Tips

Firing an employee is never a pleasant task. No matter what the history is, it’s challenging to make sure you’re firing the employee the right way. Doing so will help to ensure that there is no aftermath to the firing beyond the need to replace that employee. The U.S. Chamber of Commerce has established guidelines as to the legal way to fire an employee, but there are also personal concerns about letting an employee go that need to be considered. Firing an employee the right way will address all the different aspects. 

Aspects of Firing an Employee

Arguably, the most important aspect of firing an employee is the legal aspect. You don’t want to be blamed or even sued for acting in a manner that is out of compliance with state and federal regulations. For that, you can rely on online guidelines. 

Another aspect of firing an employee is security and safety. You want the interaction to go as smoothly as possible without creating a scene. Leave the dramatic, blustery, “You’re fired!” antics to the movie industry. After the interaction, you don’t want the employee coming back to the premises to seek revenge, either. 

A third aspect of firing an employee is even more personal and has to do with your responsibility as an employer for the livelihood of another person. It doesn’t feel good to send a person home abruptly with no way to put food on the table or pay their rent, no matter whose “fault” it is. Even if that employee was caught stealing, your heart may go out to their family members who have to suffer on account of it.

Addressing the Legal Aspects of Firing Someone

Staying in compliance when you fire someone is easier when you put a contract in place when you hire them. The hiring contract should include one or more clauses that deal with the firing process. This is the best way to protect yourself and your company from a wrongful termination lawsuit. And, even if the employee files a suit anyway, they’re not likely to win if you’ve followed the terms of your own hiring contract. 

Employee manuals are another document that protect employers as well as employees. When an employee is performing sub-par, you can reference the employee manual for proof of expectations. This is also valuable for use during the actual firing interaction. It enables you as the employer to direct attention to specific breaches of the employee manual. 

Most states in the U.S. have a stipulation that employees are hired “at-will.” This means that, technically, an employer has a right to fire at-will, for any reason, at any time. However, note that an employment contract trumps the at-will basis.

To protect against wrongful termination claims, such as discrimination, pregnancy, or supposedly unwarranted accusations, you should ensure that you have just cause for termination. Just cause would include items that are in direct violation of the employment contract. Note that it’s illegal to fire a person for something if they have a public right to behave as they did. 

Legally, the U.S. Chamber of Commerce recommends taking these important steps for firing a person:

1. Review the employee manual for the correct firing process and follow it to the letter.

2. Record violations. Keep employee records and note dates and times of “fireable offenses.” 

3. Gather evidence to support your decision. The more proof you have that you are in the right to fire a person, the better protection you have. 

4. Provide benefit information. Employers are required to educate terminated workers about their benefits, including how to get their final paycheck, COBRA, unemployment agency alternatives, and the transfer of any relevant insurance policies or retirement accounts. 

Addressing the Safety and Security Aspects of Firing Someone

When you fire a person, you need to ensure there won’t be negative backlash. This requires pre-planning on your part. To make the transition as smooth as possible, have the entire process planned out. Consider:

• Retaining employee key cards, id cards, keys, membership cards, etc. in the firing interview, before the former employee leaves your office. 

• Having security escort the employee while they clean out their desk/cubicle/office.

• Acquiring a list of passwords used by the employee and having your IT department remove/change those passwords before the employee leaves the firing interview. 

• Retaining any files on laptops used by the employee that have previously left the office. 

• Retaining any company-owned mobile devices, such as phones, laptops, tablets, etc.

• Distributing a memo to the rest of the staff that the employee has been terminated and is not to be granted any access to company information/files, etc. 

Finally, and most importantly, the firing interview should not be done in an overly negative manner. Remain as calm and objective as possible in the circumstances. Remember, the person is getting fired; they don’t need a lecture from you on top of it. They already feel bad. Just keep it completely professional. It’s often helpful to write down a few key phrases and repeat them if the employee asks questions that you can’t answer, for instance, if they keep pleading not to be fired. 

Addressing the Personal Aspects of Firing Someone

Unless the employee has been a super disappointment, it usually feels terrible to fire someone. But right now, you need to make the conversation about them, not about you. It’s fine to express your feelings that you wish things had gone differently. But it’s better to ask if they understand what is happening. It’s also better to ask if they understand how to apply for unemployment, or how to get access to their remaining benefits.  

You can help someone who you’ve just hired by supplying them with as much information as you can for them to get by until they find another job. 

Lastly, make sure if you fire someone from your company that you let your CPA know before your next tax filing.

Like many people, you may be facing credit card bills that have overwhelmed you, medical bills that are simply too high to pay, or other debt that continues to accumulate. Unfortunately, when unpaid debt accumulates long enough, creditors may take the step of suing you in an attempt to collect their money. When this occurs, don't panic. Instead, consult with your CPA and keep the following things in mind.

Lawsuits are Common

As more people have found themselves heavily in debt, remember that you are not the only person in the world being sued by a creditor. In fact, it happens quite frequently, with almost half of all civil judgements being linked to unpaid debts. Once a creditor decides to sue you, they will file a complaint in a state civil court, then notify you of the lawsuit by sending you a copy of the complaint or court summons. Many times, these will come from a collection agency or law firm, which can be intimidating. If you receive such a notice, show it to your CPA and discuss your various options.

