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Taxation of Commodity Traders

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Mon, 12 Dec 2011 21:32:28 GMT

Commodity Traders are may be taxed under two different methodologies. One I refer to as the "Default Rule" and the other I refer to as the "Mark-To-Market Election Rule".

The Default Rule
Under Internal Revenue Code ("IRC") section 1256, Commodity Traders are granted two major tax breaks:
Tax Break #1
60% of commodity gains are taxed at the long-term gains tax rate and 40% of gains are taxed are treated as short-term gains. This is known as the "60/40 Rule".
Tax Break #2
Commodity trading losses may be carried back three years, to offset prior years commodity trading gains.

In order to meet the definition of a Commodity Trader, for purposes of the above favorable tax breaks, an individual must be a member of a domestic board of trade designated as a contract market by the Commodity Futures Trading Commission (a.k.a. "regulated exchange"). The definition of a commodity under IRC section 1256 includes any regulated futures contract, any foreign currency contract, any non-equity option, any dealer equity option and any dealer securities futures contract. If you trade on a regulated exchange you are a "Commodities Trader" under IRC section 1256 and can avail yourself of the preferential 60/40 Rule.

When such Commodity Traders file their tax returns for the year they report their commodities gains and losses on Form 6781, which is attached to Form 1040 (Federal Income Tax Return for individuals). The gains and losses reported on Form 6781 are split into two groups: 60% long-term gains and 40% short-term gains. The next step is to move these two groups of gains/(losses) over to Schedule D and they are taxed accordingly (long-term gains/losses are netted against short-term gains/losses). If their is a net long-term gain this is taxed at the current favoralbe capital gains tax rate of 15%.

What I just described is the general rule of taxation of Commodity Traders and most Commodity Traders are taxed under this rule. Any expenses you may have incurred (such as margin interest expense) may only be deducted as an itemized deduction and, thus limited.

Mark-To-Market Election Rule
There is another tax option available to Commodity Traders, however. If a Commodity Trader meets the definite of a "Professional Trader" they are eligible to make the IRC section 475 Mark-To-Market election. This new optional rule came into effect in 1997 under The Taxpayer Relief Act of 1997, which gave Commodity Traders the ability to make the Internal Revenue Code ("IRC") section 475 Mark-To-Market election. When you make this election it allows Commodity Traders to do two things:

#1 Treat commodity gains and losses as ordinary income (loss). When you make the IRC section 475 Mark-To-Market election you are eligible to file a Schedule C and list your commodity business expenses. Under this election, commodity business expenses have more value as they are no longer considered itemized deductions but, instead, ordinary business expenses. These expenses can then be used to offset other income you reported, such as wagesWhen you make the Mark-To-Market election, a Commodity Trader is electing out of the 60/40 Rule and, instead, treats all gains and losses as ordinary. The 60/40 Rule is the default rule that is available to Commodity Traders who have not made the IRC section 475 Mark-To-Market election. Most Commodity Traders do not make the IRC section 475 Mark-To-Market election in order to preserve the favorable taxation of commodities (60% long-term gain treatment and 40% short-term gain treatment).

#2 Allow Commodity Traders to take deductions on Schedule C for business expenses associated with your commodity trading business. You can only take deductions on a Schedule C where you have a valid IRC section 475 Mark-To-Market election in place.

In order to be eligible for the IRC section 475 Mark-To-Market election a Commodity Trader must meet the stringent tax definition of a Trader. The "Trader" definition, for purposes of the Mark-To-Market election, requires an individual to seek to profit from short-term changes in the market. This trading activity must be substantial, frequent and continuous. You must be a full-time trader who is trying to capitalize on the momentary swings in the market each day. If you meet the definition of a "Trader" then you are eligible to make the Mark-To Market election, which must be made by April 15th of the current year if you want the election to be effective for the current year. Example: You make the election by April 15, 2012 for tax year 2012. Once in place the election allows you to treat all gains and losses as ordinary (reported on Form 4797, which is attached to your individual income tax return Form 1040).

Commodity Traders cannot take advantage of the 60/40 Rule and take deductions on Schedule C at the same time. It's one or the other. The 60/40 Rule is only available to Commodity Traders who DID NOT make the IRC section 475 Mark-To-Market election. The ability to take Schedule C deductions is only available to Commodity Traders DID make the IRC section 475 Mark-To-Market election.

The Financial Success Equation

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Thu, 22 Sep 2011 23:14:30 GMT

Financial success ain't easy. Very few in America experience financial success. It's a needle in a haystack. The ones who do find financial success in life, however, do so by following a formula. I call it the Financial Success Equation and here it is:

        FINANCIAL SUCCESS = PASSION +HARD WORK + OPPORTUNITY LUCK

This equation is like a linked chain. You need each variable in order to form the linked chain of financial success. If you are missing even on of these variables you will never achieve financial success.

PASSION
The first variable, the first link in the chain of financial success, is Passion. Forget about education, intelligence, genius or creativity. None of that matters when you find passion for something that allows you to make a good living. Obsessive passion overrides all of your deficiencies and renders mistakes irrelevant, except for purposes of better educating yourself in what not to do. Passion forces you to a higher level of intense learning and self-improvement. So when you peel the onion of success down to its core, what you find at the heart is passion. Uncovering that passion in your life will catapult you above every one of your peers and set you flying like a rocket ship, so long as the industry or undertaking you are passionate about is in a lucrative field or industry.

Unfortunately, passion finds very few individuals. Most eke out a living in quiet desperation. When you find your passion, and that passion can be monetized, count your blessings because you are walking along a path very few are privileged to traverse. You have found your heaven on earth.

HARD WORK
The second variable, and link in the financial success chain, is Hard Work. You must work hard at the thing you are passionate about in life. You cannot force a hard work ethic. The work must feel effortless to some degree. Hard work must be something that just happens because your passion drives you to work hard. It is virtually impossible to sustain a hard work ethic in a job, profession or industry for which you are not passionate about. When you are forcing a hard work ethic, that is when you know you do not have the passion for what you do to make money.
Furthermore, working hard in a profession or in an industry that is not very profitable or has low profit margins will never provide the return on investment known as financial success.

OPPORTUNITY LUCK
The most important variable and link in the chain of financial success is luck. Specifically, opportunity luck. This is a type of luck that happens because you have created the opportunity for luck to occur by being passionate about what you do and working hard at it. Opportunity luck is, to a great extent, outside of your control. Opportunity luck is elusive. It is luck after all. It does not manifest itself to everyone who is working hard at something they are passionate about. We all hear the success stories about Bill Gates, Steve Jobs and Warren Buffet. You would not know any one of those individuals if they did not experience opportunity luck in their lives. They could have toiled in their passionate pursuit, until their deaths, and not realized financial success, if it were not for opportunity luck. Just the same, they would not have created the opportunity for luck had they not had a passion and worked hard at their professions. I am paraphrasing Warren Buffet who stated that he was one of the privileged few who won the luck of the draw.

Statistically, financial success will very likely not find you. I can guarantee it will never find you if you are not passionate about what you do for a living because you will never work as hard as you need to work in order to create the opportunity for luck to occur in your life. The point of this entire article is this:

    If you love what you do and work hard at what you love, keep swinging.

Opportunity luck only manifests itself in those who are passionate about what they do and effortlessly work hard at it.

Learn more at http://www.richhabits.net/

Wisconsin - America's Waterloo

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Sat, 26 Feb 2011 17:55:00 GMT

The very fate of our great nation is being decided right now, in Wisconsin. If Governor Scott Walker prevails against the powerful unions, his victory will light a firestorm of state by state revolution across the nation and halt the cancerous spread of Socialism.

Since FDR, America's citizens have been systematically brainwashed by our government into believing it could provide for the retirement and health care needs of its citizens. It also promised generous safety nets, such as the 99 weeks of unemployment benefits our government currently provides. One social program after another, over time, slowly began to transform a growing segment of Americans from a self-reliant citizenry to a government-dependent citizenry. And for nearly 60 years it worked. It worked in large part due to the fortuity of a demographic shift that began when the first Baby Boomer was born and continued until the first Baby Boomer retired, thus ushering in a new detrimental demographic shift. It has become all too apparent in the past three years that America can no longer afford its entitlement programs. There simply is no more money that can be squeezed from the private sector taxpayers.

The battle between government dependence and individual self-reliance is seeing its first major skirmish in the state of Wisconsin. Governor Scott Walker is the villain to those who wish to remain dependent on government and its quasi appendages - the unions. But to the majority of Americans, Scott Walker is an American Hero. He has raced to the front of the line of leaders, not unlike a heroic soldier in battle, and drawn his pistol against America's sworn enemy, Socialism in the form of big government and powerful union representation. Despite the media's relentless efforts to paint Governor Walker as an evil dictator who despises the working class, Americans are not buying it. We agree with Governor Walker. We support Governor Walker. We join Governor Walker in this battle that goes to the very heart of what it means to be an American.

