To File or Not to File - That is the Question (or is it?)

As the econcomy continues to struggle and people start to find themselves making decisions on how to allocate their money, it makes sense that sometimes bills might not get taken care of. As a tax accountant, I have seen this firsthand with my client base.

Unfortunately, we are seeing that an increasingly popular way for people to try to save money is to avoid filing their federal income tax returns! While anyone who has wage income doesn't see much benefit from this tactic, self-employed filers and people who have lots of passive (interest, dividend, and capital gain) income can - at least temporarily - keep some cash in their wallet.

This strategy can provide temporary relief, but here are five good reasons for a taxpayer not to skip filing their tax return - even if they can't pay right away:

1. It can land a person in jail
While not paying taxes is a crime, it's only punishable as a civil offense. A taxpayer can (and will) be penalized, but they can't be imprisoned for simply not paying. This isn't the case when a return is not filed or when a fraudulent return is filed. Failure to file a required tax return is punishable as a criminal offense, which means the taxpayer can be put in jail. It's rare to actually see it happen, but Wesley Snipes, Richard Hatch, or Al Capone will tell you that it does happen.

2. The penalties are much higher when someone doesn't file
IRS will charge "failure to pay" penalties and interest on any balance due to them. These penalties vary, but they usually cap out at about 10% of the balance due. However, if someone does not file their return, IRS will also assess a "failure to file" penalty for each month that the return is late, and it is a much steeper penalty. Failure to file penalties can exceed 25% of the actual tax liability!

3. It can limit a person's ability to get credit or government aid
If someone is not current with their tax filings, the IRS will not turn them in to the credit agencies. However, they can still put the taxpayer in a tough spot financially. Virtually every major loan that someone might apply for requires a copy of the last tax return. Applicants must be current on their tax filings to be able to apply for many forms of government aid, including student loans, housing assistance, and many other programs. Having all returns filed is also a condition for people to be able to file for bankruptcy protection.

4. The IRS will not work with anyone unless they are current on their filings
Usually, when people cannot pay, they think they shouldn't file. However, the IRS has several programs available to assist taxpayers in making arrangements to settle their tax liabilities. The IRS offers payment plans, partial settlements, and even deferred payment arrangements to taxpayers. However, these programs all have one thing in common - a taxpayer must be current on their filings and stay current for as much as ten years in order to qualify for relief.

5. Taxpayers could forfeit a refund
In the event that someone's return would have actually shown a refund, they can end up out of luck. IRS rules say that a return must be filed within three years of its due date or any refund that is generated is forfeited. In my practice, I have had several clients who realized that they were unable to claim large refunds from prior years simply because they waited too long to file. There's nothing worse than leaving money on the table - and to the IRS, no less!

I realize that nine out of ten people who read this are going to be current on their tax filings. However, if you are that tenth person, I urge you to get caught up as soon as possible. Not only will you avoid the potential traps listed above, but you just might sleep a little better at night.

--Dan Musick is the tax services partner for Cook & Associates, a full service public accounting firm with offices in San Marcos and San Antonio, Texas.

Top Five Networking Sites

My recent foray into social and business networking has opened my eyes to a wealth of websites that provide valuable services. This list represents my idea of the top five. Check out what they have to offer:

Facebook
A January 2009 Compete.com study ranked Facebook as the world's most used social network. With over 250 million active users, that’s no surprise. This site can be used to promote yourself, your business, or a cause that interests you....or just to play games and catch up with friends.

Twitter
Have you ever heard the term "micro-blogging"? That’s what a “tweet” is. Twitter allows users to post a message of up to 140 characters on their profile page to update people on where they are, what they are doing, or to share an important message. This page is visible to the author’s “followers”. Use this site to promote a blog or share important information.

LinkedIn
This site allows registered users to connect to people they may know through school or business. The people in this list are called “connections”. This site is often used to find jobs, employees, or business opportunities. It is similar in structure to Facebook, but its focus is strictly business.

