For instance if they buy a vehicle for business or an airplane they get a tax break. Why is this good for everyone? Because if a rich person who owns a business buys an airplane or an automobile then someone gets to have a job in Wichita, Kansas or Detroit or Ohio or Alabama. The people who work in those factories need that job to feed their families and maintain their standard of living and quality-of-life.

It’s unfortunate that more people don’t understand the taxation debate and even more unfortunate that people who do understand the taxation debate who are running for office misrepresent its intentions. Many times Democrats will complain that the tax cuts are too deep and government does not have enough money to give away money to the poor. But in reality the government wastes most of the money that it gets and very little ever gets to the poor people.

It would be better to have a tax cut for the poor people so they could have more money in their pockets to spend for themselves and keep the tax incentives for the rich too. When to poor or middle class people spend the money they would buy things and that too would provide more jobs for Americans. If the government gets all of the money they just waste it on ridiculous social programs and pet projects.

Often the social programs make people weak and this should be well understood by the Christian quote; Don’t Give a Man a Fish Teach Them to Fish. It is just too bad that people do not understand the taxation debate. If they raise our taxes how does that help us? The Democrats want to raise taxes and that would be a disaster for our economy. That just means we all have to pay more money to a government that is going to waste it. And so I ask the question why would anyone want to do that? Please consider all this in 2006.

Tip 1: Use an accounting system

Oh sure. This sounds obvious. But unless you have a decent way to track both your income and your deductions, you not only won’t know how much money you’re making until tax time, you’ll also miss or forget about tax deductions.

Something like Quicken or Microsoft Money will work just fine. If you need more bookkeeping horsepower than these checkbook programs provide, look at stepping up to QuickBooks or Microsoft Small Business Accounting.

Tip 2: Don’t Incorporate

New business owners often rush to incorporate. But incorporation rarely makes sense for small businesses. And incorporation totally complicates your taxes and accounting.

What’s a new business owner to do? Form a limited liability company instead. A limited liability company, or LLC, gives you all the same liability protection. But without the tax complexity of a corporation.

An LLC with just one owner, for example, gets treated for income tax purposes as a sole proprietorship. Which means to report your business activity to the IRS or state revenue folks, all you do is file a simple, one- or two-page schedule with your regular individual tax return.

Tip: Consider hiring your kids

If you have minor children and they help you out in your business—doing real work—consider hiring them. As long as they earn less than $5,000, they won’t pay any income taxes on their wages nor any payroll taxes. Yet, you’ll still get to write-off the amounts you pay them as business expenses. (This might be a neat way to save for a kid’s college expenses.)

Tip 4: Consider hiring your spouse

While medical insurance is a deduction for income-tax purposes for sole proprietors, you can save far more in taxes by hiring your spouse and then setting up what’s called a Section 105(b) plan. Such a plan lets you treat all of your family’s medical expenses (insurance, out of pocket, deductibles and so on) deductions for both income tax purposes and self-employment tax purposes.

If you are interested in this, confer with a local tax practitioner. Section 105(b) plans can be a little tricky to understand if you haven’t used them before.

Tip 5: Take the home office deduction

Hey, if you regularly and exclusively use some portion of your home for your business, go ahead and take the home office deduction.

Don’t worry about this deduction being an audit flag. Or a hassle. The deduction is meant for people like you.

Tip 6: Set up a pension plan

If you want to save more than a regular IRA allows, set up a pension plan for your business. You can easily set up something like a SEP-IRA which will allow you to contribute up to twenty of your profit to a tax deferred account.

Example: If you make $50,000, you could use a SEP-IRA to contribute $10,000 to your pension account. And there are other good low-cost options available, too, such as SIMPLE-IRAs and one-person 401(k) plans.

To get more information on small business pension plans, contact the Vanguard Group at www.vanguard.com or Charles Schwab at www.schwab.com.

Tip 7: Learn and then use TurboTax or TaxCut

A final tip: In most cases, the taxes of sole proprietorship are pretty simple. So, rather than come to someone like me (a CPA) or an enrolled agent or one of those nationwide tax preparation firms, try doing your return yourself using tax software.

Programs like TurboTax and TaxCut work great for simple-situation sole proprietors.

The new bankruptcy law has brought about a number of changes to the filing process. Here are the major ones:

Credit Counseling The new bankruptcy law dictates that anyone who wants to file bankruptcy must complete credit counseling with an agency approved by the United States Trustee’s office. After the bankruptcy case has ended, filers must attend yet another counseling session to learn more about personal financial management.

Restricted Eligibility In the past, it was possible to choose between filing Chapter 7 or Chapter 13 bankruptcy. Under the new bankruptcy law, eligibility for filing Chapter 7 is based on income. A filer’s average income for the six months prior to filing bankruptcy must be below their state’s median income.