Wisconsin is shining a light on the money laundering machine unions have become. On one end of this machine taxpayers provide the funding for the wages of government employees through taxation. At this end of the machine taxes are laundered into wages. These wages are then transformed into mandatory dues contributed by the enslaved union members. These dues are channeled into the union coffers and spit out the other end of the machine in the form of political contributions to the Democratic party. Taxes, in this money laundering machine, go in one end and come out the other in the form of political contributions to the Democratic party. Democratic politicians then turn around and increase the wages and pension/health benefits of their loyal socialist brethren in these unions.

This cycle has continued for many, many years with wages and benefits growing to the point where we are today; a point in which there are far too many government employees making nearly twice what their private sector peers make. What a scheme. And this scheme has worked well until the private sector ran out of money and could no longer afford its own government. That is where we are today and Wisconsin is the battleground for America's fate. The line in the sand has been drawn by Governor Walker, a modern day George Washington. The fate of this great nation now rests on the shoulders of anti-government revolutionaries in the battleground state of Wisconsin. The battle is waged.

Understanding The Section 179 Depreciation Deduction

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Thu, 24 Feb 2011 15:16:00 GMT

When a business acquires a depreciable asset (capital assets that have a life expectancy of more than one year) the business is required to depreciate that asset over its useful life. Depreciation rules used to be very simple. The business would receive an annual depreciation deduction equal to the cost of the depreciable property acquired divided by its useful life. Then the idea of accelerated depreciation entered the heads of some Congressmen (or rather the lobbyists) and over time, the rules on depreciating property have become one of the most complicated areas in taxation. One accelerated depreciation method added way back in 1958 created what is now called Section 179 Depreciation. This article will address the current rules that are in effect for depreciating property under Section 179.

General Rules:
Rather than having to depreciate property over several years, Section 179 allows businesses to deduct the entire cost of the property in the year of acquisition. In order to qualify, the property must be used more than 50% in a trade or business and must have been acquired from an unrelated third party. The election to depreciate property under Section 179 is made on a property by property basis by completing Part I of Form 4562. There is currently a $500,000 dollar limit on the cumulative amount of the Section 179 deduction a business may take in one year. This maximum deduction is reduced dollar for dollar when the total cost of depreciable property acquired in a given year exceeds $2,000,000.. For example, if your business acquired depreciable property in a single year totalling $2,500,000 you would not be eligible for any Section 179 deduction.

Property Eligible For Section 179 Depreciation:
New or used property is eligible, however, if the property was previously personal use property, it is not eligible. Following is a list of property that is eligible for Section 179 expensing:

Airplanes
Automobiles/Trucks/Vans (Generic - not altered for specific business/industry needs) - limited to $11,060 for cars and $11,160 for trucks and vans
Billboards (if movable)
Computers
Fences used in farming business
Gasoline storage tanks and pumps at retail service stations
Helicopters
House trailers
Livestock
Machinery and equipment
Office equipment (copiers, typewriters, fax machines)
Office furniture and fixtures including file cabinets and book shelves
Off-the shelf computer software
Oil and gas well and drilling equipment
Qualified real property
Signs (if movable)
Certain storage facilities
Store counters
Testing equipment
Tractors
Water wells that provide water for livestock

Property Ineligible For Section 179 Depreciation:
Any property used 50% or less for business purposes will not qualify. Also any property used in rental house or apartment is not allowed. Property used outside the United States is not eligible. Property used by tax-exempt organizations and governmental units is not eligible. Property held in an estate or trust is never eligible.

Air conditioning units
Barns
Billboards/Signs (if not movable)
Bridges
Buildings (Exception if Qualified Real Property)
Car washes
docks
Elevators (Exception if Qualified Real Property)
Sidewalks
Stables
Swimming pools
Tailers (if non movable)
Warehouses
Wharves

I wish to thank the 22 year old Congressional staff members who write the tax code and regulations, the IRS for their incomprehensible explanations thereof and the tax court rulings for making the U.S. income tax system as complex as it is, thus affording me and many other CPAs the opportunity to make a living in a completely unnecessary field.

Passion - The Air That Success Breathes

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Wed, 02 Feb 2011 20:05:00 GMT

What do Benjamin Franklin, Andrew Carnegie, Thomas Edison, Steve Jobs and Mark Zuckergerg all have in common? An intense passion, bordering on a fanatical obsession, for something that they were able to monetize (make money on). These individuals were able to find their passion in life. When you find your passion in life, particularly in an industry or field that has strong profit margins, you will catapult yourself to greatness and untold wealth.This article will share with you some of the insights into how wealthy individuals search for and discover their life's passion.

Forget about education, smarts, creativity, work ethic, motivation, luck, working capital, upbringing or family environment. None of that matters when you find passion for something that affords you the ability to make a living to support your family. Obsessive passion overrides all of your deficiencies and renders mistakes irrelevant, except for purposes of better educating yourself in your passionate activity. Passion forces you to a higher level of intense learning and self-improvement. So when you peel the onion of success down to its core, what you find at the heart is passion. So how do you find that particular activity which consumes you with fanatical passion? Aaaa. That is the right question. How do you find your passion? Answering that question in your life will catapult you above every one of your peers and set you flying like a rocket ship.

Unfortunately, passion finds very few individuals. Most eke out a living in quiet desperation. Or as I like to call it, in living hell. When you find your passion you are in heaven. For the rest of humanity it is off to the fire pits of Hades to live out your insignificant existence until the compassionate embrace of death rescues you from your mortal torment.

But do not surrender just yet for you are very lucky. An individual named Thomas Corley spent five years searching for the very things that help uncover this passion. Not only that, he wrote about his discoveries of the secrets to financial success in his famous book, Rich Habits (https://secure.mybookorders.com/order/multiproduct.aspx?siteid=176 .

What Tom discovered was that passion does not just happen. It does not just show up and announce itself. Passion, Tom discovered, is actually the byproduct of the occurrence of opportunity luck. What Tom uncovered was that in order to find your passion you first need to create the opportunity for luck to occur in your life. Passion is not a fruit you can pick off a tree. It only manifests itself after you have created opportunities for luck. In order to realize financial success in life you need to create opportunities for luck, which will then reveal the activity which will become your obsessive passion for the rest of your life.

So how do you create these opportunities for luck which will lead to your passionate activity?
Now that is the right question. In order to create opportunities for luck in your life you need to do certain things every day. You need to adopt good daily habits, or what Tom calls, Rich Habits. In his five year research study on the daily habits of wealthy and poor individuals, Tom uncovered ten daily habits that set wealthy people apart from everyone else. Anyone who follows these ten Rich Habits, will create the opportunity luck that then gives birth to your passion. Success is a process. There is a reason why many call it the "secret to success". Tom found that the reason why success was a secret was due to the fact that wealthy individuals did not even know why they were successful. It took five years of research to uncover the secrets to financial success embodied in the Rich Habits - The Daily Success Habits of Wealthy Individuals. If you would like to learn more about the Rich Habits buy the book. It's a small investment for the secret to financial success. https://secure.mybookorders.com/order/multiproduct.aspx?siteid=176

How Rich People Use The "Avalanche of Success" Technique to Create Weallth

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Mon, 31 Jan 2011 16:51:00 GMT

Success is not easy. No matter what any self-help "expert" says, no matter what any promoter says, success takes time, persistence, passion and an obsessiveness that borders on fanaticism. Successful people are fanatics and obsessed with whatever it is they do to make money.

Wealthy individuals understand that success is a process. Wealthy individuals do certain things every single day that sets them apart from everyone else and positions them to be financially successful. Oftentimes success takes time and can be a psychological minefield. The ups and downs one experiences in the pursuit of success are impossible to explain. Suffice it to say that this success process requires a dogged determination and a steel mind.

The path toward success requires that you do little things every day. Wealthy people have good daily habits taught to them by their parents, primarily. They incorporate these good daily habits into their daily lives. These good daily habits are part of their toolkit for success. Most individuals (95%) have inadvertently been taught bad daily habits by their parents. This is why most individuals struggle financially, eking out a living and living paycheck to paycheck.

In my five-year research study on the good daily habits wealthy parents pass along to their children, I uncovered ten main daily habits, which i share in my ground breaking book, Rich Habits https://secure.mybookorders.com/order/multiproduct.aspx?siteid=176 . These ten Rich Habits are at the heart of the success process. When you follow these ten Rich Habits you are actually walking in the footsteps of the wealthy. You are processing success into your life. But it takes time and wealthy individuals understand this all too well. Wealthy individuals understand that by following the Rich Habits every day, they are getting closer and closer to the "success event" or what I refer to as the "Avalanche of Success" event.

The Avalanche of Success is a wealth building technique rich individuals use to amass an abundance of wealth. By doing certain things every day, by processing success into their lives through the application of the Rich Habits, wealthy individuals understand that they are actually positioning themselves for an Avalanche of Success event. The Avalanche of Success event is a byproduct of following the Rich Habits every day. Each day you follow the Rich Habits you get closer and closer to the Avalanche of Success event.

