My Experience Switching from Hiring a Tax Preparer to Using Tax Software

save using tax softwareDid you do your taxes on your own, or did you hire someone to do it for you?

The answer to that question, in recent years, has been the latter for me. Up until this year, I went to see a tax preparer to help me get things done. I even wrote about this in the past, extolling the virtues of hiring a professional to do your taxes.

I still think it can be a good idea for many people, depending on your situation. In my case, it had been getting more expensive to get them done, which precipitated my assessing whether or not it was truly necessary to pay someone. After taking a look, I proceeded to take the plunge and do taxes myself this year.

Now, for many years I did taxes by myself. As in, the manual way using pen and paper. Getting free tax forms from the library (yet another way the local library can save you money) might still be an option, depending on the type of return you’re filing.

However, this year I decided not to go back in time, so to speak, to the days of pen and paper tax preparation. Instead I chose a happy medium: using tax preparation software.

We went to Costco, and I was able to pick up a copy of TurboTax at a good price. Paying under $100 for the version I needed seemed like a potential bargain compared to the $400+ fee I shelled out last year.

Yes, I realize $400 is quite expensive – hence the move to trying it out using Turbo Tax. Actually, the guy I went to in years past charged me just over $200, which seemed like a good price. He passed away, just months after preparing my return a couple of years ago. He was a great guy, and made getting taxes done an almost enjoyable experience with his sense of humor and joking manner. So last year I went to a totally different preparer and was a bit surprised by the $400+ fee.

What did I think of TurboTax?

The bottom line is that I found it to be pretty good!

What I liked about it were three things in particular:

  1. Super convenient. It’s not like you have to make an appointment to get taxes done with this approach! Whether its 7am or 7pm, you can work on it at your own schedule. You can also work on it at your own pace, and save it in progress. That’s an advantage over setting appointments with tax preparers.
  2. Easy to use. Really, it’s set up in such a way that you don’t need to know much about taxes at all. As a personal finance blogger, I’m naturally going to be more financially literate than the Average Joe or Jane out there. But still, it’s nice to have software walk you through the steps automatically.
  3. Inexpensive.  This cost me less than 25% of the prior year’s tax preparer expense.  That’s appealing to this Squirreler!

Those of you that have used TurboTax or other software for a number of years now probably know these advantages really well. But maybe you’ve wondered how things might be if you actually went to a tax preparer instead.

Well, in my updated view, for a return without a ton of complications, you might as well do it on your own with the right software (whichever that might be). Besides, by comparing to how the preparers did it in prior years, I think this turned out fairly consistent to past returns and was done without too much time being invested.

If your return has a lot of complications, I can still see great value to hiring someone though, no doubt about that! Expertise matters in those situations.

My Questions for You 

Did you get your taxes done this year, or did you take a DIY approach?

If you did your own taxes, what was your method?

If you hired out, do you think it’s worth the extra cost?

5 Mistakes to avoid when getting a POS System

Point of sale systems have made the life of a business owner today a heck of a lot easier than when everyone used a big old cash register, a pen and a log book. With all the automation, speed and efficiency of a robot, POS systems can help run a restaurant or retail store and take some of the burden off the people that are working alongside it. But you just can’t get any point of sale system you come across, because not all of them are created equal. Here’s a list of mistakes to avoid when choosing your next POS system.