YouTube
YouTube is a video sharing website where users can upload and share videos with just about anyone. Unregistered users can watch the videos while registered users can both watch and upload them. Have you heard of Susan Boyle, the British singing sensation? Her performance on Britain’s Got Talent was viewed on YouTube nearly 50 million times!

StumbleUpon
With more than 8 million members, StumbleUpon is quickly gaining popularity. This site uses ratings to form shared opinions on website quality. Users can submit keywords to guide your “stumbles” to sites that have been tagged by other members. If your blog, website, photo, or other post gets a thumbs up from a reader, it will be added to the database for others to stumble upon.

Go forth readers….tweet, follow, connect, view, and stumble.

--LeAnn Carlson is the audit manager for Cook & Associates, a full-service public accounting firm with offices in San Marcos and San Antonio, TX

Why We Do the Things We Do

There was a wonderful article in the Monday, August 24 issue of the Wall Street Journal penned by Meir Statman entitled The Mistakes We Make - and Why We Make Them. The crux of the article was about how investors’ thinking often gets in the way of their investment success.

Today’s blog is the “Cliff Notes” version of the article. We encourage you to read the full article. While the article focuses on investing, it really is about the way we process data. As you read this overview, you may substitute your business, your family or any other activity for ‘investment’. The point of the article is that the mind is a very powerful piece of equipment. The ability to control and harness its incredible power determines success or failure.

Statman begins by posing the question; “How many times have we asked ourselves what was I thinking?”

“…here’s the problem: While we know that we made investment mistakes, and vow not to repeat them, most people have only the vaguest sense of what those mistakes were, or, more important, why they made them. Why did we think and feel and behave as we did? Why did we act in a way that today, in hindsight, seems so obviously stupid? Only by understanding the answer to these questions can we begin to improve our financial future.”

Simply put, our brains are overflowing with emotion. The ability to control this emotion is what determines if we are normally smart or normally stupid. How do we control this situation?

Statman suggests that we need to develop tools. Investors tend to think about each stock they purchase in a vacuum, distinct from other stocks in the portfolio. They are happy to realize ‘paper’ gains in each stock quickly, but procrastinate when it come to realizing losses.

Why do we procrastinate? While we have regrets over a paper loss, we console ourselves in the hope that, in time, the stock will roar back into a gain. This hope would be lost if we actually sold the stock and realized the loss. “So we do pretty much anything to avoid that pain-including holding on to the stock long after we should have sold it.”

Knowing the turbulent waters of the emotional mind Statman offers eight lessons to be learned.

Lesson One: Goldman Sachs is faster than you
“There is an old story about how hikers who encounter a tiger. One says: There is no point in running because the tiger is faster than either of us. The other says: It is not about whether the tiger is faster than either of us. It is about whether I’m faster than you.”

We, as individuals, are not faster than the Goldman Sachses of the investment world. Plan you portfolio for the longer term. Leave the speed to the fast.

Lesson Two: The future is not the past, and hindsight is not foresight (My Favorite)
“The hindsight error leads us to think that we could have seen in foresight what we see only in hindsight.” There are no crystal balls. The only thing we know about hindsight is that is a good evaluator of past events.

Lesson Three: Take the pain of regret today and feel the joy of pride tomorrow
“Stop focusing on blame and regret and yesterday, and start thinking about today and tomorrow.”

Lesson Four: Investment success stories are as misleading as lottery success stories
“We tend to look for evidence that confirms our belief rather than evidence that might refute it.” For example, lottery marketing never talks about the millions of losers, only the few winners. In investing, you will have winners and losers during any period. Focus on the longer term.

Lesson Five: Neither fear nor exuberance are good investment guides

Lesson Six: Wealth makes us happy, but wealth increases make us even happier
Our greatest happiness comes from gains in wealth more than from levels of wealth. Focus on the gain. Frame the positive event. When the average Joe that wins $25 on a scratch-off he is happier than the millionaire whose portfolio went up 1%. “In other words, it’s all relative……Standing next to people who have lost more than you and counting your blessing would not add a penny to your portfolio, but it would remind you that you are not a loser.”