Here's how it works. You follow the Rich Habits every day. In time, opportunity luck will manifest itself. In most cases, this opportunity luck will seem insignificant. But over time this opportunity luck builds and builds, like snowflakes on a mountainside. In time, these snowflakes, this opportunity luck, will become so significant that an avalanche will occur in your life. This avalanche is the realization of all of your hard work in diligently following the Rich Habits. The financial reward will seem disproportionate to the daily efforts you put out in following the Rich Habits but that is the reality of wealth creation. It seems obscene compared to your daily efforts. The Avalanche of Success works. Wealthy people have been using this technique for thousands of years to create untold wealth. Thanks to Rich Habits, the playing field is level. You no longer require successful parents in order to learn the secrets to financial success. All that is required is that you read a book. And that book is Rich Habits. Create your Avalanche of Success event. The time is now to begin your new life.

The 2012 Presidential Platform That Will Resurrect The American Dream

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Sat, 29 Jan 2011 17:19:00 GMT

The Rich Habits Institute is supporting our own JC Jobs for the Presidency of the United States in 2012. We hope you will support this great American in his efforts to restore the American Dream. JC Jobs is an international superstar in the self-help, financial success industry. He is the founder of the Rich Habits principles that have been about in the international #1 best selling self-help success book of all time, Rich Habits (https://secure.mybookorders.com/order/multiproduct.aspx?siteid=176 . JC is also a professional speaker and the creator of the most successful success training program in the world. JC Jobs has advised CEOs of Fortune 100 companies, U.S. Presidents, international leaders in China, India, the UK, Australia, Indonesia, Hong Kong, Germany, France and South Korea to name but a few. JC has over 3.5 million "Rich Habits Disciples" in the United States and ten times that in other countries throughout the world. JC has helped nearly 17 million individuals throughout the world rise from poverty to wealth. Through our organization, The Rich Habits Institute, we have worked with JC Jobs in spreading the Rich Habits principles and the ideals of the American Dream to all but one continent.

Below is JC Jobs' announcement of his candidacy for the Presidency of the United States in 2012:

Hello my fellow American patriots. My name is JC Jobs and I am running for President in 2012. I believe I have the requisite skills to restore the American Dream and return our country''s fiscal house to one that will be admired by the world. I believe America is under assault from within. The very politicians we have hired to manage our country's affairs in Congress have, instead, sought to enrich themselves through various lobby groups and special interests whose very existence is to assist these politicians financially in securing their re-election to office. In an effort towards transparency I am setting forth exactly what my agenda (the goals of my administration) will be.

The Agenda of JC Jobs
#1 Cut spending by 1/3 across the board, except for the military, whose budget will be increased 10%. We need to increase military spending in order to stay ahead of China, which I foresee as the number one threat to America's future sovereignty in the world today. These cuts will bring about a much needed fiscal discipline and will restore the United States budget in two years time to a surplus. Of the many cuts I propose the most controversial will be Social Security and Medicare. I will seek the privatization of Social Security and Medicare for those under 50 years of age, the rest being grandfathered. Private retirement accounts and health savings accounts will replace the current systems for those under age 50. Certain departments and agencies will be completely restructured or eliminated. Most governmental agencies were created with good intentions, however, history has proven them to have consistently failed to achieve their initial goals.

#2 Permanent reduction in income tax and estate tax. We shall seek a reduction in the corporate income tax, which will be set at 0% on manufacturing corporations and 10% on all other corporations.Start-up corporations will be subject to a 0% corporate income tax for their first ten years. I will eleiminate the taxatio of dividends and capitals gains. Investment in our economy should be rewarrded and not punished. The individual income tax rate will be set to 10% on gross income in excess of $25,000, which will be adjusted annually in accordance with the rate of inflation. This Gross Income Tax will replace the current individual income tax system. The estate and gift tax system will be permanently eliminated. The estate tax is nothing less than the legalized theft of personal property. The Estate and Gift tax, as such, is a direct affront to the constitutionally guaranteed individual liberties our founders fought so hard to secure for our nation.

#3 Immigration policy will be dramatically restructured. We will seek an open door policy for all immigrants who wish to pursue the American Dream and better their lives. Immigrants, whose primary purpose is to exploit certain benefits intended for its citizens, will no longer be welcome in this country. Those seeking entry into the U.S. will be required to meet certain tests, such as education or education enrollment, adoption of English as the primary language to name but a few. Additionally, this administration will seek to make English the official language of our great nation.

#4 My administration will put an end to all foreign aid except that which is necessary to prevent wars which threaten the sovereignty of the United States or which help prevent widespread disease and human suffering.

#5 We will withdraw all U.S. military forces from venues around the world except those places in which the security of our nation or its citizens would be compromised.

#6 We will seek a constitutional amendment for term limits on Congress of one, six-year term in both houses.

#7 We will seek a ruling from the Supreme Court on the constitutionality of an amendment to permit line item vetoes. If such ruling is in the affirmative we will seek a constitutional amendment permitting the use of line item vetoes.

#8 One of my administration's top priorities will be the creation of 20 million new jobs by the end of my administration's term of office.

#9 We will seek a moratorium on any new legislation for an 18 month period, except that which is necessary to carry on the functions of government. During this time period, a task force will study existing legislation with the objective of reducing by 1/3 federal laws currently on the books.

#10 We will restructure or eliminate the Federal Reserve.The Federal Reserve was conceived and organized with the mission of eliminating economic cycles. It has failed in this regard and has, in fact, been a contributory factor in economic downturns by interfering with the free market system. .

That is my platform,agenda and my administration's goals. Our objective is to return the U.S. to fiscal solvency and foster an economy that is pro-free market, vibrant and empowers individuals and businesses to succeed in achieving the American Dream. We seek to significantly reduce the role of the federal government in the lives of its citizens for generations to come.

I am looking for supporters who share my vision of America. Won't you join me? Those interested can reach out to our election committee as follows:
Email: tom@richhabits.net or
Twitter: RICHHABITS or
Facebook: RICHHABITS or
www.richhabits.net or
send us a message on this blog site http://blog.richhabits.net

Spread the word throughout the land that JC Jobs is running for President in 2012!

The Unnecessary Contradiction Between Education and Entrepreneaurship

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Sun, 23 Jan 2011 14:26:00 GMT

It's an unnecessary reality. In school mistakes and failure are frowned upon. They are things to be avoided at all costs. The byproduct of mistakes and failure in school are bad grades, which impact your ability to get into a good college and get a good job.

Now juxtapose this to the real world of business. In the real world of business mistakes and failure are a prerequisite for success. In fact, there would be no business success if it were not for the foundation upon which such success was built, which is mistakes and failure.

There are four stages of financial success. Stage One is Action. You need to do do something. Stage Two is Mistakes/Failure. You need to make mistakes or fail. Stage Three is Learning. You need to learn from your mistakes and failures. Stage Four is Changing. One you have learned from your mistakes you change your actions. It's a process. Through action you make mistakes, learn from those mistakes and then change your actions.You need to change the way you do things in order to fine tune what it is you do. The ultimate goal is to improve ourselves. Successful people know these stages. Successful people live these stages.

At the heart of the matter is the way our children are educated. Simply put, the template society is using to educate our children is institutionalizing mediocrity and stifiling innovation and entrepreneurship. Our schools are teaching our children to get a good secure job and be good employees. In a land of unlimited opportunity; one in which the American Dream is possible, we are teaching our children to ignore the American Dream and buy into a system in which you get a job, buy a mortgage, spend your money and live paycheck to paycheck. Once you get on this treadmill it's awful hard to get off. It's no accident. Society wants to ensure its employee base. Government needs the steady and measurable federal and state income tax withholding that all employees are required to pay. And our schools, most of which are run by government, are eager to comply.

The fact is ninety-five percent of Americans are eking out a living. They are living paycheck to paycheck. When a recession hits they rely on government handouts (unemployment benefits, welfare) in order to avoid being homeless. The other five percent, however, do not live paycheck to paycheck. They are the wealthy in this country and most are not employees. They are entrepreneurs who take risk, make mistakes, fail, learn, change and make money. This five percent saves for retirement, have nice homes and cars. They go on nice vacations and are able to save for college for their children. This five percent have a financial safety net that guarantees they will not need a government handout to survive. This five percent realizes the American Dream.

Why are only five percent of Americans realizing the American Dream? What are they doing right that the ninety-five percent are doing wrong? After five years of researching this question I uncovered the answer. The top five percent of income earners and asset owners in America have certain, specific good daily habits that the other ninety-five percent do not have. I call these good daily success habits Rich Habits (www.richhabits.net). These wealthy families teach their children certain daily success habits that they take with them into their lives. This five percent teaches their children how to be financially successful in life. In the Jewish community they call these Rich Habits, traditions. The Jewish community passes along to their children traditions that guarantee them financial success in life.