Default Judgements

In many of these situations, the people being sued never show up for their court hearing. As a result, the judge will deliver a default judgment in favor of the creditor. If this happens, the creditor will then have the legal authority to place a lien against your property, garnish your wages, and possibly freeze your bank account in an effort to collect.

Not the Original Creditor

By the time you are actually being sued for bad debt, the debt itself is more than a few years old. Actually, the creditor who is suing you is probably not even the original creditor, since it is common for old debts to be sold multiple times over along the way. In many instances, even if the statute of limitations has expired for a debt, some creditors may attempt to revive the debt, hoping you'll be intimidated enough to hand them some money. This is a violation of your consumer rights, meaning it is no longer legal for you to be sued. However, the old debt will continue to damage your credit.

Gather Your Information

Once you know you are being sued, start gathering pertinent information related to the debt in question. Along with the letter you received from the debt collector, closely examine your own records about the debt. Since old debts find their way into the hands of many collection agencies and others, mistakes are common. Thus, you may find you have already paid the debt, or it was a debt you never incurred. Since you usually have 30 days to respond to the creditor, review your records and meet with your CPA as soon as possible.

Respond or Ignore the Lawsuit?

Generally, it is always better if you respond to the lawsuit against you, even if you know the statute of limitations has expired or that the whole thing is one big mistake. By ignoring the lawsuit, you will lose your ability to dispute the debt, plus put your property, bank account, and wages at risk. Along with meeting with your CPA, you should also talk to an attorney who specializes in such cases, since they usually offer free consultations. During your consultation, an attorney can point out various defenses you could use, help you draft a response to the creditor, and even agree to represent you in court if necessary. Once a creditor knows you have legal representation, they may back off completely or suddenly become much more willing to discuss a settlement.

Paying the Debt

While you may be thinking your case will inevitably find its way to court, that is actually rarely the case. Even if you hire an attorney, a deal can likely be reached before a court hearing that will allow you to settle the debt for less than you owe, and to also set up a payment plan with affordable payments you make each month until the debt is paid. If you do reach a deal with a creditor, always make sure you get the agreement in writing. The agreement should state the creditor will consider the debt to be paid in full, and will report it to credit bureaus as such. If you don't have this in writing, it becomes your word versus theirs, which could get complicated very quickly, especially if you are dealing with a creditor who is less than stellar in terms of their business practices.

Affirmative Defenses

Should you believe you don't owe a debt for whatever reason, your attorney may advise you to use what is known as an affirmative defense. The most common of these is having a debt contract that was illegal or unable to be properly enforced, which could occur if you can prove you signed it while under duress or based on falsehoods given you by the original creditor.

Identity Theft

Finally, you may be sued for a debt you absolutely know is not connected to you in any way, shape, or form. When this happens, identity theft may be to blame. If you suspect this to be the case, your CPA and attorney will advise you to make the creditor show absolute proof you owe the debt. In most cases, they won't be able to do so, especially if you have plenty of documentation to the contrary. If the creditor is unable to prove that you do indeed owe the debt, the judge will likely dismiss the case and let you walk out of court a winner.

While it can be stressful to be sued for unpaid debt, always remember that you will have numerous options from which you can choose. By working with your CPA during this process and relying on the advice of an experienced attorney, you may find it possible to emerge from this situation with your credit score still intact, no liens against your property, and your bank account and wages still under your complete control.

Unfortunately, identity theft has become far too common, especially at tax time. Once an identity thief has your social security number, chances are they will waste no time in filing a fraudulent return in hopes of getting a large tax refund. However, you probably won't be aware of this until you try filing your own tax return, only to have the IRS kick it back on the basis of being a duplicate return with the same social security number. If you ever find yourself to be a victim of tax return fraud, here are some critical steps you should take immediately.

Contact the IRS and FTC

As soon as you are aware you are a tax return fraud victim, contact both the IRS and the Federal Trade Commission. You will need Form 14039, the IRS Theft Affidavit Form, to contact the IRS Identity Protection Specialized Unit. Submitting this form alerts the IRS that your identity has been stolen and used for tax fraud. When you contact the FTC online, you will also fill out a form detailing the incident, and will probably be asked to provide a copy of your driver's license for identity verification.

File a Police Report

Since you are a crime victim, contact the police and file an identity theft report. When doing so, also have copies of forms you submitted to the IRS and FTC. As you go through the process of clearing your identity, having a police report on record will be extremely beneficial.

Let Your CPA Know What’s Happened

Give your CPA a call and let them know what’s happened. At the very least, they can be apprised of the situation and take further steps to secure your tax return information on their end. They will also be better prepared if the IRS contacts them directly for more information.

Contact Credit Bureaus

Make sure you contact at least one of the major credit bureaus to notify them of potential tax fraud being committed against you. Once you do this, a fraud alert will then be attached to your credit reports. Also, make sure you thoroughly check your credit reports to see if anything unusual shows up on them, which may indicate the identity thief is doing more than filing fraudulent tax returns. To play it safe, your CPA may recommend that you request a freeze on your credit reports, meaning that new lines of credit will not be made available to anyone until you approve a release. Upon realizing you are a victim of tax return fraud, constantly monitor your credit reports for suspicious activity.