Lesson Seven: I’ve only lost my children’s inheritance
This is a lesson in mental accounting. Mental accounting is a cognitive process that allows us to manipulate our feelings. So here is Statman’s advice: “Ask yourself whether the market damaged your retirement prospect or only deflated your ego. If the market has damaged your retirement prospects, then you’ll have to save more, spend less or retire later. But don’t worry about your ego. In time it will inflate to its former size.’

Lesson Eight: Dollar-cost averaging is not rational, but it is pretty smart
Dollar-cast averaging is a good way to reduce regret and spread risk. Dollar-cost averaging won’t outrun the tiger, but it will distance you from the field. It is not about hindsight, but about foresight. It doesn’t take the pain of investing away, but it does minimize the degree of pain.

As we look back over Mr. Statman’s article, we are reminded that people do stupid things for seemingly rational reasons (emotion). It is our ability to control and harness the mind’s incredible power, however, that determines success or failure.

Steve Cook is the Managing Shareholder of Cook & Associates, PLLC, Certified Public Accountants. The firm offers tax, assurance and business consulting services from its offices in San Antonio and San Marcos, Texas.

"Cash for Clunkers" out of gas

Today is the last day for consumers to cash in on the wildly popular CARS program - that is, if they can find a dealership that will still let them. Problems with the administration of the program have led to many dealers pulling out early.

Under the CARS program, or Cash for Clunkers, people driving older cars would receive a guaranteed trade in allowance of $3,500 or $4,500 for purchasing a new vehicle that met certain fuel economy standards. The way that it works is that the dealership advances these allowances to the buyer and then submits a reimbursement form to the government to get the money back.

At least, that was how it was supposed to work.

Administrative issues have led to many dealers being unable to submit the reimbursement forms, which are due at 8 PM tonight. Many dealers are reporting that the form package is too long and confusing, and that the website for submissions is frequently down. Others claim that there is no one to call for help in completing the reimbursement package and that the printed rules are no help.

To make matters worse, dealers are having trouble collecting on claims that they were able to file. In Virginia, the Automobile Dealers Association estimates that only about 3% of all claims filed have been paid by the government so far. They also estimate that one in four dealers are no longer participating in the program, citing fears of not being reimbursed. These aren't isolated incidents - these types of statistics are being repeated across the nation.

In the end, what seemed like a good deal may be going the way of other "great government social programs" like social security, welfare, or the WPA. The only difference here is that it took years or even decades for these other programs to flounder, but the CARS program is struggling after only a couple of months.

My concern will be what will happen if the dealers end up unable to receive reimbursement. Will consumers start getting bills for an additional $4,500 from the dealerships? If so, how many repossessions will that lead to? Or will the dealerships end up being expected to absorb the costs, placing even more strain on an already struggling industry? Only the future will tell.

In the meantime, what is the moral of this story? I don't know....maybe "if it sounds too good to be true, it probably is" or "no idea is too good for the government to mess it up".

Social Marketing for Businesses

Like most in the Generation Y demographic, I am well versed in the area of technology. I have owned a computer since I was 12 and a mobile phone since I was 15. I am proficient at texting, tweeting, and blogging. I use Facebook, LinkedIn, and MySpace. If these things don’t sound familiar to you, it’s time to get “in the know”!

Sites such as Facebook are no longer just for the young. Log on and you’ll see. There are a multitude of members – from pre-teens to baby boomers to businesses. Businesses, you say? Absolutely! Many companies are now creating “social” profiles to draw attention to their business. These companies are of varying sizes but likely have the same goal – to increase sales through social marketing.

How do you do this? A local bar in the San Marcos area uses the site to post events and drink specials. This free marketing costs the owner nada! This marketing can lead to an exponential grapevine effect, where one member shares the information on a “wall” where many other members can see it and pass it on.

