever I can to educate myself and I will indeed stay informed regarding my business’ activities.

Tax guy hugs Innocent Souse and Clueless American. He then flies back through the broken window reminding the couple they might be eligible to claim the broken window as a casualty and theft loss on their itemized deductions form.

Amazing Ron bows gracefully from the waste and exits gracefully to the front door and into his stretch limo.

Amazing Ron: (to Bob) another Clueless American is saved from a financial plight. Let us away to the office to ready ourselves for the next battle.

Ron Piner, CPA

Host of “Better Business”

Saturday Mornings at 10ET

On WBIS AM 1190

www.wbis1190.com

taxguy9@hotmail.com



REX

The CPA Affiliate Marketer

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Karel Viljoen asked:
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CPA, short for “cost per action” or “cost per acquisition” provides affiliate marketers another great way to make money on the internet. CPA affiliate programs pay a commission for each sale or other specified action you manage to effect. Unlike most affiliate marketing models, an affiliate need not necessarily bring in a sale in order to be paid a commission with a CPA program.

CPA ads are only paid for by the advertiser when a specific action occurs. This action can be someone making a purchase, visiting a certain page or many other possibilities. The advertiser decides what this action is. Google has built this into its Google AdSense program which has been huge with marketers of all stripes since it first hit the web in 2000.

Marketers have a saying: “I know that I am wasting half of my marketing budget, the problem is that I’m not sure which half that is!” How much does it cost to get a visitor to a website to perform an action? Traditional advertising methods make it hard to guess what this figure is. With CPA, you can stop guessing. Business owners, especially business owners whose businesses only exist in the virtual realm love CPA since they can know exactly how much each sale and each action costs them, helping them to effectively use their marketing budgets. You can express CPA in monetary terms, say your business got sales after 120 clicks. Your CPA would be 10 for these 12 sales.

For businesses selling a product or service costing $50 or more, CPA can be the very best way to go.

For affiliate marketers, CPA offers another great way to make some money online. You only have to sign up with a CPA network, such as Google AdWords to get CPA ads going on your site. You can then feature ads on your site, the type, size and number is up to you! Every time someone clicks on one of your CPA ads, you will receive a commission! You won’t get a king’s ransom per click, to be sure, but if your site gets a lot of visitors, these pennies can really add up quickly.

In order to maximize your CPA earnings, you need a lot of traffic. You can do this by frequently adding great content to your site which will attract readers and give you an ever expanding audience. Use links to your site in your signature when you post on forums and social networking sites and be sure to use SEO techniques when creating content for your site. This will keep your audience; and your CPA revenues growing.



VERN
Charles Francis Tan asked:
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Sources are very welcomed in your answers. Opinions are well-accepted. I want to prove: although accounting softwares are made to help in the accounting system, businesses should still employ accountants to ensure the quality and assurance of their financial statements. Thank you very much!

DARIUS
Matthew Bredel asked:


Trends come and go in affiliate marketing, but one trend that seems to be sticking around is the CPA Network. Also known as cost-per-action, pay-per-action and cost-per-acquisition, CPA is a proving to be more cost effective and reliable than many of the pay-per-click (PPC) campaigns that have monopolized affiliate marketing in the past.

The reason for the success and popularity of CPA Networks? It’s the fact that merchants and website owners do not have to pay for advertising unless it benefits their business in some way. Much different from pay-per-click campaigns in which the merchant pays for a click on a link whether it brings about a sale or productive site visit or not, CPA networks are based on performance marketing. This type of marketing means that merchants only pay the affiliate webmasters (also known as publishers) when a desired action takes place.

Desired actions or acquisitions may include a download from a website, a site registration, newsletter sign-up or a product purchase. Regardless of the action, the idea with CPA is that the merchant is seeing an actual benefit to his/her business. Unfortunately, this isn’t always the case with PPC campaigns, which is why too many Internet marketers experience PPC draining their bank accounts rather than filling them.

CPA networks provide an alternative to paying for ads upfront and are great options for marketers who are starting out with little funds to contribute to advertising efforts. It can be discouraging for a new Internet marketer to find that advertising expenses are more than profits. In fact, many new business owners give up when they experience this scenario. But with the performance-based marketing innate in CPA Networks, business owners can be certain that they only pay when they see real results.