  1. Not going Branded. For clothes and other items, you can make do with simple, non-branded stuff. You may even get away with buying a cheap phone. But for a system that will help you run your business? You simply can’t take that risk. Being frugal with your POS system will cost you more future headaches and frustration, which leads us to…
  2. Not choosing a reputable Manufacturer. Imagine investing in a system that worked fine for a few days and then quit on you during the busiest week of the season? And when you called for support, it was almost non-existent and you had to call an IT professional to help you because they were taking forever. These headaches happen with non-established companies. It’s like buying a car. You know what you get when you buy a Toyota or a Honda. These cars are legendary for their safety and service record. Would you take a risk buying a cheap car from a company you just heard about? You would never risk it! Go for companies that have a proven track record. 
  3. Not doing your Research. Word of mouth marketing is fine. But when you hear about a POS system from a friend, who heard it from another friend, would you just go ahead and buy it? Choose a POS system that fits your business model. Do your own research and never take anyone’s word for it unless you see the actual point of sale system in action. If you narrowed down your choice for a POS system, ask for three or more referrals that use the exact same system you want to buy. Talk to the business owners about the system and ask if you can drop by and see it in action. Ask about the company’s customer service record and how fast they respond. Ask them for any system glitches and quirks that they may have encountered. 
  4. Not asking the manufacturer everything. When you talk to a manufacturer, ask them anything and everything. It helps if you make a list of things to ask so you’re prepared for a little Q&A. Ask about training schedules, service response times, if there’s dedicated support, scheduled updates, reporting, cloud support, experience in your industry, bundled hardware, discounts, etc. 
  5. Using your old hardware. Some business owners want to save money on point of sale systems, so they just buy the software and attempt to assemble their own hardware using an assortment of old computer hardware bought online for cheap. I’m all for the DIY spirit and repurposing old stuff, but you just can’t take the risk of using old hardware for your POS system. What if it has compatibility issues? Also, the hardware used for businesses were made to take abuse for 12 hours or more, everyday. The same cannot be said for machines made for home use, especially old ones. You’re better off paying a little bit more extra for the hardware that comes with the software, just to save you from all the stress.

In a Squirreled Nutshell

Saving money is very important in life and in business. But when you’re a scrooge on some of the essentials like a good restaurant POS or a POS for retail, you’ll only end up hurting your bottom line. Please remember that a point of sale system is not an expense, but rather an investment that will help you run your business better and more efficient than ever.

A Beginner’s Guide to Memorable Marketing

Starting your own business is a huge step, however if you get it right there’s is every chance that you can be successful and have a significant income boosting your bank account on a month by month basis. In order to be a success though, you need to make people aware of you, your company and what it is you have to offer, which is where marketing comes to the fore.

This infographic from the team at Promotional Plus acts as your beginner’s guide to memorable marketing, exploring features such as color choice, how to maximize social media opportunities alongside many other useful facts, figures and information to get your marketing right.

This Infographic was created by Promotional Plus

What’s the Deal With Forex Trading?

Forex is a short word that can refer to a lot of things. On a global scale it has to do with the trading of one kind of currency for another. Every time you you go on a trip out of the country, you’ve got trade your nation’s currency for that of the regional currency. This process is known as “foreign exchange” or, more catchily, Forex. But Forex doesn’t just happen in simple over-the-counter interactions between foreigners, it also happens on a global scale constantly. If one country is selling arms to another, or an importer is buying coffee from Nicaragua, currencies have to be exchanged, money translated from one form to another.

Because individual currencies are gaining and losing value all the time, this means that on any given trade, one member is getting a slightly better deal than the other, as long as the currency value change swings in their favor. In anticipation of currency value changes based on specific international factors, large institutions and even sovereign nations will invest in foreign currencies in order to see a big return. Do you anticipate that the Euro is going to recover from its recent plunge? Buy up a bunch and wait for the price to rise, then sell for a profit in your native market. This form of foreign currency exchange (forex) is known as the spot market, where the buyers and sellers always own the asset that is being traded.

But Forex also has a large futures market, where entities and individuals can speculate about the value, moment to moment, of global currencies relative to one another. By placing bets on how a currency is going to increase or decrease in value, over a specific window of time, Forex investors are a brand of day trader who can gain and lose money in big quantities, very quickly. The odds change depending on the broker and the currency in question. This is called leverage, and the higher the leverage, the more money an investor will win on a successful bet.

Like all speculative investment, Forex trading success is built on knowledge, observation, experience, and luck. Luck is perhaps the most important factor, as there are simply too many global factors to consider, which underly the momentary value of any one currency. But experience is also very important for the Forex trader. By taking advantage of big wins, Forex traders can offset many smaller losses. In this way, the best Forex traders make a lot of profit, even though they may get their bets right less than 50% of the time.

To start trading on Forex market you need an advanced and high-grade  Forex trading platform which can provide you with all the necessary trading tools, including technical charts and indicators, user-friendly interface, real quotes and news feed. If you are a novice trader you can open a demo account and start practicing, making decisions and predictions without risking your real money. In this way, you’ll see the rhythm of the market, and you’ll learn the kind of intuitive decisions a great Forex trader makes.