State and Local Taxes

While you probably will be focused primarily on your federal tax returns, remember that tax return fraud may also be impacting your state and local taxes as well. After all, it is likely the identity thief is trying to use your social security number and other information to get as much free money as possible sent their way before moving on to another victim. Therefore, contact your local and state government agencies to notify them of the situation, and to also find out what steps you may need to take.

Contact Your Bank social security number and other important personal information, your bank account may also be at risk of being emptied. Remember that your bank account number may even be on your tax return document since you were due a refund. Rather than face an unexpected and unpleasant surprise, contact your bank as well as your credit card companies to alert them about what has happened. Upon doing so, your bank accounts and credit card accounts can be frozen if necessary.

Don't Panic

While it may be easier said than done under the circumstances you are facing, try not to panic once you know you are a victim of tax return fraud. Chances are, your CPA has dealt with these situations in the past, and thus can assist you in contacting various agencies and letting you know what to expect along the way. The IRS has a process for dealing with tax return fraud as well. You will not be penalized or held accountable, either.

Verify Everything

Now that tax return fraud has happened to you, don't assume lightning cannot strike twice. In fact, once an identity thief is initially successful, they may try it again at some point with your information. To prevent this, you can begin by verifying anything and everything of which you may be unsure. This will include phone calls, text messages, emails, and even letters sent through the mail. Remember, the IRS and other legitimate individuals and organizations will never ask you for personal information over the phone or in an email. The IRS will provide you with a PIN for when you file future tax returns, since you’ve already been targeted. Use this PIN or give it to your CPA for next year’s return. Each year, you will be given a new PIN.

File Your Taxes Early

While you may think tax return fraud takes place mostly with people who file their taxes early, the fact is the opposite is actually true. In most cases, identity thieves thrive in the later stages of tax filing season, since they know the influx of returns makes stealing identities easier. By meeting with your CPA early on to file your taxes, you give identity thieves a much smaller window of opportunity to commit their crimes.

The Problem Won't be Solved Overnight

Unfortunately, your tax return fraud problems won't get solved overnight. If you are lucky, it may take only a few weeks before everything gets back to normal concerning your taxes and finances. However, don't be surprised if it takes several months or even a year at a minimum before your life returns to normal. It may in fact take a year for the IRS to sort everything out. But eventually, any tax refund that is due will be in your hands.

If you thought that dealing with tax returns under normal conditions was stressful enough, it doesn’t begin to compare to being a victim of tax return fraud. However, having a qualified CPA on your side during the process will make everything go a lot more smoothly.

If you are like many people in recent years, you may have chosen to toss aside the 9-5 job and become a gig worker. Whether you are driving for Uber, writing freelance articles or performing other services as your own boss, being a gig worker offers you flexibility and personal satisfaction. Unfortunately, it can also be harder for you to obtain a mortgage. Since gig workers are not usually issued W-2 forms, you may have little idea how to organize your finances so that you gain loan approval from a lender. If so, here's what you need to know.

Qualifying Criteria

Even though today's guidelines within the mortgage industry are virtually the same as they were 30 or even 40 years ago, this doesn’t mean you as a gig worker will be on the outside looking in when trying to obtain a mortgage. Actually, whether you work for yourself or are a full-time employee at a company, the qualifying criteria to get a mortgage is the same. When applying for a mortgage, your CPA can remind you that lenders focus on your credit score, the assets you own and especially your income history.

Two Years of Consistent Income

As for your income history, lenders always want to see at least two years of recent income history that demonstrates consistency. As a non-traditional home buyer, this will likely be your biggest hurdle, especially if you are in the midst of transitioning to gig work from a previous job at a company. However, the good news is that requirements for obtaining mortgages can vary greatly from lender to lender, so don’t be shy about shopping your mortgage needs with different lenders until you find one that will be the most helpful and willing to work with you on a mortgage.

Necessary Documents

When you apply for a mortgage as a gig worker, expect to be filling out lots of paperwork. You will need to provide numerous documents for your lender to review when assessing your application. The most important will be two years of your federal income tax returns, which may or may not include personal and business returns. Also needed will be your most recent business bank statements, a current profit-and-loss statement, and copies of your credit score and credit reports from Equifax, Experian, and TransUnion. Some lenders may also ask you to provide a letter from your CPA stating you have been in business for at least the past two years.. Your CPA will be happy to provide this, so don’t hesitate to ask.

How to Get Approved

If you want to increase your chances of getting approved for a mortgage, there are two important steps you should take. First, you should either maintain your current high credit score, or at least work on getting it as high as possible. To do so, always pay your bills on time, pay down as much debt as possible, correct mistakes on your credit reports, and don't go over your credit limits. The other thing you can do is to lower your debt-to-income ratio. Usually, lenders want this to be no higher than 43 percent for gig workers. Thus, you should try to avoid taking on new debt, and also pay off your existing debt as fast as you can. Should you be able to do all of this, you may be able to save up for a higher down payment, which can also increase your chances of gaining mortgage approval.

Best Mortgages for Gig Workers

If you have never applied for a mortgage as a gig worker, take note that not all mortgages are alike. It definitely pays to shop around to see what's available. While you may be able to get a traditional loan through lenders such as Freddie Mac and Fannie Mae, you may have trouble qualifying for these loans if you don't have outstanding credit and a long, strong income history. For many gig workers, mortgages from either the Federal Housing Administration (FHA) or the U.S. Department of Veterans Affairs are the answer. Along with accepting lower credit scores in the 600s, they are open to veterans or others who meet certain qualifications.