I know what I am talking about. After all I wrote the book on it (Rich Habits - The Daily Success Habits of Wealthy Individuals). I train individuals and companies how to become financially successful My goal is to undo the damage our school system and our government is doing to our future entrepreneurs. I am a CPA on a mission: to end the cycle of financial failure that grips most in our country. By following certain daily success habits, individuals can achieve unlimited financial success. Rich Habits is the play book for the American Dream. If you want to break the cycle of financial failure and reach the American Dream pick up a copy of Rich Habits today. You are worth the small investment. https://secure.mybookorders.com/order/multiproduct.aspx?siteid=176

Deducting Travel As a Business Expense

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Fri, 21 Jan 2011 20:45:00 GMT

As a general rule, travel expenses are deductible as a business expense as long as the expense is considered by the IRS to be an ordinary and necessary business expense. (IRC section 162). But when you incur a travel expense outside the United States, that is when the rules begin to change. Do not assume that 100% of your foreign travel expenses are tax deductible. And better yet, consult with your CPA during the planning phase of your foreign travel in order to maximize your opportunity for a tax deduction.

General Rules Regarding Travel Expenses:
Travel expenses traditionally includes the following categories of expenses associated with at least one overnight stay (i.e. where sleep is required while away from home):
1. Transportation Costs - Transportation includes airplane, train, bus, car, or ship between your home and business destination. It also includes commuter bus, taxi and limousine transportation.
2. Baggage and Shipping Costs- This category includes the cost of sending baggage, samples, display materials between regular and temporary work locations.
3. Lodging Costs - Such costs include overnight hotel stays and temporary housing costs.
4. Meals - Allowable meals expenses include food, beverage, tips and tax. If the meals qualify for a tax deduction they may be 50% or 100% deductible. Meals between employees/employers are generally not deductible unless a business purpose can be substantiated. In cases in which there is a business purpose, the meal is eligible for a 50% tax deduction. Meals also include customer-related meals in which business is discussed (50% deduction). Also allowed are meals related to business-related travel that includes an overnight stay (50% deductible.If the overnight travel is related to an employer-sponsored social or recreational event the meals are 100% deductible. If the meal is related to promotional activities that are made available by the business to the public such costs are 100% deductible.
5. Cleaning - This category includes dry cleaning and laundry expenses incurred during your travel period.
6. Telephone - Business calls, fax costs or other communication costs associated with the business travel are deductible.
7. Tips paid for any travel expense category are allowed as a tax deduction
8. Other - Other costs related to the business travel might include internet fees, computer rental fees, equipment rental fees, supplies etc.

Travel expenses must be temporary in nature. What this means is that the travel period cannot last more than one year. If the travel lasts more than one year all of the travel expenses become non-deductible.

Special Rules:
1. Conventions - In order for travel costs associated with a convention to be tax deductible, such costs must be directly related to your company's business and must benefit your company's business. Conventions outside North America are allowed, however, there is reasonableness test that must be met. Reasonableness is based on the purpose of the meeting, activities taking place at the meeting, activities of any sponsors, homes of sponsors and other material facts and circumstances that the IRS will consider in determining eligibility for the tax deduction.
2. Cruise Ship Conventions - If the convention meets the ordinary and necessary business purpose test and the reasonableness test then the IRS will permit a tax deduction equal to $2,000 per person, per year for travel expenses incurred in connection with the cruise ship convention as long as the ship is a U.S. flagship and all ports of call are located within the United States or its possessions. In order to deduct cruise ship convention travel expenses the business must attach two written statements to their tax return. Statement #1 must be signed by the business owner. This statement specifies the number of hours each day that were devoted to business activities, total days of the trip and the program of business activities on the ship. Statement #2 must be signed by an officer of the cruise ship convention organization and provide detailed schedules of the meetings and the number of hours the taxpayer attended.
3. Travel Outside the United States - Only costs associated with the days in which business was conducted are allowed as a travel tax deduction. Business days include days spent traveling to and from the business destination. Days spent on non-business activities are not counted as business days. Weekends and holidays are considered business days if they fall between the business days. Where part of the foreign travel includes non-business days, travel costs must be prorated by dividing the number of business days by the number of total days. This percentage is then applied to the total travel costs in arriving at the tax deductible travel expense deduction.
4. Non-Convention Cruise Ship Travel - The travel deduction allowed for this type of travel is determined by the IRS every year, so it changes every year. IRS publication 463 lists the daily deductible amounts allowed(called per diem rates). You multiply the per diem rate by the number of travel days in arriving at your tax deductible travel expense amount. If meals are a separate charge you are allowed to deduct 50% of the meal costs in addition to the per diem amount.

I wish to thank the 22 year old Congressional staff members who write the tax code and regulations, the IRS for their incomprehensible explanations thereof and the tax court rulings for making the U.S. income tax system as complex as it is, thus affording me and many other CPAs the opportunity to make a living in a completely unnecessary field.

For more information, please consult with a tax advisor or an attorney.

Depreciating Leasehold Improvements - You Need a Masters Degree in Taxation to Figure it Out

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Thu, 20 Jan 2011 16:53:00 GMT

You would think a simple thing like how to depreciate leasehold improvements would have a simple solution. Unfortunately, Congress has made it a very complex matter. There is currently no one, single method for depreciating leasehold improvements. And there is no one single number of years in which the life of leasehold improvements may be depreciated.

For example, depending on the facts and circumstances, leasehold improvements may be required to be depreciated under the straight line method, or eligible for 50% bonus depreciation, or eligible for 100% bonus depreciation or eligible to be expensed (called section 179 Depreciation Method). Further, a leasehold improvement may be required to be depreciated over 39 years, or 15 years or 1 year or a combination of years.

Why? Why has such a simple matter as depreciating leasehold improvements become so complex? 2010 tax legislation is interfering with other pre-2010 tax legislation and making a mess of things. in 2010, alone, there were six major pieces of tax legislation, the last one being the Tax Relief, Unemployment Insurance Re-Authorization and Job Creation Act of 2010 (2010 Tax Relief Act) (P.L. 111-312), which was passed on December 17, 2010.

But have no fear. Tom Corley to the rescue. I will, as usual, turn the incredibly complex into the incredibly simple. So simple that even Forest Gump would be able to understand and explain it to someone. So here we go....

Options of how to depreciate leasehold improvements:
1. Expense 100% of your leasehold improvements in one year - You may qualify for what the IRS calls section 179 expensing allowance on qualified leasehold improvements. In order to qualify you cannot simultaneously be the landlord and the tenant (called the "related party rule"), you must have a profit, your deduction is limited to your profit, your deduction cannot exceed $500,000 and the leasehold improvement must be any improvement to an interior part of a building that is nonresidential real property in the United States, if all the following requirements are met:

The improvement is made under or according to a lease;
That part of the building is to be occupied exclusively by the lessee;
The improvement is placed in service more than 3 years after the date the building was first placed in service by any person;
The improvement is section 1250 property (think "real estate property" as opposed to computers, furniture etc);
A qualified leasehold improvement does not include any improvement for which the expenditure is attributable to any of the following:

The enlargement of the building;
Any elevator or escalator;
Any structural component benefiting a common area;
The internal structural framework of the building.

2. Expense 100% of your leasehold improvements in one year - You may qualify for what the IRS calls 100% Bonus Depreciation. In order to qualify you cannot simultaneously be the landlord and the tenant (called the "related party rule"), the improvements must have been made after September 8, 2010 and before January 1, 2012 and the improvements were/are/will be "qualified leasehold improvement property" (see definition above);

3. Expense 50% of your leasehold improvements in one year - You may qualify for what they call 50% Bonus Depreciation. In order to qualify you cannot simultaneously be the landlord and the tenant (called the "related party rule"), the improvements were made in 2010 and the improvements were be "qualified leasehold improvement property" (see definition above);

4. Straight line depreciation over a 15 year period for "qualified leasehold improvement property" (see definition above). In order to qualify you cannot simultaneously be the landlord and the tenant (called the "related party rule"), the improvements were made in 2009 or 2010 and the improvements were "qualified leasehold improvement property" (see definition above);

5. Straight line depreciation over a 39 year period for normal leasehold improvement property that does not qualify under items 1 through 4 above. This default rule is required in instances where you are both the landlord and the tenant of the leased property. In these cases leasehold improvements can never be treated as qualified leasehold improvement property. To make things even simpler for you, always assume your leasehold improvement must be depreciated under the straight line method over 39 years unless it meets the definition of "qualified leasehold improvement property" in which case this 39 year general rule would not be required to apply.

I wish to thank the 22 year old Congressional staff members who write the tax code and regulations, the IRS for their incomprehensible explanations thereof and the tax court rulings for making the U.S. income tax system as complex as it is, thus affording me and many other CPAs the opportunity to make a living in a completely unnecessary field.

GOAL REPORT - HOW WEATLHY INDIVIDUALS SET AND REACH GOALS

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Thu, 30 Dec 2010 14:05:00 GMT

www.richhabits.net 1103 Westfield Ave, Rahway, NJ 07065" align=left width=125 height=1060 v:dpi="96" v:shapes="_x0000_s1026">GOALS!