Just how far-reaching is Facebook?

· There are more than 250 million active users
· Over 120 million users log on to Facebook at least once a day
· More than two-thirds of users are outside of college
· More than 5 billion minutes are spent on Facebook each day
· About 70% of Facebook users are outside the United States

If these statistics don’t knock your socks off, continue reading at http://www.facebook.com/press/info.php?statistics . While you’re at it, sign your business up for a profile. You may just find how social marketing can work for you.

--LeAnn Carlson

QuickBooks....is it enough?

Intuit’s QuickBooks is a low cost, easy to use accounting software package popular with many small businesses. If you believe the advertising, installing QuickBooks will make you a CPA, financial analyst, and cost analyst with the flip of a switch. Even better, those nasty accounting problems surrounding inventory, billing and payroll are all things of the past. All you have to do in lock, load and click.

Of course this isn’t true; but, it is amazing the number of people that come to our offices proudly proclaiming that they no longer need our services. They have QuickBooks!

QuickBooks is designed to offer someone with little or no accounting background the ability to record payables and pay bills, and record sales with their related receivables. It is the electronic version of the “check stub” checkbook and the “expandomatic” file folder. In skilled hands, however, it can be more. The software allows business owners to design a chart of accounts with subcategories. This makes it possible to create financial reports by location or product or both. It has a basic inventory management system that can be tied to the billing system. These are nice features, but they have limitations. The payroll system is similar in that it offers a good basic payroll preparation process with payroll tax calculations.

Does this mean that we are anti-QuickBooks? Absolutely not. We encourage our clients to use QuickBooks with our assistance. As CPAs, we want our clients to enter as much data as possible after we set up their chart of accounts and teach them how to properly use the product. When properly used, QuickBooks will offer a good solution for their financial management system.
But the basic QuickBooks program has limitations. It is not designed for a high volume of transactions or multiple users. If the number of simultaneous users exceeds three, you need to start looking for other options. If your inventory and product costing is becoming more complex, then you need to look elsewhere. In short, when your needs become for demanding, you need to look elsewhere. But where should you look?

Depending on your business, you may want to look at QuickBooks Enterprise Solution. This is a more robust version of QuickBooks. Enterprise is better suited to handle multiple users and handle higher volumes of transactions. We have moved clients to the Enterprise Solution product with good success.

Enterprise Solution also has limitations. While it handles more users and more transactions, it still does not handle the specialty accounting areas well. If your business needs are moving in this area, then you are going to have to get your checkbook out. In all likelihood, you will be moving to some type of modular accounting system. In modular systems, you buy the general ledger package and add to that module. Typical installations include billing and accounts receivable, inventory and cost control, payroll and payroll reporting. In a retail environment, you would also add a point of sale module. Each module has its own installation requirements and is priced according to complexity. Sage Software’s MAS 90 is a popular move-up option. As we said earlier, be prepared to write a check. While QuickBooks Enterprise with installation will run about $3,000, the MAS 90 product with installation and training will be an additional $10,000 or more. Once you pass MAS 90 or its competitors, then you get into the expensive custom designed software. These are usually six figure packages that require constant maintenance.

Our message today is that you will need to seek the accounting software that solves your problem. Trying to save money may leave you with too little computing power. Just throwing money at the problem may not create the financial system that you need. We recommend that you steer clear of modules that provide little benefit for the investment. Choose your software wisely. The good news is that there are solutions for every financial system.

TO FIRE OR NOT TO FIRE - What To Do About Troublesome Clients

I recently came across an article in WebCPA about clients who are pains-in-the-you-know-whats (PIAs). Their word, not mine. The author supports the belief that you shouldn’t fire these clients, you should charge them more. I tend to agree. Dealing with rude or impatient clients can certainly be exhausting. However, these people are nonetheless paying clients!