Work with Specialized Lenders

As the gig economy has become much more mainstream over the past several years, many newer mortgage lenders are choosing to specialize in helping gig workers get approved for mortgages. While you should of course pursue mortgage loans through traditional lenders, don't be afraid to seek out the help of newer lenders who advertise that they are geared towards gig workers, freelancers and independent contractors. With gig workers becoming more common, newer lenders are often choosing to have requirements that are less strict than in years past. However, remember to not get carried away during your home search. Instead, seek out properties you know you can realistically afford based on your income.

Can Gig Workers Get Pre-Approved for Mortgages?

Yes. Just like home buyers who are working in traditional salaried positions within companies, gig workers can also gain pre-approval from mortgage lenders. To do so, you will need to submit most if not all of the documents mentioned earlier. Once everything is submitted, don't be surprised if the lender calls your bank or CPA to verify your income and how long you have been in business for yourself. As for how long it may take to get pre-approved, it can vary from as little as 24 hours to perhaps one month.

It may feel as though you are fighting an uphill battle to get a mortgage as a gig worker. But don’t worry, it can happen. From gathering together your tax returns and other financial documents to learning as much as you can about which lenders may offer you the best opportunities for approval, your CPA's years of experience can help you navigate these and other complexities.

If you own a business, you often find the summer months are the busiest. Thus, you need as many employees as possible to help shoulder the workload. If your children are looking for summer work and the chance to earn extra money, this can present a win-win situation for everyone. However, if you have never before hired your kids to work at your business, you probably have questions about taxes and other related areas. To make sure you take the right steps along the way, here's what you need to know about hiring minor children for a summer job.

Issue Your Kids a W-2 Form

When you hire your kids for the summer, treat them just as you do other employees. This includes issuing them a W-2 form. Remember to keep accurate records so that their work hours and job duties are documented. If you have a business that is not incorporated, minor children's wages are generally exempt from Social Security, Medicare, and also FUTA taxes. However, always check with your CPA to find out what applies to your individual situation.

Business Tax Deduction

As long as you can prove to the IRS if necessary that your children were hired for a legitimate job and they were paid a salary considered to be reasonable for the position, you as a business owner could qualify for a business tax deduction. This is important, since this means your federal income taxes, state income taxes, and self-employment taxes all will be reduced come tax time.

Building a Retirement Nest Egg

Even though your children are still relatively young, hiring them for a summer job may be the chance for you to help them start building a nest egg for retirement. Depending upon the type of retirement plan offered by your business, and which employees can qualify for contributions, you may be able to help your children set up an IRA plan and contribute some of their earnings towards retirement. Consult with your CPA for details.

Why Hire Your Kids?

While you know there are certain tax benefits you may be able to take advantage of by hiring your minor children for the summer, there are also other reasons why you as a parent would want to give your kids a job at the family business. For example, giving your kids a job will help teach them responsibility, as well as give them valuable experience they can use later on when applying for other jobs. Along with this, having a summer job also lets your children gain an understanding of the types of work they like or don't like. In fact, as your children spend their summers working at your business, they may decide they want to continue in the family business as they get older.

What Types of Jobs Should I Give My Kids?

As for the types of summer jobs your kids can have at your business, this can run the gamut. For many kids, summer jobs entail doing quite a bit of manual labor, such as mowing and keeping the grounds of your business looking great. Other kids may find they like stocking shelves or assisting in the unloading of deliveries. If your kids are mature for their age and have caught on quickly to the day-to-day functions of your business, you may even trust them enough to let them answer phones and provide limited amounts of customer service.

Benefits of Hiring Your Kids

As a parent, you want the very best for your kids. Once you decide to give your kids summer jobs at your business, both you and your kids will reap numerous benefits. First, you won't have to spend your summer days worrying about what the kids are up to now that school is not in session, since they will be with you at your business. Another excellent benefit of hiring your kids for the summer is that it will give you the chance to act as a mentor. By giving your kids the wisdom of your many years of experience, they will have a better understanding of not only your business, but also just how hard you have worked for your family over the years to give them a good life. In fact, what started out as a simple summer job may end up letting you and your kids bond in ways you never imagined.

Are There Minimum Age Requirements?

Actually, the IRS does not have any minimum age requirements when it comes to kids being hired to work at a family business. However, this does not mean you should immediately decide to put your newborn or toddler on the company payroll! Remember, you are still required to hire your kids for jobs that are appropriate for their age. To stay out of trouble with the IRS, your CPA will suggest you choose age-appropriate jobs for your kids, pay them a reasonable wage, and have a simple document in place that outlines their responsibilities. The duties for the summer jobs should always be directly related to your business, and not include any personal services. Thus, while it's fine to hire your kids to mow the grass at your business, it's not okay to have them doing this at your home on company time.

Finally, once you iron out all the tax details with your CPA, you and your kids may discover that hiring your minor children for summer jobs is a rewarding experience for everyone. Your kids will benefit by earning money, gaining job experience and learning about responsibility and why it's important to do their best at any type of job. As a parent, you will have peace of mind about your kids’ whereabouts, gain tax benefits as a business owner, and have the chance to mentor what may be the next generation for your family's business.