Auto Title Loans Can Help You to Repair Bad Credit

auto title loanUnfortunately, emergencies happen where the need for cash is instant. Perhaps you have been hospitalized or involved in an accident, maybe there has been a death in the family. Your house or vehicle may need repairs or any other situation. In any of these cases, a title loan may just be what you are looking for, particularly if you also have a poor credit score. Additionally, these loans can actually help you to repair your credit rating.

Is There a Mistake on Your Credit Score?

Credit scores can be poor due to a variety of reasons. It can be because you made poor financial decisions, but it can also be due to circumstances beyond your control. However, it is also possible that you have been the victim of identity theft, or that there is simply an error on your file. Either way, however, this does not help you if you need money fast, because it can take a significant amount of time to rectify these situations.

If you aren’t sure about your credit rating, you should request a copy of your credit report. This will allow you to see exactly what is on there and help you to identify whether there are any mistakes. There are laws in place to allow you to dispute anything you spot on that report that is not correct. To do this, you must write to the credit agency, as well as to the organization that has put a negative marking against your name. In this letter, you must write why you believe the marking to be in error. Although this will take time, you will eventually recover your credit score to its rightful position.

Again, however, if you need money now, all these actions will not be of any benefit to you in the immediate here and now. However, by applying for title loans California lenders may just be able to help you restore some of your credit file as well.

How a Title Loan Can Restore Your Credit

It is very easy to apply for a title loan and your credit file is not of any importance, as your vehicle is the collateral on that loan. You do, however, have to have a vehicle that is free from liens, including car finance. When you take out such a loan, you will be able to keep and use your vehicle so long as you repay your debt. This means that there is no negative influence on your own lifestyle. However, your vehicle is in collateral, so if you don’t make the repayments, it will be repossessed.

One of the most important factors on your credit file is your ability to pay back any financial agreements right now. Hence, if you take out a title loan and pay it back on time, this will instantly boost your credit rating as well. Indeed, many people have taken out these types of loans with the sole purpose of rebuilding their credit. To do this, they place the loan principal in a savings account and simply pay it back, with interest, after one month. This shows that they have sufficient finances and that they stick to agreements.

What is a Reverse Mortgage?

reverse mortgage seniorsWhat this article is all about:

  • A Financial Tool
  • Criteria to Get a Reverse Mortgage
  • Testimonials

A reverse mortgage is a loan product designed for senior homeowners 62 years of age and older in order to help them age in their homes if they desire. Reverse mortgages allow seniors to access the equity in their homes and convert it into non-taxed cash to be used however they would like. Meanwhile there is no monthly mortgage payment and the home’s ownership stays with the borrower.

A Financial Tool

Senior homeowners can choose to spend their reverse mortgage funds however they would like. After paying off their existing mortgages, many use these funds from their home equity to pay off credit card bills, daily expenses, or medical costs. Paying these obligations can free up a lot of cash from the borrower’s income that used to be spent paying them down.

 

In addition, some senior homeowners use it as a retirement financial planning tool. When the line of credit disbursement is chosen, seniors can in essence freeze the equity of their home to save its availability for their possible future use. Meanwhile, because interest is charged only on the used portion of funds, all unused funds are interest free. 

Criteria to Get a Reverse Mortgage

There are a few criteria, however, that senior homeowners must satisfy before qualifying for a reverse mortgage. Senior homeowners must be at least age 62 or older and live in their home as their primary residence. The original mortgage must be paid off or at least paid down so that there is enough equity available to pull.

 

There can be no delinquency on federal debt and borrowers must have the financial means to be able to satisfy loan obligations and terms, such as paying property taxes, insurance, and any homeowner’s fees. Because there are no monthly mortgage payments on the loan, borrowers are obligated to stay current on all of these expenses or they may face foreclosure.

 

In addition, borrowers must complete a “consumer information session” with a counselor who is approved by the U.S. Department of Housing and Urban Development (HUD).

 

 

Testimonials

Senior homeowners who have closed this loan have been raving about how much it has helped them. Every day, borrowers share their testimonials with the leading lender in the reverse mortgage industry, American Advisors Group (AAG), praising the government-insured loan product.