Have you ever been to a restaurant and asked for several substitutions on your order? Did the wait staff grumble or complain? Probably not. They probably just nodded and informed you that it would cost slightly more for the substitution. Did this make you want to leave the restaurant? I doubt it! The restaurant made more money and you left satisfied.

On the other hand, if the staff had grumbled, complained, or otherwise treated you with disrespect, you probably wouldn’t have been as satisfied. In fact, you’d likely never return to that restaurant. You might even tell friends and family about your negative experience, which could prevent them from eating there as well.

This scenario can occur in any type of business. My accounting firm took on a client several years ago who would fall into the PIA category. This client failed to bring in necessary documents when asked, was slow in responding to inquiries, and made our job much harder. Rather than fire this client, we explained the situation and increased his monthly rate. The client didn’t flinch.

You see, he knew he was hard to work with. In fact, he knew that it would be hard to find the same level of service for the same price from some other firm. He’s happy, we’re happy and our bank account is happy.

Moral of the story: Add in the PIA factor when giving price quotes.

LeAnn Carlson

Tiger Woods - The ultimate in "focus"

“Forced focus thinking applies pressure to a group of people or a process to ensure a focused result. Not threatening or invasive pressure – but pressure that focuses the team on actionable outcomes.” EssenceCommunications.com

Tiger Woods and Padraig Harrington put on quite a display of golf Sunday. Tiger kept the pressure on throughout the day, but Padraig, a feisty Irishman and the winner of two majors last year, refused to flinch. Each man exhibited extreme focus as they matched each other shot for shot. The tournament’s outcome turned on two shots. On the 16th hole, Tiger hit an incredible shot. With the hole 170 yards away, tucked in the upper right corner of the green which was guarded by a pond, Tiger hit a majestic 8 iron (yes golfers, an 8 iron) for his second shot. The ball hit and the backspin brought the ball to within two feet of the pin. Padraig’s second shot went over the pin and rolled into the deep greenside rough. With Tiger assured of a birdie, Padraig tried to do the impossible, and failed. His delicate flop shot out of the high grass came out hot and rolled over the green and into the water. The match ended there.

I don’t generally watch a lot of golf on television, but I found myself glued to the tube in sheer awe of their golfing skills. I was mesmerized by their ability to totally and completely focus on the task at hand. Could their unrelenting ability to focus regardless of surroundings be why they are the top two golfers in the world?

Anyone that has ever played golf knows that the ability to focus on a single goal is what creates a successful swing on a repetitive basis. Focused thinking removes distractions and mental clutter. Focused thinking allows us to concentrate on one issue to the exclusion of all other matters. John Maxwell in How Successful People Think points out that focused thinking:

1. Can bring energy and power to almost anything
2. Can give ideas time to develop
3. Can bring clarity to the target
4. Can take you to the next level in your plan development

I am continually looking for motivational materials. The great baseball player Satchel Paige’s famous quote “Don’t look back – they may be gaining on you” is never far from my frontal lobe. I make decisions based on the best information available. I craft a plan to achieve my goal from this information. Then I execute the plan. Not all of my plans succeed. Not all of my plans that succeed prove to be successful. In the end, however, I never look back and question my decision. More often than not my plans are successful. The successful execution of the plan depends on the commitment of my focus.

The better my focus, the fewer are my distractions. Fewer distractions mean a higher probability of success. I focus on the ultimate goal (reward). For Tiger and Padraig, the goal was the tournament title. In business, we set minor goals to achieve the greater goal. At each level, it is our ability to focus – to keep our eye on the ball – that determines our success or failure in achieving that goal.

Focused thinking is not for the clairvoyant. You don’t need to contact the “The Mentalist”. Focused thinking is a learned skill. It requires practice, practice and more practice. So go where Tiger and Padraig go after a round of golf – the practice range!

Steve Cook is managing shareholder of Cook & Associates, PLLC, a certified public accounting firm with offices located in San Antonio and San Marcos, Texas. C+A provides tax, assurance and business consulting services.