For both private individuals and small business owners, the threat of financial scams is all too real. Every year, billions of dollars are lost to criminals who have perfected various scams. In many cases, once your money is gone, recovering it is almost impossible. Along with the embarrassment that comes with being conned, you or your business may face extreme financial hardship. To avoid becoming the next victim of a financial scam, remember these important tips.

Only Give to Verifiable Charities

Whether you want to help animals or people, make sure you donate only to charities you and your CPA can verify are legitimate. Should someone come knocking at your door asking for cash donations for a charity, chances are it is a scam. To be safe, only give to charities you already know and trust.

Guard Your Company's Credit Cards

As a business owner, you should guard your company's credit cards very carefully. To do so, only authorize those who absolutely need to use the cards as authorized users with the credit card company. Otherwise, you could find yourself with one or more employees who are using your company's credit cards to fund a very extravagant lifestyle for themselves.

The Home Repair Scam

When warm weather arrives or following a natural disaster, home repair scam artists are on the prowl for unsuspecting victims. Should someone stop by your home offering to do various home repairs, don't take them up on their offer. In these scams, the scammers ask for payment before they do any work, use high-pressure tactics to force you into making a quick decision, and make sure nothing is in writing. If you need home repairs, always use those who are willing to provide references, are in good standing with the BBB, and have been in business for many years.

Install Malware Protection

If you have a business with an e-commerce site, installing malware protection and other online security protection will help you sleep much better at night as a business owner. Should cybercriminals be able to hack into your system, they can potentially steal personal information from your customers, as well as your company's financial data. When this occurs, this sets the stage for identity theft on a grand scale.

If It Sounds Too Good To Be True…

Like most people, you'd like to have as much money as possible. Scammers know this, which is why they often come up with investment scams that claim investors can get rich quick. But as you and your CPA know, if it sounds too good to be true, it usually is. Thus, before you ever invest any of your money, get everything in writing and discuss it with your CPA before moving forward.

Don't Disclose Personal Information

For many scammers, the easiest way to get credit card numbers, Social Security numbers, bank account numbers, and other vital information from people is to simply call them up on the phone. Remember, the IRS and most reputable banks, agencies, and other organizations will never request this type of information over the phone.

Don't Open Suspicious Emails

In your business, you and your employees receive a large number of emails each day. While most are legitimate, others may be scams. Should a link be opened within a suspicious email, it can unleash a virus into your company's IT network, leading to identity theft or even having your data held hostage, which occurs with ransomware. While mistakes can happen, do all you can to inform your employees on how to handle emails that look suspicious.

Shred Old Documents

For both business owners and individuals, investing in a paper shredder can prevent plenty of headaches down the road. Whether it's old bank statements, tax returns from years and years ago, or other documents that contain personal or financial information, shredding these documents is always recommended. Should you simply toss them in a trashcan, it is much too easy for others to retrieve them and begin the process of identity theft.

Don't Send Money to Nigeria

If you are a grandparent, you may get a call from someone who is claiming your grandchild or other family member is stuck in jail, has been involved in an accident, or is stuck in another country and needs immediate cash. Known as the "Grandparent Scam," the caller will insist that you wire thousands of dollars to them immediately. Rather than fall for this scam, use your common sense and ask the caller questions only your immediate family would know. Once they realize you are on to them, they will hang up.

Update Your Operating System

At your business, always make sure you have an IT operating system that is up-to-date. This should include not only using the latest software for accounting and other financial tasks, but also make sure your system is updated as frequently as possible. Should you let this lapse, it becomes much easier for your system to be hacked, allowing cybercriminals to plant malware and other viruses that will start stealing your company's data.

You've Won the Lottery (Not)

While it's always nice to dream about what you would do if you won the lottery, this is also another chance for scammers to cheat you out of your money. First, remember that you can't win the lottery unless you've actually bought a ticket. Also, lottery winners never have to pay taxes before collecting their winnings. Finally, if you are lucky enough to win a lottery, the lottery folks themselves will not notify you. Rather, this will be your responsibility. Thus, if you get a call or email stating you're an instant millionaire, it's unfortunately a hoax.

While it can feel overwhelming when you think about how easily you can become the victim of a financial scam, it's actually very easy to avoid becoming a victim. Along with shredding documents, giving to well-known charities, and staying clear of suspicious emails, talking to your CPA and using common sense will keep your money safe every time.

When choosing a CPA, you have many choices. Ideally, you want to find a CPA with whom you can establish a long-term relationship with. This way, you both get to understand one another’s work styles and processes, the CPA will get to understand your business in depth, and you will have a trusted partner in your personal and/or business success.

Understanding the Difference Between a “Tax Preparer” and a CPA

The IRS maintains a public online database of tax preparers who obtained a Preparer Tax Identification Number (PTIN), which is required for anyone who charges to prepare a federal tax return. But you should know that there are no educational or experience requirements for obtaining a PTIN or being listed in the IRS database. Anybody—your brother-in-law, your 18 year-old college student, your hairdresser—can say they are a "tax preparer” and charge you money to do your taxes if they have a PTIN.

A Certified Public Accountant (CPA) is an accounting practitioner who has completed the educational requirements, gained experience, and passed the CPA Exam to receive the CPA designation.