Learn the powerful goal-setting techniques used by wealthy individuals.

By Thomas Corley

___________________________________________

“Ninety-five percent of Americans struggle financially. They eke out a living. They live from one paycheck to the next. They are barely getting by. They are hanging on by a thread. And the saddest thing is that this reality perpetuates itself from one generation to the next. It's what I call the generational cycle of financial failure and I'm out to change that. This disenfranchised group, which makes up most of America, has never been taught by their parents or their schools how to be financially successful in life." By Thomas C. Corley, author Rich Habits – The Daily Success Habits of Wealthy Individuals WWW.RICHHABITS.NET

According to the Internal Revenue Service, only 5% of all individuals who file an income tax return make $150,000 or more per year. That works out to approximately 7.5 million individual tax filers. This 5% group is responsible for paying the majority of the personal income tax the IRS receives each year. This is also the group that has adequate retirement savings, six months worth of monthly income savings for emergencies, little to no debt, college costs funded for their children and/or grandchildren, take nice vacations, have significant home equity in their modest to above average homes, good health insurance coverage and adequate life insurance in the event of death. It is this 5% that many in America call the rich.

To most Americans, rich people keep getting richer. That is a factual truth. But put your petty emotions aside for a moment (jealousy/envy) and ask yourself this question: What is it that these rich families are doing that sets them apart from the rest of America? There is a reason why wealthy families bring up wealthy children and is the reason why this cycle of wealth continues from one generation to the next. And it's not about inheritance. Wealthy families live and pass along to their children something that I call Rich Habits. Rich Habits are the daily good habits of wealthy people. These Rich Habits are used to accumulate wealth and are taught to their children at a very young age fostering a pattern of daily living that they in turn pass along to the next generation.

Conversely, the reason 95% of Americans cannot break out of their cycle of failure is that this group of Americans also pass along generational habits to their children. The difference is that these habits are bad habits. Bad habits that perpetuate from one generation to the next thus, breeding into every subsequent generation a cycle of financial failure. Unfortunately, there is no course taught in our schools on How To Be Financially Successful in Life. Why? Because financial success has always been a secret. That is why they refer to it as the secret to financial success. How can we break this cycle of failure for our children?

I have spent five years researching the daily habits of wealthy people and I have uncovered the secret to financial success which I share in my book Rich Habits (www.richhabits.net). The purpose of this report is to share with you one of those secrets:

Rich Habit #2 – I will set goals for each day, for each month, for each year and for the long-term. I will focus on my goals each and every day.

The Anatomy of a Goal –A Wish is Not a Goal

Far too many individuals fail to achieve their goals. Many who fail to achieve their goals simply give up on goal setting altogether out of frustration or a loss of confidence in the goal-setting process. Why? Why do people fail to achieve their goals? At the heart of the problem is the fact that many who set what they think are goals are not setting goals at all. They are, instead, making a wish. Wishes are not goals. What sets a wish and a goal apart is action. Wishes are wishes because there is no action-based plan underpinning the wish. Goals are goals only when action steps are required to achieve the goal. For example, a typical goal setter may establish a goal of making $100,000 in income for the year. They may even list this "goal" on a goal sheet that they review periodically. As the year moves along they soon begin to realize that they will not get close to making $100,000. This usually occurs mid-year. At that point they often stop reviewing their goals for the year in an effort to avoid reminding themselves of their failure in achieving the goal. Feelings of inadequacy, poor work ethic, lack of focus begin to filter into their minds as a result of missing the goal. That's too bad. It's too bad because the failure in achieving the "goal" has little to do with work ethic or focus or competence. Instead, it has everything to do with misinterpreting a wish for a goal.

So how do we turn our wish of making $100,000 in income for the year into a goal? The first thing we need to do is to create an action plan. An action plan represents the specific steps that are required in order to help you reach your $100,000 earnings target. Let's use the example of a life insurance agent who desires to make $100,000 in commissions for the year. What specific action steps are required in order for a life insurance agent to make $100,000 in commissions for the year? In order to answer that question we need to work backwards and define the steps necessary to reach this financial benchmark.

Step #1     How many average life policies need to be written for the year in order to spin off $100,000 in commissions?
If the average life insurance case generates $2,000 in commissions this means that you will need to close 50 cases for the year. Is this possible? If the answer is yes then you move on to Step # 2.

Step #2    How many individual meetings will you need to have in order to have a shot at closing 50 cases for the year?
If it takes 5 meetings to create 1 closed case then you will need to meet with 250 people during the year. Is this possible? If the answer is yes then you move on to Step #3.

Step # 3    How many phone calls will it take to create 250 meetings for the year?
If it takes 10 phone calls just to get 1 meeting, then the answer is 2,500 phone calls for the year. Is this possible? If the answer is yes then you move on to Step #4.

Step #4    How many phone calls will you have to make every week in order to reach your goal of 2,500 phone calls for the year? Assuming you take four weeks off for the year for various reasons (vacation, time off etc) then that leaves you with 48 weeks to work with. This will require you to make approximately 50 phone calls a week. Is this possible? If the answer is yes then you move on to Step #5.

Step #5    How many phone calls will it take each day to reach 50 calls per week?
Ok, that was an easy one. Ten per day. Is that possible? You bet it is. 10 additional phone calls per day in order to make an additional $100,000 per year in life insurance commissions. Now you have your goal, which is: Make 10 Additional Prospecting Calls Each Day.

You may notice that the above “wish” required a step-by-step analysis in order to turn the “wish” into a goal. The real goal is not to make $100,000 per year (that was the “wish”), but, instead, to make 10 phone calls per day. That action step of making an additional ten phone prospecting phone calls per day is your goal. Pursuing your goal will result in the realization of your wish. The byproduct of achieving your daily goal is that, by year-end, you make an additional $100,000 for the year in life insurance commissions. See how goal setting works? What you have done is taken a "wish" of making $100,000 per year in commissions and broken it down into steps in order to determine what your Real Goal needs to be. By going through this exercise, what you are really doing is creating a mini business plan for each wish, which involves defining the variables for each particular goal. Variables such as the number of policies that need to be written, the number of meetings that need to take place, the number of prospecting phone calls that are needed to create a meeting. Then you break these variable assumptions down into the daily activities required.

In summary, in order to turn a wish into a goal you will need to look at your wishes as the starting point for creating your goals. A wish becomes a goal only when you specifically define the action-based steps that must be accomplished in order for your wish to come true. These action-based steps become your goals.

No action = no goal = wishes don’t come true.

Wealthy people set five types of goals.

Five-Year Goals - These are broad-based initiatives to be accomplished within a five year period and are sometimes referred to as long-term goals. Think of your long-term goals as your "wish list." Create a plan for accomplishing each goal and include the tasks needed to be accomplished. Example- Long-Term Goal Number One: I will buy a house in five years. In order to reach this goal I will save one thousand dollars per month for the next five years. In order to save one thousand dollars per month I will reduce my expenses and deposit two hundred and fifty dollars each pay period into a separate saving account. Think of five-year goals as the tip of the goal pyramid. This is where you want to be in five years.
Next-Year Goals - These are goals you set for next year. This set of goals gets you closer to achieving your long-term goals and, thus, the top of the pyramid. They represent lesser, broad-based goals or objectives that you need to accomplish in order to reach your five-year goals.
Current-Year Goals - These are goals you set at the beginning of the current year. They help move you closer to reaching your goals for next year and, thus, your five-year goals.
Monthly Goals -These are specific initiatives backed by action steps required in order to help you reach your annual goals. At the beginning of each month list monthly goals. These are goals with a realistic probability of being reached by the end of the month. Break down each goal into tasks or steps. The monthly goals could be the number of insurance policies to write that month, or the number of new clients you hope to gain, or a revenue target for the month. These goals might include a project to be completed or an article to be written. Example – Monthly Goal Number One: I will write five life insurance policies this month. In order to achieve this goal I will need to meet with ten prospects each week for the next four weeks. In order for these meetings to occur, I will make fifty phone calls each week, which breaks down into ten calls each day.
Daily Goals - These are sometimes referred to as daily "to-do" lists or daily tasks. Daily goals represent the daily achievements wealthy people seek to attain every day in order to accomplish their broader monthly goals. They are daily activity goals. Wealthy people seek to reach 80% or more of their daily goals. Before you begin each and every day, compile a "to do" list. List only those things you believe you have a realistic probability (80% chance) of completing that day. Prioritize this list and set a specific time in which you will tackle each item. The lower priority items are those that have a low probability (bottom 20%) of being accomplished that day and can be accomplished the subsequent day. You do this in order to build flexibility into your "to do" list to avoid frustration in failing to accomplish the important tasks set for that day. During the day mark off each completed task and congratulate yourself in its accomplishment. At the end of the day evaluate your "to do" list.