Humor in taxation? You bet.....

As a tax practicioner, I sometimes think that I should be cross-trained in several other disciplines. People seem to think that because they are coming to me with their most personal issue - their finances - I should also be privy to other aspects of their personal lives.

In addition to my "normal" role as tax advisor, I have been a counselor, a mentor, a private investigator, and several other things to my clients. Today I want to share some of what I think are my more humorous stories:

Fun With Receipts

Everyone knows that you have to keep receipts to back up your expenses if you get audited. Here are some times that I wish the client hadn't:

-I had a farmer client who was infamous for bringing in some of the filthiest receipts I have ever seen. I used to want to cover my desk with plastic when I worked on his return. Grease, dirt, fertilizer - you name it, it was all over his receipts. The last straw was one year when I opened his envelope and a large cockroach scampered out of his paperwork and across my desk. From that point on, I just requested a summary of his receipts...

-Another client of mine wanted to write off medical expenses, so she included all of her medical receipts in her paperwork. As I was adding up the receipts, I kept seeing the drug name famciclovir. I eventually got curious, so I looked it up - and wished I hadn't. As it turns out, famciclovir is a drug used to treat herpes! I ended up feeling like I knew way too much about this particular client.

-I had a client from the next town over who was a nice little old man. Each year, this 85-year old man would present me with a generous mix of viagra receipts (sometimes ten per month) along with his blood pressure and arthritis medications. This continued up until he passed away some years ago.

Can I Write This Off?

It's truly amazing what some people will tell you if they think it will get them a tax break:

-Nothing comes close to the client who asked me if lunch trips to the strip club were business expenses as long as he talked business with the dancers. It wouldn't have been so funny if it weren't for the fact that his wife was sitting right next to him and didn't know about these trips. I think that might have been a long car ride home for him...

-The most awkward appointments in my career tend to be the ones where the client asks about elective cosmetic surgeries and whether they are deductible (they're generally not). I tend to spend the rest of the appointment wondering what they have had "done." The most uncomfortable experience of my career was when I met with the woman who proudly told me about her enhancements and then asked my opinion on them!

Prove it!

I don't think there is anything people hate more than dealing with the IRS. You've heard stories about how people sign their returns in blood before sending them in, but here are some true stories from my practice that go above and beyond:

-The IRS audited a client of mine who bred rabbits. There had been a plague of some sort that killed a large portion of his stock, so he had a large loss on his return. The IRS audited the return, demanding proof of his losses. I can't verify whether it's true, but he told me that he stuffed four dead rabbits in a box and mailed it to the IRS as proof of his losses! It's not how I would have handled it, but he did get a "no change" audit.

-Another client who traveled extensively received a notice from the IRS that his travel expenses were being audited. He made sure to provide all of the appropriate receipts, but since his travel was international, most of them were in foreign languages!

....and the coup de grace

Finally, this story isn't mine but I have to pass it along. A fellow preparer tried unsuccessfully to e-file a client's return, but it was rejected due to a mismatch in the date of birth of one of her children. The client swore up and down that there must have been something wrong with the computers. She sheepishly called back a couple of days later and admitted that she had the child's birthday wrong - and that she had been wrong about it since he was born! The child was 10 years old and had been celebrating the wrong birthday since day one...


--Dan Musick is the Tax Services Partner for Cook & Associates, a full service accounting firm with offices located in San Marcos and San Antonio, TX

TOP TEN QUESTIONS TO ASK YOUR AUDITOR

The following is a list of some questions you might want to ask an auditor prior to hiring them for the engagement. Find out how Cook & Associates can add value and expertise in your audit.

1. Are you independent?

Auditors must be independent and objective when conducting audits. They cannot have a prior working relationship with your organization or provide in-house services. At Cook & Associates we maintain a professional relationship that keeps your best interest in mind.