Not all tax preparers are CPAs, and not all CPAs are tax preparers. Working with a CPA to prepare your taxes can save you time and money. It may also aid in the avoidance of future IRS penalties or audits. You may also expect a CPA to assist you in ways more than just preparing and submitting your tax returns. Depending upon who you choose to be your CPA, you may expect to have:

• Auditing and review services
• Tax consulting and preparation
• Litigation consulting and representation
• Financial planning and strategy services

How to Choose a CPA

Choosing a CPA is a deeply personal choice. But in general, you’ll want to consider the following factors when making this important decision.

Being Accessible
You will want a CPA who is generally available to take your phone calls or meet with when you need to discuss important matters. Most CPAs are very good at being responsive and available to clients. Others may try to field calls to assistants, which is fine, as long as when it matters you can get your CPA on the phone. Since your CPA may be helping you to make critical financial decisions, direct conversations are often needed.

Being Affordable
A CPA charges more than a tax preparer because they offer much more value than a tax preparer. While a tax preparer will fill in numbers on the lines of a tax form, a CPA understands the meaning behind all the numbers and is constantly vigilant for opportunities to take more deductions and save you money in other ways. CPAs also offer strategic financial moves during the year that can get you ahead come tax time. But your CPA should also be affordable for you. Otherwise, you may be tempted to go without a CPA at all, which would be a huge mistake.

Being Affable
It’s important that you have good rapport with your CPA. Personalities vary, but you should be able to have frank discussions in a friendly but professional environment. You shouldn’t feel intimidated or embarrassed with your CPA. Many people with CPAs even come to think of their CPAs as friends over time because they have such great relationships with them.

Offering the Right Services
As mentioned, the services that CPAs offer can vary. When choosing a new CPA, ask about what services they offer. Consider what your needs are currently as well as what services you and/or your business might need in the future. This will ensure that you can stay with that one CPA for the long-term instead of needing to transition to a CPA that is better able to keep up with your growing enterprise.

Questions to Ask Potential CPAs

When seriously considering a CPA to hire, there are some questions that you’ll want to ask. They are:
What are your areas of expertise? If the CPA mainly works for large corporations and you’re just looking for help with retirement planning, you may be better off elsewhere.

Are there any references I can contact? The CPA should be able to provide one or two people whom you can contact to see what it’s like to work with the CPA. You can also check out online Google reviews for the CPA practice.

What do you expect from your clients? A good working relationship entails reasonable expectations from both parties. Make sure that you are able and willing to provide what you need to your CPA so that they can do their job efficiently.

How long is your oldest client relationship? This is a good question to ask because it speaks to the CPAs ability to retain clients. If the answer is one year, that may indicate a level of dissatisfaction from clients that is troubling. If the answer is five years, hire the CPA right away because their services are likely in high demand!

What is your policy about calls during the year? This question speaks to accessibility. It’s a good question because many CPAs have specific policies about this. Some CPAs may charge by the hour for advice during the year. Others charge a flat fee. It’s good to find this out upfront.

How do you charge? Again, you are looking for information that will avoid a surprise later on. The CPA may offer you a pricing sheet for the various services they offer. It’s perfectly acceptable—and even smart—to ask for pricing so that you and the prospective CPA both know you are on the same page as far as fees go.

As mentioned, hiring a CPA is a personal choice not to be taken lightly. The CPA that your neighbor uses may not be right for you. The highest-rated CPA in town might not be a good fit. Shop around and you’ll find the best CPA for your needs. Just don’t settle for anything less than a CPA to help you with your financial needs.

When you take a close look at people who are successful in their careers and other areas of life, you may think they do not seem that much different from yourself, and you would be right. In fact, what makes some people more successful than others is a very thin line. In most cases, it comes down to the mindset you have regarding situations you face on a daily basis. While there is no substitute for hard work and perseverance, knowing how to cultivate a growth mindset can help you achieve more than you ever imagined. If you're ready to change your life for the better, here are some steps you can take to change your thinking and change your life.

What is a Growth Mindset?

Before you can cultivate your growth mindset, it's always good to know how a growth mindset is defined. When you have this mindset, it means you believe you are capable of developing high levels of skill and intelligence. In essence, you have the belief that success comes not only from using your existing qualities and traits, but also from continual personal development.

Determine Where You Want to Go

To achieve success and develop your growth mindset, you first need to not only examine where you are now, but also give careful thought as to where you want to go. In other words, why do you want to change? Where do you want to be one year from now, or in five or 10 years? Most of all, think hard about why you have not been as successful as you would have liked. By having an honest conversation with yourself, you are on your way to developing a growth mindset.

Build on Past Failures

To achieve future success, you first have to build on your past failures and change the way you look at failure itself. Rather than viewing a failure as your inability to do something, instead look at it as a crucial learning experience on which you can gain knowledge. Remember, even the world's greatest athletes, actors, and business leaders all suffered numerous failures along the way.

Know Your Limitations

Just as Clint Eastwood's legendary silver screen character Dirty Harry said along the way, a person has got to know their limitations. By knowing yours, this lets you set realistic goals for what you want to achieve. This lets you know that while something may not necessarily be out of your reach, it will require more effort on your part to realize success.

Be Aware of Your Thoughts and Words

Once you start becoming more aware of what you are saying and thinking each day, you will be surprised at just how much negativity may be in your brain and exiting through your mouth. For example, if you always find yourself thinking "I wouldn't be good at that" or saying "I can't" on a regular basis, you are setting yourself up to fail. Instead, cultivate your growth mindset by thinking to yourself "I'm not good at that--yet," and replace "I can't" with "I can."