Wealthy Individuals Write Down Their Goals

Wealthy individuals write down their goals and set a deadline for achieving their goals. These goals are reviewed frequently and are modified as the facts change in their lives. A little known secret I discovered in studying wealthy individuals is that the wealthy constantly revise their goals and their deadlines. Wealthy individuals understand life is not a fixed, static thing. Things within our lives change and our goals must change as well. Unless a goal is written down along with a specific accomplishment date, it will be forgotten or neglected. You must see your goals every single day.

Daily Affirmations –Wealthy Individuals Create Daily Affirmations Around Their Goals

I uncovered a very powerful technique the wealthy use in achieving their goals. Wealthy individuals utilize daily affirmations as a tool to help them reach their goals. The daily affirmations are constructed in such a way as to be directly related to a specific goal. For example, one wealthy individual used a daily affirmation to achieve his goal of adding solar installations to his company’s product and service offering. In order for this to happen the wealthy business owner needed he and his electrical engineer employees to secure a particular license to do Photovoltaic installations. To help, he created the following daily affirmation using the name of the license he and his group were working toward securing:

I am a limited renewable energy contractor

His goal for his company was to get into the solar cell installation business by the end of the year and he made each license applicant successfully use the above affirmation to motivate each one of them to obtain the license. They all did and his firm became even more profitable.

In order for the daily affirmations to work they need to be in the present tense: I am and they need to represent the future state or future you: a renewable energy contractor. You can use daily affirmations to help you with your goals. If your goal for the year is to increase your sales productivity you can use the following daily affirmation: I make ten prospect phone calls today.

I make is the present tense and the future state is ten phone calls being made by the end of the day.

Daily affirmations only work if they are in the present tense, represent the future you (or future state) and are tied to an action-based goal.

Vision Board –Wealthy Individuals Use Vision Boards to Help Them Achieve Their Long-Term Goals

A useful technique to assist in keeping long-term goals in sight is the use of a vision board. A vision board is an actual picture of long-term goals. This may be a picture of the house you desire to buy, a picture of the business you hope to own one day, or a picture of the type of place you hope to retire to one day. Before he rose to great fame, comedian Jim Carey wrote out a check to himself for twenty million dollars and kept that check in a place where he would see it every day. That check represented a vision board of a long-term goal he desired to achieve one day -- to be paid twenty million dollars for a movie. When the opportunity arose for a leading role in a movie, guess what Jim Carey's demand for compensation was? Twenty million dollars. And he got it!

The Nature of Being a Dream Pursuer

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Mon, 06 Dec 2010 17:19:00 GMT

Some of the most successful individuals in the world are dreamers. Or should I say, dreamers who succeeded. It's not easy being a dreamer and pursuing a dream. Many people are dreamers but few pursue their dreams. Upbringing has a lot to do with that. How you were raised by your parents, for the most part, dictates whether or not you will pursue your dreams. Many parents will tell their children then can become anything they want in life, but then put their thumb down on their children when they feel their children express an interest in pursuing some dream that has an unlikely probability of being realized. The fact is most dreamers who pursue their dreams fail. They fail because they quit. They give up on their dream. They are influenced by those around them to take the well-marked road of life, traveled by the masses, instead of the road that has no markers and, worse, leads you to other roads that also have no markers. You see being a dreamer means you are one of those oddities in life. You are on the outside looking in at everyone else who is doing the safe thing. Being a dreamer is fraught with so many risks, so many variables. It is, quite frankly, a miracle that we have any dreamers at all who pursue their dreams. So, you see, being a dream pursuer is a very rare thing indeed.

Napoleon Hill, author of Think and Grow Rich, was a dreamer. He spent years, uncompensated, interviewing Andrew Carnegie (founder of Bethlehem Steel, at one time the largest steel manufacturer in the world). Mr. Carnegie agreed to share with Mr. Hill, at length, his secrets to financial success. There were many secrets and many lessons to be taught. During this very long and drawn out process of interviewing Mr. Carnegie, Mr. Hill's family and friends urged him to stop wasting his valuable, uncompensated time with Mr. Carnegie and get a job like everyone else. Mr. Hill acknowledges that he considered quitting many times. Only by sheer willpower and a fanatical desire to pursue his dream of uncovering the secrets to success was Mr. Hill able to continue on. Although he wavered, and often, he kept at it. He continued to pursue his dream. It was not easy but we all know how the story ends. Think and Grow Rich is still today a bestselling self-help book. To date, it has sold over 30 million copies. Simply amazing! What would have happened if Mr. Hill listened to his family and friends and quit?

The Downside of Being a Dream Pursuer
There is a cost to being a dream pursuer. It takes a commitment of time to pursue a dream. There may also be a financial commitment. What you lose in pursuing a dream is potential compensation for the time "wasted" on pursuing your dream. You may also lose money invested in pursuing your dream. There is also the emotional turmoil exacted upon the dream pursuer that takes a toll. The ups and downs of pursuing a dream are enough to drive you mad. One minute you sense your dream being realized only to have the rug pulled out from under you. The next minute your dream seems to have gone bust, only to have some event occur that reignites the potential realization of your dream. Dream pursuers know too well what I am talking about here. When your investment in time and money begins to affect your family and, perhaps friends, that is when the pursuit of your dream is challenged. That is when everyone around you will begin telling you it is time to stop pursuing your dream; that you are just wasting your time. You will be told you need to pull your head out of the clouds and stop chasing the brass ring. And these people are all correct. Being a dream pursuer means you are not living your life like everyone else. You are on the outside looking in. Most dreamers end their pursuit when their relationship with their immediate family begins to unravel and come apart. That is when most dream pursuers cut bait. Losing your family is simply not worth the realization of the dream. It just isn't. The dream dies and the dreamer jumps on the road well traveled; family intact.

The Upside of Being a Dream Pursuer
Dream pursuers who succeed become dream achievers. Dream achievers change the world. They are the reason why we have T.V., radio, airplanes, computers, cell phones, software applications, frozen food, toys, no more black death. Dream achievers change the world in which we live and reap untold financial rewards. Rewards that cannot be spent in five generations, let alone one generation. Dream achievers alter the course of humanity. They prove everyone else wrong and the masses jump off the road they were on to jump on the road traveled by the dream achiever.People are sheep. The are risk averse followers of the crowd. That is why when a dream pursuer succeeds, he takes on a new status. He becomes god-like.

If you have a dream you are pursuing, congratulations. I applaud you. Most likely, you will quit at some point. Most everyone does. But I hope you don't. I hope this article gives you the inspiration to continue on; to will yourself to continue pursuing your dream. The world depends on dream pursuers.Without them we would still be living in caves and painting on the walls.

Deducting Automobile Expenses As An Employee

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Sat, 04 Dec 2010 19:38:00 GMT

There are two permitted methods for deducting automobile expenses for employees who are not reimbursed by their employers for the business use of their vehicles:

Actual Method – Actual expenses multiplied by your business use %. Actual expenses include such things as depreciation (if you own the vehicle), or lease expense (if you lease the vehicle), gas, insurance, tolls, registration, repairs and maintenance or

Standard Mileage Allowance – 50 cents (calendar year 2010) per business mile

Only the business portion of the automobile use is deductible under either method. Business use % is determined by dividing business miles driven for the year by total miles driven for the year. Business miles do not include commuting miles. Commuting miles are considered personal, non-business miles. Commuting includes miles driven from your home to your primary office. No matter what method you use, in order to receive a tax benefit, your total business-related auto expense must exceed 2% of Adjusted Gross Income.

For example, assume your total miles in 2010 = 25,000 miles. Assume you commute to your office 3 days a week or 5,000 miles. Assume you travel to customers/prospects either directly from home or from your main office about 10,000 miles in 2010. Business use would be 10,000 divided by 25,000 or 40%. Assume that your lease is $4,000/year, gas = $2,750 per year, auto insurance = $1,200 per year, tolls = $300 per year, repairs and maintenance = $350 per year. Assume your Adjusted Gross Income on your tax return for 2010 = $150,000

Now you have two options:

Actual method business auto expense = $3,440 ($8,600 x 40%)

Standard Mileage Allowance business auto expense = $5,000 (10,000 x 50 cents per business mile)

Obviously the standard mileage allow is greater so that is what you will use. Now, in order to get a tax deduction on your return for 2010, this $5,000 must exceed 2% of your Adjusted Gross income, or $3,000 ($150,000 x 2% = $3,000). Since it does you are entitled to a tax deduction of $2,000 ($5,000 less $3,000 = $2,000). This $2,000 goes on Schedule A, as a miscellaneous itemized deduction and is added to all of your other itemized deductions on Schedule A, which reduce the amount of your taxable income for the year.

I wish to thank the 22 year old Congressional staff members who write the tax code and regulations, the IRS for their incomprehensible explanations thereof and the tax court rulings for making the U.S. income tax system as complex as it is, thus affording me and many other CPAs the opportunity to make a living in a completely unnecessary field.