2. What is your audit experience?

The managing partner at Cook & Associates has over twenty-five years experience in auditing. In that time, he has performed in excess of one hundred audits of various industries.

3. How will you manage the engagement?

Cook & Associates is staffed with professional and support personnel to provide all necessary services and to maintain personalized involvement with each client. Each audit is overseen by the managing partner. Staff members are directly supervised by the partner to ensure that the goals, objectives, and deadlines are met.

4. What type of reports do I get?

Our firm provides all reports requested by the audited entity. These generally include an independent auditors’ report, audited financial statements, and a report on internal control.

5. What auditing standards are used?

Auditing standards provide measures of quality that can be used to judge the effectiveness of the tests and procedures used to meet the audit objective. Standards for traditional financial audits are known as generally accepted auditing standards (GAAS) and are promulgated by the American Institute of Certified Public Accountants (AICPA) through the Auditing Standard Board.

6. What are your certifications?

Management qualifications: All audit staff at Cook & Associates have received Masters in Accounting. Both partners hold the title of Certified Public Accountant (CPA).
Professional associations: The firm is a member of the San Antonio Chapter of the Texas Society of CPAs. The firm is also a member of the Texas Association of CPAs.
Recognition: The firm has been published in the San Antonio Business Journal.

7. Have you performed audits for our industry before?

Cook & Associates has performed audits for many types of entities, including governmental, nonprofit, department of education, housing and urban development (HUD), and nonpublic organizations. We are well versed in the standards and regulations applicable to each.

8. What is your service approach and methodology?

Cook & Associates thoroughly understands the nature of the work to be performed. We have developed programs and procedures designed specifically for these engagements. Both the partners and the staff will have familiarity with the organization’s operating environment due to their ongoing involvement with other clients.

9. Will you provide constructive feedback?

A management letter is provided to our clients at the end of every engagement. This letter addresses internal control issues, potential areas of improvement, and an overall discussion on the financial health of your entity.

10. Why should we choose your firm?

You need a firm that has extensive audit knowledge, sufficient staffing, and an understanding of your entity. At Cook & Associates we strive to provide top-notch service and present your organization with the reports and feedback it needs to maintain a reliable accounting system.


--LeAnn Carlson

Expose Yourself - to the Big Picture

"A person who knows how may always have a job, but the person who knows why will always be his boss." John Maxwell’s How Successful People Think

As an entrepreneur, I am always looking for tools to help me perfect my craft. I have always enjoyed listening to successful people discuss their approaches to life and business. While at Barnes & Noble searching for a certain book, I came across a small book with the intriguing title of How Successful People Think, by John Maxwell. This blog is a review of the most critical concept in Maxwell’s book – “The Big Picture”. I can’t take credit for the concepts and the relationships, but I freely admit that I endorse his points of emphasis.

In the 50’s, there was a television show entitled The Big Picture. It was a thirty minute show produced and presented by the U.S. Army. The show’s intent was to show the public how small events affected the outcome of major events. It is the entrepreneur’s ability to see this Big Picture that separates him from the manager and employee. These individuals see the work place from their vantage point only. The entrepreneur’s ability to structure an environment where both the manager and employee’s goals are embraced in the company’s big picture determines the overall success of the company.

In his book, Maxwell says “You can find many Big Picture thinkers who aren’t leaders, but you will find few leaders who are not Big Picture thinkers.” The ability to see the Big Picture, to think globally, is what allows leaders to lead.

How does this vision assist the entrepreneur in managing? It allows him to:
1. See the vision before their managers and employees do.
2. Size up and evaluate situations. The big picture view shows possibilities as well as problems.
3. Create a plan to overcome any obstacles and integrate their team in the solution.
4. Create a plan that bridges today with tomorrow.
5. Know when the timing is right to seize the moment.

In short, viewing the company through the prism of the Big Picture allows the entrepreneur to see more broadly and cultivate a plan for success that includes all of his resources.