View Challenges as Opportunities

When most people face challenging situations, they view them as problems. When they take this approach, they have already determined in their mind that they will likely fail. If you instead choose to view challenges as opportunities, you will be surprised at just how much you can accomplish. Using the power of positive thinking and a can-do attitude, almost any challenge can be conquered.

Celebrate the Success of Others

Yes, be happy when others achieve high levels of success. Better yet, if you get the chance to talk to them or read about their success, pay close attention to what they say. By opening up your ears, you can learn a few secrets to success.

Reflect on Your Successes and Failures

Whether it's at the beginning of your day or at the end, always give yourself a few minutes to think about what transpired in your life over the past 24 hours. When you do, you'll often find that even in the darkest situations where you feel as if you failed, you can find a positive if you look hard enough. Instead of beating yourself up verbally and psychologically, think about what you will do better the next time you face a similar situation.

Don't Give Up

Perhaps most importantly, don't give up in your quest to cultivate a growth mindset. Remember, choosing to give up is the easy way out, and will keep you exactly where you are right now. By carefully examining your skills and abilities, knowing your limitations, and having a willingness to learn from your mistakes along the way, giving up will soon not be an option.

Apply This to All Aspects of Your Life

The best thing about having a growth mindset is that the principles it’s based on can be applied to all areas of your life, including your business life, your personal life, family life and more. You can even apply it to sports endeavors and to the challenges that come to everyone over time. A growth mindset enables you to frame everything in your life in a positive way so that you are not encumbered by problems, but empowered by opportunities.

Don’t worry if this new change in thinking takes a while to “sit in.” Like any new habit, it will take time for you to cultivate your growth mindset. But as the days and weeks ahead come and go, chances are you will soon start to notice many positive changes in all the areas in your life. You may even have people coming to you and asking what your secret is!

As the COVID-19 pandemic stretches into 2022, companies and employees are facing unprecedented challenges. While some workers, especially those in health care and education, have expressed concerns and filed complaints or lawsuits pertaining to mask and vaccine mandates and other measures, the fact is most employers are trying to put measures in place to keep employees safe. As to how this can be accomplished, here are some methods that have proven to be effective.

Offer Working from Home

Since the pandemic started, many workers have found themselves performing duties remotely from their homes. In workplaces where this can be done, it can play a vital role in not only keeping workers safe, but also help in containing the spread of the virus, especially to those individuals who may be at high risk.

Install New Ventilation Systems

In many businesses, the installation of new ventilation systems has become a reality to help air circulate better throughout an office, store, or elsewhere. Unfortunately, these ventilation systems are not cheap to install, placing even more strain on the finances of businesses that may already be struggling. If you are considering this for your business and have financial concerns, discuss the matter with your CPA prior to beginning the project.

Ensure Customer Compliance

While some customers may object to wearing a mask, maintaining a safe distance from others, having to be vaccinated prior to entering a business, and other protocols that may be in place at various businesses, ensuring the majority of them comply with current protocols is vital to keeping your employees safe during the pandemic. By having clear policies in place, making no exceptions, and backing up your employees when objections are raised, you should find most customers are more than willing to do their part to stop the spread.

Encourage Use of Sick Leave

If employees are displaying even minimal symptoms of COVID-19, it is best they stay home rather than come in to work. To make this easier on your employees, encourage the use of sick leave when applicable. Also, you as the employer may want to consider expanding sick leave benefits to employees who it may not apply to under normal conditions. If you choose to do so, you may want to consult with your CPA as to how any changes in benefits may impact the bottom line of your business.

Provide Personal Protective Equipment

If you own a restaurant, retail store, or have a medical or dental practice, one of the best ways your employees can be protected from COVID-19 is to give them an ample supply of PPE. This should include masks, face shields, gloves, hand sanitizer, and other related items. Since it is almost impossible for some employees to avoid close contact with others, especially in health care settings, having enough PPE for these employees will be a smart investment on your part.

Clean and Disinfect

Depending on the nature of your business, you should make cleaning and disinfecting a top priority on a daily basis. While you can do some things yourself, such as wiping down countertops, desks, tables, and equipment, you may want to consider hiring professional cleaners to perform state-of-the-art disinfection of your office, store, or other facilities on a regular basis. Since this will be yet another added expense in your company budget, have regular discussions with your CPA to understand the financial impact of taking such measures.

Encourage Social Distancing

Though it is inconvenient, maintaining a social distance of at least six feet from others has still been shown to be perhaps the most effective way to keep the virus from spreading. However, if you own a restaurant or have a large staff within an office, this presents numerous challenges logistically. From moving customers to outdoor dining to requiring more workspace for office employees, these and other measures ultimately cost your business time and money, which is why you will need to rely on the advice of your CPA to keep your business profitable in the days ahead.

Promote Vaccinations

If you have employees who have been hesitant to get a vaccination or have trouble finding the time to do so, holding a vaccination clinic at your workplace can be a great way to keep employees safe. In addition, it also demonstrates how your business and employees are committed to the local community. By partnering with your local health department or hospital, you can help your employees and other community members gain protection from the virus.