Man On Fire - One CPA's Mission: To Change The World

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Wed, 24 Nov 2010 09:02:00 GMT

Tom Corley is no ordinary CPA. Sure, like many other CPAs, he works hard for his clients in minimizing their taxes, managing their wealth and advising them in their businesses. But unlike any other CPA, Tom has a burning "man on fire" mission. Tom is out to change the world, or at least most of America. "Ninety-five percent of Americans struggle financially. They eke out a living. They live from one paycheck to the next. They are barely getting by. They are hanging on by a thread. And the saddest thing is that this reality perpetuates itself from one generation to the next. It's what I call the generational cycle of financial failure and I'm out to change that. This disenfranchised group, which makes up most of America, has never been taught by their parents or their schools how to be financially successful in life."

Tom is absolutely convinced that his message, his "discovery" will change the face of America. He is so convinced that he has spent the past 18 months sharing his message with everyone and anyone who cares to listen. "Over the past year I have spoken to perhaps thirty groups made up of high schools, business organizations, churches and entrepreneur groups. I have written a book, articles and blogged over 150 posts this past year. I have spoken to everyone I know. I am literally going door to door to tell my story and share my message."

What exactly is Tom Corley's message that has him so fired up? "I have uncovered the secret to financial success. I have unlocked the key to unlimited wealth creation. I have discovered the holy grail for becoming wealthy." Tom's story began about six years ago when a client, in desperation, requested a meeting with Tom. This client was a small business client who was struggling financially. The fact was, he was failing financially. His bank had just shut down his line of credit and converted the balance into a term loan. With no more available line of credit this small business client was, for the first time in the company's history, unable to make payroll. Nearly twenty employees and their families went without a paycheck that week. "This client was looking for a hail-mary pass in the fourth quarter with three seconds to go in the game and I just could not help him," Tom says. The client then, out of sheer desperation, asked Tom a question that altered the course of Tom's life. And that question was: "what am I doing wrong?" "What the client was really asking me", Tom says, is "why am I failing financially?" What are other successful businesses doing that I am not? What secrets do they possess that I don't?"

This question took Tom down a path that has lasted over six years. "What I decided to do is embark on a research project to find out what wealthy, successful individuals do every day that sets them apart from everyone else. I knew that I would have to get into minutia, their daily habits. I never thought it would lead to an obsession which took up so much of my time," Tom indicated. Over a five-year period Tom asked hundreds of wealthy and poor individuals what became known as his "twenty question list". For another year Tom analyzed the answers from each group and that is when he nearly fell off his chair in his basement office. "I made an incredible discovery. I found a pattern that repeated itself over every question," says Tom. "What I discovered was that each group's response to each question was similar within the group but when I compared one group to the other, their responses were vastly different. In fact, the differences in their responses between the two groups were so different, I knew I had made an historic discovery. I knew right then and there that I had uncovered the secret to financial success."

Tom has since created a training program to teach businesses and their employees these secrets to financial success. Tom has also written a book called "Rich Habits", which shares these secrets to financial success in an entertaining story format. "I wanted to share my Rich Habits but in an entertaining way. I wanted to tell a story of the Rich Habits as opposed to lecture on them. And I accomplished that."

Tom is very confident that what he has discovered will change the world. "I believe my book, Rich Habits, is perhaps the most significant treatise on creating unlimited wealth. I am absolutely convinced that my discoveries will change the very face of our nation. I see it rejuvenating America's stagnated economy. Rich Habits is like putting your financial life on steroids. In time, Rich Habits will be seen as the second most significant book ever written. Second only to the Bible."

To learn more visit: www.richhabits.net or email Tom at: tcc@richhabits.net

Opening a Credit Card Merchant Account

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Thu, 04 Nov 2010 15:00:00 GMT

In today's business environment it is very difficult to survive if you do not take credit cards for payment. It doesn't matter if you are selling a product or service. Credit cards are ubiquitous and used by most everyone. Even those who shun credit cards will use the credit card processing system for their bank debit cards. There is really no escaping the reality: you need to accept credit cards in your business or your competition will eat your lunch. So how do you get started? This article will address the basics of opening a credit card merchant account, the bevy of merchants offering credit card processing services and the associated costs.

BASICS
A credit card processor provides the service of accepting credit cards either through a swipe machine, over the phone or through a Virtual Terminal. Credit card processors charge a fee, known as an Interchange Fee, or Discount Rate. This fee ranges from 1 to 4 percent, depending on charging volume and if you have the physical card present or are taking the credit card information over the phone or through the computer. There are three ways you can take credit cards:
#1 Swipe Machine or
#2 Calling it into the Credit Card Processor or
#3 Utilizing Proprietary Software of the Processor, known as a Virtual Terminal

Very often, retail businesses with high charge volume will use all three methods. Think of the virtual terminal as a web site you access that allows you to enter the credit card number and complete the transaction. Virtual Terminals are beginning to replace credit card swipe machines.

GETTING STARTED
The best place to start is to reach out to your banker. Most commercial banks have a relationship with credit card processors. Your bank's credit card processor business partner will set you up with a Merchant ID from Visa and Mastercard. If you want to accept American Express you will need to reach out to Amex directly (800-528-4800) in order to obtain a merchant ID prior to reaching out to your bank. Alternatively, you can reach out to American Express instead of your banker and have American Express act as your primary credit card processor. American Express will process most of the major credit card, in addition to its own.

MERCHANTS
The following is a short list of the main credit card processors:
#1   Your Bank's credit card processor business partner
#2 American Express
#3   PayPal
#4   Google Checkout
#5   Intuit

COSTS
For business accounts, PayPal charges a monthly fee of $30 as well as a transaction fee that ranges from 2.4 to 3.1 percent. Google Checkout has no monthly fee and transaction fees range from 1.9 to 2.9 percent. one advantage Google Checkout has over other credit card processors is its checkout guarantee. This guarantee protects 98 percent of your sales orders, on average, meaning you will get paid even if the transaction results in a chargeback. Intuit charges $13 per month plus a transaction fee of 1.9 to 2.9 percent. When American Express processes your credit sales it will credit your bank account with a net sales amount. This net sales amount is your gross sales reduced by their transaction fee. For most other credit card processors your bank account will be credited with the gross sales amount and a separate charge will be automatically deducted from your bank account.

For more information on credit card processors go to www.merchantmaverick.com. This site provides information on the various online credit card processors, which includes reviews and a comparison tool.

Tax Efficient Investments

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Wed, 20 Oct 2010 18:50:00 GMT

When it comes to investments there are four types from a tax standpoint:
1. Taxable Investments
2. Tax-Free Investments
3. Tax Advantaged Investments and
4. Tax Deferred Investments

The purpose of this article is to provide an overview of the types of investments that are the most tax efficient.

FEDERAL AND STATE TAX-FREE INVESTMENTS
1.   Municipal Bonds - Exempt from state tax of the state in which the obligations are issued
2.   Municipal Bond Funds - Exempt from state tax of the state in which the obligations are issued
3.   Municipal Bond Trusts - Exempt from state tax of the state in which the obligations are issued
4.   Cash Surrender Value Loans
5.   Roth IRA
6.   Roth 401(k)
7.   529 Plan distributions used for qualified higher education expenses, including room and board
8.   Series I or EE Bonds - Earnings exempt if used for qualified higher education expenses
9.   Coverdell IRA (aka Education IRA) - Earnings exempt if used for qualified education expenses (tuition: elementary school, high
       school, tutoring and college)
10. Earnings on investments held in Health Savings Arrangements used to pay for eligible medical expenses

STATE TAX-FREE INVESTMENTS
1. Treasury Bills
2. Treasury Notes
3. Treasury Bonds
4. Sallie Mae Mortgage Backed Securities
5. EE Bonds
6. I Bonds

TAX ADVANTAGED INVESTMENTS
1.    Real Estate Investments
2.    Rental Properties
3.    Principal Residence - Up to $500,000 ($250,000 if single) of gain excluded
4.    Single Premium Life Insurance Products
5.    Traditional IRAs
6,    Stocks held more than one year
7.    Exchange Traded Funds held more than one year
8.    Mutual Funds held more than one year
9. Vacation Homes
10.  Precious Metals/Collectibles/Coins - 28% maximum long-term capital gains tax rate
11. Real Estate Investment Trusts
12. Qualified Small Business Stock - 50% gain exclusion. Balance subject to 15% long-term capital gains tax

TAX DEFERRED INVESTMENTS
1.   I Bonds
2.   Fixed Annuities
3.   Variable Annuities
4.   EE Bonds
5.   Traditional IRAs
6.   401(k) Plans
7.   403(b) Plans
8.   457 Plans
9.   Qualified Small Business Stock - Proceeds used to purchase new Qualified Small Business Stock
10. 529 Plan Investment earnings are deferred until used for qualified higher education expenses.

I wish to thank the 22 year old Congressional staff members who write the tax code and regulations, the IRS for their incomprehensible explanations thereof and the tax court rulings for making the U.S. income tax system as complex as it is, thus affording me and many other CPAs the opportunity to make a living in a completely unnecessary field.