So how do you become a Big Picture thinker? First and foremost, you must be willing and dedicated to learn from all experiences! Since most people do not feel comfortable outside of their status quo, such a commitment will require a change in your entire approach to life. Big Picture thinkers are willing to try new things, to take chances, and learn from each success or failure.

We encourage you to challenge your way of thinking, to look outside the box, and examine the universe. How Successful People Think is a quick read that will help get you started.

Steve Cook, CPA is the managing shareholder in Cook and Associates, PLLC, a full service CPA firm offering services in tax, assurance, and wealth management with offices located in San Antonio and San Marcos, Texas.

FAQ about the "Cash for Clunkers" program

It’s everywhere you look. “Cash for Clunkers”, or the CARS program, has officially become a hit. Of all of the provisions of President Obama’s stimulus package, this program has unquestionably been the most popular. Most people know the basics, but the specifics can be very confusing. Hopefully, this blog will help some readers find some answers about the CARS program.

Q: How do I know if my old car qualifies as a “clunker”?
A: Any car or light truck that has been rated at less than 18 miles per gallon of fuel efficiency should begin to qualify. It is important to note that the ratings for older cars have been adjusted by the government to meet current standards. To see if your car qualifies, check www.fueleconomy.gov

Q: “Begin” to qualify? What other requirements do I have to meet?
A: Besides the fuel efficiency test, there are several requirements. You must have owned and insured the car for not less than one year. The car must have been manufactured after 1984. The car also must be drivable. Finally, you must have clear title to the car.

Q: What about income? Do I have to qualify financially?
A: No. This program is available to everyone regardless of how much or how little they make.

Q: What kind of car can I buy?
A: You have to buy a new car. It doesn’t matter if the car is foreign or domestic, but the sticker price cannot exceed $45,000. The new car must also meet certain fuel efficiency requirements.

Q: What are the efficiency requirements for my new car?
A: They are based on the difference between your old car and the new one. If the new car gets 4-9 miles per gallon more than your old car, you will qualify for a credit of $3,500. If the new car is 10+ miles per gallon better, you will qualify for $4,500. The thresholds are slightly lower for pickup trucks and small SUVs.

Q: Can I lease the new vehicle, or do I have to purchase?
A: Leasing is an option, but the lease term has to be at least five years and there can be no balloon amount at the end of the lease.

Q: When can I expect to get the rebate check?
A: You don’t. The dealer gives you the price break as a “trade in allowance” when you make the deal for the new vehicle. The dealer will then apply to be reimbursed by the government.

Q: So if it’s really a guaranteed trade in allowance, what if my vehicle is worth more than $4,500? Can I get extra from the dealer?
A: No. This program is intended to provide incentive for people to get really old cars off the roads. The dealer is not allowed to provide any additional trade in allowances for cars under this program. If your vehicle is worth more than $4,500, you’re not going to see any benefit from this program.

Q: What about other incentives from the dealer? Are they allowed?
A: Any other dealer incentive - such as rebates, discounts, or matching funds - are allowed under the program.

Q: Which dealers are participating?
A: A complete list can be found at http://www.cars.gov/dealer/

Q: What happens to my old car after I trade it in? Can I buy it back?
A: No. Any car taken in under this program has to be disabled by the dealer and turned over to the scrap yard for destruction. They don’t want these showing back up on the road.

Q: Can I trade in two “clunkers” and get $9,000 toward a new car?
A: The law reads that only one vehicle per registered owner can be traded in under this program. If more than one registered owner is listed, only one credit will be issued.

Q: Will I be taxed on the amount of the credit?
A: No. The act that creates this program specifically states that it is not to be taxed to the consumer.

Q: When does this program expire?
A: The law says November 1 or when funding runs out. The initial funding has already been exhausted - in less than a week. Congress is working on passing additional funds for the program -the House passed it on Friday and the Senate was working on it today. As popular as the program has been, my best advice is to take advantage as soon as possible.

--Dan Musick