Offer Temperature Checks and Symptom Screenings

Unfortunately, many people who have the virus may not be aware they have it, much less that they are spreading it to everyone with whom they come into contact. To keep your employees safe, you may want to consider implementing temperature checks and symptom screenings on a daily basis. From checking temperatures on an employee's arrival at work to having your company nurse perform symptom screenings, taking these steps can prove important in helping to get your workplace back to normal sooner rather than later.

Encourage Hand Washing

While it sounds simple, encouraging hand washing among your employees is one of the easiest things that can be done to keep them safe. In addition, you may want to also discourage traditional handshaking, instead opting for an elbow bump or perhaps waving at one another while being six feet apart. Depending on your workspace, you may need to create more areas that make hand washing easy and convenient. Should any renovations large or small need to be made, go over the financial details with your CPA to know how this will fit into your budget.

With the added expenses that have resulted from the pandemic, you and many other business owners may be pulling out your hair day after day in frustration. However, it is important to remember that the pandemic will eventually end. When it does, you want to make sure your business is well-positioned financially. To ensure this happens, work closely with your CPA as you move forward in keeping your employees safe.

Though you may be known as a "baby boomer," you and 10,000 others like you are turning 65 each and every day, meaning retirement benefits like Social Security are becoming an important part of your life. Since it's likely Social Security benefits will play a crucial role in your financial future upon retiring, it's vital you stay aware of any changes and how they may impact you moving forward. To help you do this, here are some changes you can expect with Social Security benefits in 2022.

The Social Security Trust Fund is Eroding

As you've probably heard for many years now, the Social Security Trust Fund continues its path toward erosion. At its current pace, the excess Trust Fund revenue will be depleted by 2033. If this occurs, Social Security would then be able to pay out benefits that would be 80% of what current recipients are now receiving. Unless Congress intervenes between now and then, the 20% reduction in benefits is believed to be so drastic that it would put many seniors into poverty. If you think this could negatively impact you in a major way regarding your retirement planning, speak to your CPA about various options you may have for your money.

Full Retirement Age Has Increased

If you are still a few years away from retiring, it's important to remember that the full retirement age for Social Security has increased. Under the new rules that will take effect soon, anyone who was born in 1960 or afterwards will now have to wait until they are 67 to receive their full retirement benefits. However, if you have been planning on taking your Social Security benefits upon turning age 62, this has not changed in any way. But remember, by choosing to begin taking Social Security benefits at age 62, you will be receiving monthly benefits that more than likely will be drastically lower than if you wait a few more years, so keep this in mind when discussing your finances with your CPA.

2022 Social Security Cost-of-Living Adjustments

Popularly known as the COLA, the Social Security Cost-of-Living Adjustment will be going up substantially in 2022. Unfortunately, this is occurring due to the high inflation rates that are making prices of almost everything go up in a big way. For 2022, Social Security recipients will see a COLA of 5.9%, making it the largest one-year increase in 40 years. Also, you should keep in mind that depending on inflation numbers in the years ahead, your current as well as future Social Security benefits may increase each year if deemed necessary by the federal government. Though your CPA won't have a crystal ball to look into the future, they can use their experience to give you sound advice as to how current and future increases could impact many aspects of your finances.

Maximum Social Security Benefits Are Also Increasing

While the cost-of-living adjustments are going up for Social Security recipients, so too are the maximum benefits for those retirees who are near the very top of the income scale for Social Security. If your income is at least $147,000 or more, you can expect to see a small increase in 2022. As of now, regardless of your pre-retirement income, no individual at full retirement age can collect more than $3,345 per month in Social Security. This applies to the richest of people, even those such as Elon Musk or Jeff Bezos.

As for how delaying your retirement until age 70 can make a difference, consider that in 2022 your maximum Social Security benefit could increase to $4,194 per month. Needless to say, you and your CPA could put those several hundred extra dollars per month to work for you in a variety of ways.

More of Your Social Security Benefits will be Taxable

Yes, the IRS will come calling in 2022 to tax more of your Social Security benefits. However, the amount of taxes you will be paying on your benefits will depend on your income level and age.

If you have an individual income between $25,000-$34,000 or are married and have a combined income as a couple ranging between $32,000-$44,000 per year, a whopping 50% of your benefits may be taxable.
While 50% sounds like plenty when it comes to being taxed on your Social Security benefits, that's not the worst of it. Should you have an income level as an individual that exceeds $34,000 or are part of a married couple with an income exceeding $44,000 per year, the IRS can tax your Social Security benefits at a rate of 85%. After you've picked yourself up off the ground, consult with your CPA to find out how this will apply to your situation.

Social Security Benefit Estimates

While everyone wants their Social Security benefits, few take the time to keep up with their Benefit Estimate statements that are provided to them by the Social Security Administration each year. Filled with valuable information, you and your CPA can use these statements to see not only what your benefits are like at the moment, but also where they may be in the future.

Thus, whether you are planning on taking your retirement benefits at age 62 or want to wait until you turn 70, creating an account at ssa.gov will take only a few minutes and give you the information needed to plan out your retirement in regards to Social Security benefits.

Due to the many variables that will come into play regarding Social Security benefits in the years ahead, you should never take any chances with your finances and retirement planning. Rather than keep yourself in the dark and hope all goes well, schedule a meeting with your CPA to discuss the 2022 Social Security changes. By doing so, you'll get peace of mind and a much clearer vision of your retirement.