 

Danny W. of Washington, for example, had only good things to say of his reverse mortgage. “The peace of mind and flexibility the reverse mortgage offered me is immeasurable,” he says. “Thanks to my reverse mortgage I was able to travel to Europe and visit my family.”

 

John H. of Pennsylvania also had praise. “I don’t have to pay a mortgage payment each month and I got some cash on top of it. I felt like I had nothing to worry about and that everything would be taken care of and it was!”

 

“I was down to nothing,” says Theodore C. of New York. “But the reverse mortgage allowed me to pay off my mortgage when I was about to be foreclosed on. I got to keep my house, fix it up nicely, and have extra money in the bank. I’m very satisfied and happy with the reverse mortgage.”

 

 

Many senior homeowners have found in a reverse mortgage the help they needed to be able to stay living in their homes for as long as they wish while receiving their home’s equity in cash without having to pay a monthly mortgage payment. For many seniors across the United States, this loan product is exactly the solution they had been looking for.

Money Mindsets: Scarcity vs. Abundance

money saving mindsetOf course it would be a personal finance blogger who has a real life, philosophical discussion about the merits of different money mindsets. I was that person recently, having taken part in a conversation that went down the path of discussing the merits of a “scarcity” mindset versus an “abundance” mindset when it comes to money.

Yes, I know. I’m a money nerd.

How the Conversation Started

We were talking about how here in Chicago, there are a lot of younger people buying pricey condos and living it up not long after graduating from undergrad, or perhaps grad school. I was one of those people back in the day (post-grad school), at least to some extent. It was a great time, but I compare my finances to people I know who lived at home with parents for a number of years at the same age, and they were able to plow money into savings at a much greater rate.

Consequently, that money – which was then invested, presumably – has grown to the point where these people are in really good financial position. Compound interest worked its magic, and while they may have sacrificed a little bit in terms of lifestyle at that age, they’re reaping the benefits later in life.

I thought that the people spending and living it up are being a bit shortsighted and should have chosen to live conservatively and save for the proverbial rainy day. My friend though that doing that when really young is living scared, and that it’s better to have a positive “can-do” approach toward making money and having marketable skills.

Scarcity Mindset

So, my position was described by him as a “scarcity” mindset. In other words, a way of thinking about money that makes it seem like something that’s difficult to make. The criticism was that having such mindset causes people to not think expansively, and be scared with money.

The problem (according to the critic of this way of thinking) would then be that by being defensive, less risks would be taken in general. And risk-aversion could theoretically impact your willingness to aim high with goals, maybe not pursue new jobs, not actively network with others, and even be scared to invest intelligently. With investing, there is of course a risk/reward component to things, and every percentage point of rate of return can really matter over the long term.

My view, as I defended it, is that money is not necessarily easy to make. Things change in life, and people’s lives can take many twists and turns over the years. Life is not a linear, step-wise process with a guaranteed upward trajectory for everyone. Industries consolidate, jobs change, accidents and health issues can arise, divorce can happen, and any number of things could occur.

So, with my view, we should not take anything for granted when it comes to money. Hang on to it, because you’ll need it throughout your life for reasons you might not even be able to predict. You never know, so be careful.

Now, this doesn’t mean one should shy away from incorporating risk with investments. Obviously, historical stock returns are much better than keeping all cash! I’ve written quite a bit about stocks before. But when thinking about how we can build and keep wealth, while income generation is where it all starts, if we don’t save money and manage risks, we could be in trouble later.

With the 20-somethings I mentioned earlier, my recommendation would be to save as much as possible when younger. It’s not necessary to spend big time on a dream home or condo, drive a great car, or take exotic vacations all over the place. To the latter point, I do think experiences can matter a lot more than material things, so I’m not suggesting never traveling (I traveled a good deal). Rather, I just think it’s important to focus on saving as much as possible when young, rather that splurging. Have fun with whatever you have left over after meeting aggressive saving goals.

Abundance Mindset

So, his viewpoint was more along the lines of living with confidence in yourself that you’ll always be able to succeed. In his view, by thinking positively, your actions will be positive and subsequently so will your results. Think like a winner with a never-lose mentality, and you’ll never lose. Rather, you’ll be able live a full, rich life without being held back by fears of not having enough money.