The Three Principles For Achievement and Unlimited Wealth

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Tue, 19 Oct 2010 19:41:00 GMT

In my five-year study on the daily habits of wealthy and poor individuals I made discoveries that shook me to the core. What I uncovered was nothing less than the secret to financial success. I shared these secrets in my ground breaking self-help book, Rich Habits. In this article I wish to highlight three principles that all wealthy individuals live by in achieving major purposes, or goals, that propel them to great wealth.

PASSIONATE PURPOSE
Ninety-five percent of Americans struggle financially. They eek out a living and live paycheck to paycheck. They do not like their jobs. They have little to no passion for what they do for a living. That's too bad. Passion drives financial success. Without a passion for what you do you will never attain any real wealth. Why? Why is it that most Americans live their lives in quite desperation? The answer is not all that complicated. Most never identify or create a major purpose they wish to pursue in life. Most were never taught to define their major purpose of set their major goal. If you do not have a major purpose or goal in life, you are rudderless. You have no action plan for success. Without a plan or a blueprint for achieving a major purpose or goal, you cannot hope to realize your unlimited potential. But take heart. It is never too late. Today, many are living well into their eighties, so there is always time to define your major purpose. How do determine your major purpose in life? Passion is the answer. You need to look within yourself to find that which you are truly passionate about. Passion is measured by enthusiasm. Find that thing, that purpose, that goal, for which you are enthusiastic about. What makes you enthusiastic and how do you know? Enthusiasm can be identified by performing a function or task that gives you great joy. When that task or function is performed without looking at any clock. When time flies by, you know you are near your major purpose. Pursuing a major purpose or goal without reference to the time involved means you are doing something you truly love. When it does not feel like work, you are on the right track. Wealthy individuals, the top five percent of income earners in America, never feel like they are working. They love what they do and as the end of the day nears, they look forward to tomorrow. They do not wake up that next morning and grumble about the work that lies before them. In order for you to achieve anything great in life you must identify your major purpose in life.

MASTERMIND ALLIANCE
Every wealthy individual I studied relied on a small, close network of individuals who shared their passion for their major purpose or goal. What made Jesus great and the most successful preacher of all time, was not Jesus, but the disciples who shared a common purpose. Without his disciples I doubt anyone today would know who Jesus was. Wealthy individuals understand this all too well. They surround themselves with a brain trust or mastermind alliance whose very existence is to fulfill their major purpose or goal. Without a mastermind alliance, no great purpose can be realized. We are only as great as those we surround ourselves with. In order to achieve your major purpose in life you need to surround yourself with a group of individuals who are as passionate as you are about your major purpose. Andrew Carnegie referred to his core group or advisors as his mastermind alliance. He did not do anything without consulting them. Every move he made was discussed with his brain trust. In order for you to achieve your major purpose you need disciples.

FANATICISM
Wealthy individuals are fanatics with respect to their major purpose. They eat, breathe and live every day in pursuit of their major purpose. Their brain trust eats, breathes and lives every day your major purpose. You and your group must share a fanaticism for the major purpose. Jesus' disciples, Andrew Carnegie's mastermind alliance, Bill Gates followers and Steven Jobs' core group of advisors were all fanatics. When you and your group share a fanatical obsession with achieving your major purpose, pulling the cart becomes much easier. No wealthy individual can pull the cart of their major purpose alone. You need a fanatical group of disciples to accomplish your major purpose or goal.

When you find your major purpose, fanatical disciples will manifest themselves out of thin air to help you achieve your major purpose or goal. That is the best indicator in knowing you have truly found your major purpose in life. Find what you are truly enthusiastic about, make that your major purpose in life, share your major purpose with others, select your fanatical disciples and relentlessly pursue your major purpose.

Federal Government Increases FDIC Insurance Coverage From $100,000 to $250,000

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Tue, 21 Sep 2010 14:59:00 GMT

Effective immediately the federal reform law has permanently increased federal deposit insurance from $100,000 to $250,000. The $250,000 insurance coverage applies to each account category of a depositor per bank. The coverage ceiling was temporarily raised during the financial crisis back in October 2008 from $100,000 to $250,000. It had been scheduled to drop back down to $100,000 at the end of 2013. This law permanently increases the $250,000 coverage.This increase applies to each of four ownership account categories:
1. Individual Accounts and
2. Joint Accounts and
3. Certain Trust Accounts and
4. Retirement Accounts

To maximize FDIC coverage you can hold all four types of accounts at one bank. If you have multiple accounts at different branches of the same bank, the coverage is still limited to $250,000 for all of your bank accounts at the same bank. If you have different accounts at different banks, the $250,000 coverage applies to each separate bank. For example, if you have four checking accounts with $250,000 in four different banks, your total coverage is $1,000,000. If you have four checking accounts with $250,000 in four different branches of the same bank, your coverage is limited to $250,000.

With respect to joint accounts, each joint account owner is separately covered for up to $250,000. For example, if you have a joint checking account at one bank with a $500,000 balance, each owner will be covered up to $250,000.

Creating Wealth and Opportunity Luck Through The Daily Habits of Wealthy Individuals

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Tue, 21 Sep 2010 13:42:00 GMT

Financial success requires luck. Wealthy individuals create their own luck. The good luck created by the wealthy is known as opportunity luck. Opportunity luck is a byproduct of living what I call the "Rich Habits". These are the daily success habits of the wealthy. These are specific things wealthy individuals do, every day, that sets them apart from everyone else. I've articulated these "Rich Habits" in my book of the same title but they are also scattered about in my many articles and blog entries. What is true is that good daily habits, or "Rich Habits", and opportunity luck are two sides of the same coin, with the coin representing financial success. Financial success is elusive. It requires a dedication to living good daily habits in pursuit of a major goal, purpose or project. Without living these daily success habits, opportunity luck is impossible to attain and thus financial success will continue to elude you.

Opportunity luck is everywhere. It is all around us. The problem is that only those who have good daily success habits see them. Unfortunately, most individuals have bad habits. They are never taught the "Rich Habits" of life. The top 5% income earners in this country live the "Rich Habits" every day. Most are taught, at a very early age by their parents, the daily success habits needed to achieve financial success in life. This is why it is true when people say "the rich get richer". The remaining 95% are never taught by their parents or by their schools, these success habits. Thus, they struggle financially their whole lives. A very few somehow recognize this deficiency and break out of this cycle of failure. Through a desire to constantly improve themselves (one of the Rich Habits) these rebels learn over the course of their lives, those good daily success habits that set themselves apart from everyone else. These individuals are few and far between. There simply is no course taught in our school system on how to be financially successful in life. Instead, our children are taught to do well in high school so you can get into a good college and this will enable you to then obtain a good job. Getting a job means joining the "rat race". Our schools are teaching our children to be rats in this rat race. That is too bad.

When you live the "Rich Habits", opportunity luck manifests itself. The "Rich Habits" force you to become "success conscious" and, thus look for opportunities. Oftentimes these opportunities come dressed up in work clothes. Sometimes these opportunities appear in the form of a financial investment or an investment of your time. And sometimes opportunity luck makes its appearance in the form of an ordinary man peddling a product or idea or even as an author trying to promote their book. Opportunity luck is like the air, it is all around us and everywhere. Those who live the "Rich Habits and who achieve unimaginable wealth are the beneficiaries of opportunity luck. Where others are blind, these success-minded individuals, see opportunity luck.

The Importance of The American Dream

TOM@CEREFICE.COM (TOM CORLEY RICH HABITS) — Fri, 17 Sep 2010 10:12:00 GMT

There is more going on here regarding the debate over taxing the "wealthy" than the deficit or the plight of the middleclass. In America we have something no other country on the face of the planet has every had. This something is the reason why the US economy is $14.3 trillion, while our nearest competitor is less than $6 trillion; not even close. This something is the reason why there are 403 billionaires in the US, while our nearest competitor has 62. This something is the reason why immigrants from the four corners of the globe risk life and limb to get to our shores. This something is why millions of Americans start new companies; why entrepreneurship is so strong in the US. What is this something? The American Dream.

The American Dream is the idea that an individual or their family can rise from poverty to wealth in one or two generations. It is the idea that the wealth that we create is ours to keep (property rights). It is the idea for a better life for our children and our children's children. There has been an intentional indoctrination of America's citizens to revile the "wealthy" and castigate them as evil. This is wrong. The wealthy in America are not evil. They are the American Dream achievers. They buy into the American Dream. They risk everything in order to create a better life for their families. The American Dream is responsible for the largest economy the world has ever known.The next time a politician, the media or some pundit opine on the need to tax the "wealthy" more than everyone else, I want you to substitute the phrase "American Dream Achiever" for "wealthy". American Dream achievers, the "wealthy", should not be punished with punitive taxes. They should be held up as true American heros. They are the reason for America's greatness as the world's #1 economy. This group should be honored, not reviled. They should be taxed less, not more than everyone else through lower taxation of business profits, capital gains, dividends and interest income. There needs to be an incentive for those who seek and achieve the American Dream. The US needs to send a message to our children that the American Dream is real and worthy of pursuit. Taxing the "wealthy" more than others is wrong-headed. It's anti-American Dream.