In order to get involved in CPA, you will need to join a CPA Affiliate Marketing Network. These networks offer a way for you to benefit from CPA while having a middle-man (the network) doing the work for you. For example, the network serves as a liaison between merchants and affiliate webmasters, looking out for the best interests of each in order to achieve ultimate success with advertising efforts. By ensuring the right ads are placed on the right websites, the networks benefit both merchants and webmasters and make the relationship lucrative for each.

While there are many existing CPA networks online, it makes sense to be selective before you join a network. Learn as much as you can about the network, the businesses and websites that are network members as well as the network’s track record for success. Research, just like in any area of Internet marketing, really pays off when you are deciding the right CPA network for your business.

CPA networks are proving to be more than another Internet marketing fad. What’s more, they are nearly risk-free, as you only have to pay once your business has experienced results. This makes CPA networks one affiliate marketing trend to follow.



NORBERT
Demetrius Ghaskin asked:


The first certification we are going to look at is the Certified public accountant, also known as the CPA.  To earn a CPA certification in most states you must first earn a bachelor’s or master’s degree from an accredited college or university with a concentration in accounting. The next step is the dreaded CPA exam. Many people say that this is the hardest part of the whole CPA process. Lots of accountants have many sleepless nights preparing to take the CPA exam. The CPA exam has four parts to it. The first part is on financial accounting and reporting. Section is 4 hours with 3 multiple choice testlets and 2 simulation testlets. This section covers skills and knowledge of generally accepted accounting principals for business enterprises, not for profit organizations and governmental entities. The second part of the CPA exam is on Auditing and Attestation, and this section is 4.5 hours with 3 multiple choice testlets and 2 simulation testlets. This section covers knowledge of auditing procedures, generally accepted auditing standards and other standards related to attest engagements and the skills needed to apply that knowledge. The third part of the CPA exam is on Regulation, this section is 3 hours with 3 multiple choice testlets and 2 simulation testlets. This section focuses on skills and knowledge of federal taxation, ethics, professional and legal responsibilities and business law. The forth and final part of the CPA exam is on Business environment and concepts. This section of the test is 2.5 hours long with 3 multiple choice testlets. This section encompasses knowledge of the general business environment and business concepts that candidates needs to know for accounting. When you finally pass the CPA exam and start work as a CPA majority of your work will deal with financial accounting and auditing. So for the most part you will be preparing financial reports for firm for external parties such as investors, creditors, and tax authorities. The final requirement is you must have work experience in public accounting and supervised by an individual who is currently licensed to practice public accounting as a CPA. Getting your CPA can be very challenging but after receiving it can help you lead a very satisfying career in public accounting.

  

 The second certification we are going to look at is the Certified Management Accountant also known as the CMA. There are several requirements for the CMA certification. To qualify for the CMA you must first you must have a bachelor’s degree from an accredited university with a major in any area of curriculum or score in the 50th percentile the GMAT (Graduation Management Admission Test) or the GRE (Graduation Record Examination).  You must also have 2 years of continuous of professional experience in management accountant or financial management.  The last requirement you have to fulfill is passing the CMA exam. The CMA EXAM is known to be just as strenuous as the CPA exam. The CMA exam has four parts the first part is on Business Analysis, it is 3 hours with a 110 multiple choice questions. The second part is on Management Accounting and reporting this part is 4 hours with 140 multiple choice questions. The third part is on Strategic Management and is 3 with 110 multiple choice questions. The last part is on Business applications it 3 hours and has 3-7 written response essay problems. The first 3 parts of the test is all computerized and can be taken all year round and you will get your results immediately at the testing site. But the final part of the test can only be taken during the months of February, may, august and only after you have taken and passed the first 3 parts of the exam, And it takes 4-7 weeks to receive your results for the final part of the exam. After you pass your CMA exam and become A Certified Management accountant your job description will be supporting decision making, planning and control. As a management accountant you will be a valued business partner, directly supporting your organization goals. Becoming A CMA can be very hard but once accomplished you will have a plethora of different career opportunities to chose from.

As you can see both Certifications will take a lot of hard work to acquire. Both certifications are essentials tools for success in the accounting career field. If you receive either of these certifications you will be on the path of a great career in accounting.



DICK
elmina t asked:


I am writing a research paper on accounting. I know that tax season is crazy for accountants. How do they survive it (mentally and physically) ?

NICK