To this way of thinking, by being open and willing to live for your enjoyment in the moment, you’re not delaying gratification for some rainy day. Instead, you’re truly making the most of your time. And by doing so, you’ll be more likely to actively take risks in your life that will lead to a better outcome for yourself in terms of making money. Even if you might spend more to enjoy the moment, this mindset would also make its way to your investments, where you would be again willing to take risks that could yield big returns later.

In other words, this is something along the lines of “Life is short, so go big, or go home!”

For the same 20-somethings buying nice condos, cars, vacations, etc – this fits right into this way of thinking. Don’t limit your life, the thinking goes. Get what you want, and be confident in your ability to make it happen in the future as well.

Meet in the Middle?

Yeah, I think it’s probably good to strive for balance, as I think of it more. But ultimately, I’d rather do so while leaning toward the scarcity mindset. So while striving for more and of course living for today, we can plan for tomorrow and save for our future expected and unexpected needs.

So on a scale of 1 to 10, with 1 being the scarcity mindset and 10 the abundance mindset, I’d say I’m at about a 3.5.

My Questions for You

What do you think of these two mindsets?

Where would fall on the 1-10 scale of scarcity vs. abundance?

Best Networking Success Tip for Your Career and Income

best networking tipWhen it comes to successful career moves, it’s often said that networking can make a big difference. Some might say that who you know is more important than what you know.

While I don’t think that universally applies to all situations (after all, a shy introverted medical school graduate is more qualified to be a doctor than an extroverted, well-connected MBA), it can be very important in a lot of situations. Ultimately, it can make the difference between successfully reaching a goal or coming up short in many other cases.

I’m not talking about schmoozing, or being a fake. We all know those types! I simply chuckle at such characters, and have seen some attempts to “network” that were so blatantly disingenuous that they became funny stories to tell others. Perhaps that’s for another post :)

But real, genuine networking matters.

Let’s consider an example. If you interviewed a number of candidates for a job, and were down to two finalists that were well qualified, who would you go with? If one candidate was friends with someone you know, who could vouch for the person, it would be an edge over the other equally qualified you have no direct or indirect connection to. After all, some of your risk might be mitigated by a reference from someone you know.

In many other cases, jobs aren’t even actively advertised. Or, in non-corporate situations, many business opportunities simply aren’t posted anywhere. Who you know matters, in order to even have a chance in many situations.

Okay, so we can see that networking matters. But what are some tips for success?

Well, many of us probably have our own tips. Personally, going through job search mode of late, I’ve improved upon my previous skill level, and would like to think I’ve evolved in this regard. Many years ago I simply had very little interest in investing time in this area, as I thought day-to-day life was busy enough. But the reality is that it should be a part of everyone’s career or business, and time could even be set aside for it on a regular basis.

So here is one big networking tip that I’ll share, from personal experience. Others may say differently, but this is what I have learned. Maybe I’ll start up some more discussion on this in a future post, but we’ll start with this one here

Be a Giver When Networking

One of my friends once told me that networking is a “waste of time” in his opinion, since he thought it was insincere. He expressed the belief that nobody is going to be proactively trying to help you – or sincerely respond to requests for help – if there is nothing in it for them.

Well, I think a good way to alleviate those concerned is to have a giving spirt when networking. Actually, having that approach all the time, not just when you need something, is the way to go.

Let’s say that someone you know had been generous to you on multiple occasions over the years, proactively helping you with various things. It might be introducing you to someone, sharing information with you, or one of many other giving actions. Then, after adding value to your endeavors for a while, let’s say that this person asked you for a small favor.

Wouldn’t you be much more inclined to help this person? Maybe enthusiastically, too?

This 4 step process can be one way to frame it up:

  1. Know
  2. Like
  3. Trust
  4. Help (or refer, buy, etc.)

If you’re trusted by virtue of your delivering real value in a genuine way, you’re in better position to have positives come your way.

I’m not saying we ought to be giving strictly just to get something back in the future. Or, be nice and build credit just to collect later. Rather, it seems like being giving is just a good way to be.

Further, doing it without consciously thinking about specific return on invested favors (did we just coin a new metric here?) is easier all around for everyone involved

Not all of this came naturally to me. It’s an approach I’ve had to develop, but I can see it’s making a positive difference!

Now, I’m interested in your thoughts on this topic.

Do you actively network for your career, business, or general efforts to earn income?

What is your top networking tip?

Do you also believe that proactively giving is a good use of time? I’m of course open to hearing different points of view, so please feel free to share.

Shrewd Ways to Maintain Good Credit

Financing a business can be difficult, particularly for a new business. Business owners may consider raising capital from many sources, including the use of credit cards. Consider these tips to maintain a good credit rating.

Assume that Mountainview Clothing makes heavy duty hiking shorts for the outdoor recreational market. The firm needs cash flow to manufacture shorts during their heavy production period (January and February). Mountainview ships product in early March to meet the heavy demand for outdoor gear in the spring and summer months. Bob, the owner, is considering ways to finance his cash needs in January and February.

Selling equity vs. borrowing

On a basic level, an owner has two ways to raise money to run a business. One way is to sell ownership in your business. The term equity refers to ownership. Bob could sell a percentage of ownership to an investor, in exchange for cash. The new owner, however, would have some say in the future operations of the company.

Mountainview could also borrow money. The lender would insist on a repayment schedule for the principal amount invested, along with a schedule of interest payments.

If Bob decides to borrow, he may have to put up collateral. Collateral is an asset that backs the Mountainview’s repayment of interest and principal. If the borrower cannot make the required payments, the lender may be able to take possession of the collateral and sell it. This protects the lender from losing the money that was loaned out.

The company has a variety of ways to borrow funds. Mountainview may be able to take out a bank loan, using some sort of collateral. The firm may also borrow from an individual investor or take out credit cards.

Lay your options on the table

Taking out debt has its own set of challenges. Bob should consider the interest rate of the debt, and the amount of any required collateral. Secured debts are backed by specific collateral. A home loan, for example, is collateralized by the title to the borrower’s home.

Unsecured debt is backed only by the borrower’s ability to pay. Most credit cards are unsecured debts.

The impact of your credit rating

Several national companies compile data on the borrowing history of businesses and individuals. These companies use this data to compute a credit rating. Your credit rating has a huge impact on your ability to borrow.

It’s important to make smart choices about how you use credit, particularly credit cards. This article provides some tips on credit card use for a business. Below you’ll find some other thoughts on financing a business using credit cards.

Forecasting cash flow to make your debt payments

If you’re going to use credit cards, you need to forecast when cash inflows (customer payments) will be available to make payments. In the Mountainview example, the firm needs to finance production on January and February. Shorts will be shipped to customers (clothing stores) in March.

Mountainview needs to know when customers will make payments. If they all pay within 30 days, the company can expect to pay down the credit cards in late March or early April. If clients pay later- say in 45 to 60 days- Mountainview will not be able to pay down credit card balances until later.

The company needs to be very clear on the payment terms for the cards. If the firm pays late, that could trigger late penalties and much higher interest rates on card balances. Late payments may also be reported to credit rating companies, which lowers the firm’s rating.

Monitoring credit reporting firms

Businesses need to monitor credit rating companies. This practice can help minimize any inaccurate credit reporting- reporting that can lower the company’s credit rating by mistake. Firms need to understand how to communicate with credit rating companies to remove inaccurate information from credit reports.

Correcting errors in your credit report

If your firm has trouble getting a credit report corrected, you may consider hiring a law firm that specializes in this process. Lexington Law lists some of the steps a law firm can take to correct a credit report.

The Federal Trade Commission (FTC) is responsible for enforcing consumer protection laws. A law firm can use consumer protection laws to ensure that a company’s credit report is accurate. An attorney can write letters or call the credit-reporting firm and insist that they remove inaccurate data.

Repeating the process

It’s important to keep all of these factors in mind whenever your business uses a credit card. Carefully forecast when customer payments will allow you to make credit card payments. Monitor credit-reporting agencies for inaccurate reporting. If a credit rating firm refuses to remove incorrect information, consider hiring a law firm that specializes in the credit-reporting field.

These steps will help you maintain your credit rating and maintain the ability to use credit cards with a reasonable interest rate.