Property Values Under old bankruptcy law, those who filed Chapter 7 bankruptcy were allowed to place a value on their personal property based on what they could sell it for at an auction. The new bankruptcy law requires that property now be valued at replacement value. This puts increased value on the property and ensures that more filers will have their property taken and sold by a trustee.

State Exemptions Under new bankruptcy law, your state’s exemptions will apply only if you have lived in the state for two years. If you have been in the state for less than two years, you will receive the exemptions from the state that you lived in previously.

If you can avoid filing bankruptcy, you should. A bankruptcy can seriously affect your ability to get loans and credit for the next seven to ten years. Here are a few other options worth exploring, as well as a few tips on avoiding bankruptcy.

Debt Consolidation If you are overrun by a number of bad debts, you may want to consider getting a debt consolidation loan. This loan can give you the money you need to consolidate all of your debt into one low monthly payment. This will make your bills much more manageable and allow you to start over with a relatively clean slate.

Credit Counseling When you get behind on your bills, it is easy to feel overwhelmed. Though filing for bankruptcy may seem like the easiest option, it may not be the best. If you want to avoid filing bankruptcy, try credit counseling instead. Professional credit counseling services can review your situation and give you advice to help you turn things around.

Tips on What You Can Do To Avoid Filing Bankruptcy In addition to debt consolidation and credit counseling, there are a few other things you can do to avoid filing bankruptcy:

· Try settling your debts. Some creditors may be willing to accept less than what you owe.
· Tighten your belt. Skip the morning coffee, disconnect the cable, clip coupons, and use any money you save to pay off your debts little by little.
· Filing for bankruptcy isn’t free. You’re going to need to save up or get an extra job. Consider using the money you have and the additional money you could earn to begin paying off the bills instead.

If you owned, for example, a vehicle that had an appraised value of $6,650, you could pay $1,000 into your bankruptcy estate and keep your vehicle. (This example assumes that there are no liens against your vehicle; if you owe money against the vehicle, you would have to make pay the lender to keep the vehicle).

If you wanted to pay the $1,000 to keep the vehicle, the money could come from your earnings after you file bankruptcy, or you could borrow the money from friends or family (provided they understood that you were bankrupt). If you owned a vehicle worth $9,650, and you could not afford to pay to your trustee the $4,650 necessary to keep the vehicle, the trustee would sell the vehicle. However, according to the Ontario Executions Act, paragraph 3(3):

Where exemption is claimed for a motor vehicle that has a sale value in excess of the amount referred to in paragraph 6 of section 2 plus the costs of the sale, the motor vehicle is subject to seizure and sale under a writ of execution and the amount referred to in that paragraph shall be paid to the debtor out of the proceeds of the sale.

Therefore if you surrendered the vehicle and the trustee sold it, you would be entitled to receive the first $5,650 of the proceeds, and you could use that money to purchase another vehicle, because paragraph 4(4) of the Executions Act goes on to say that:

The sum to which a debtor is entitled under subsection 3 (1), (2) or (3) is exempt from attachment or seizure at the instance of a creditor.

Here’s a final thought. If you do own a valuable car, instead of going bankrupt and losing it, another option is to file a consumer proposal so that you can keep your car. Clearly this is a complicated area, so if you own a car and are considering filing for bankruptcy in Ontario, you should contact a trustee and arrange for a no-charge initial consultation before you make any decisions.

Time is essential

You need to be very careful when it comes to timing. It is highly improbable that you’ll get approved for a refinance home loan unless at least six months since your bankruptcy has been dismissed have passed. There is no way round this waiting period and you should be very aware of this because applying for a loan and getting declined will affect your credit negatively. Even if the lender doesn’t report the decline to credit agencies the sole credit report pull will affect your credit score negatively.

Credit Requirements

Even though a mortgage loan is a secured loan, bare in mind that a past bankruptcy will show on your credit report when you apply for a refinance home loan. You need to show the lender that you have an impeccable credit behavior since then. In order to do so there are a few things that you should do: Make sure you pay your bills on time and never (absolutely never) miss a payment. This will look good on your credit history. Also, if you can’t get approved for an unsecured credit card, get a secured credit card so you can establish a credit history of timely payments with a credit card.

Searching for the right lender

Finding the right lender is not an easy task, but can be achieved with patience and proper research. Contact as many lenders as possible in order to get loan quotes from them. You can search the net for refinance mortgage loan lenders. However, make sure that by filling their forms you are not authorizing them to pull your credit report. Instead contact someone in the lending institution and ask for an informal quote. You’ll tell him your true credit situation and he will give you an approximate quote. This way you’ll have an idea of what you will be facing but you’ll avoid too many credit pulls showing on your credit report which would otherwise affect your credit negatively.

Once you’ve decided which lender is best for you, you can apply for a refinance mortgage loan. Bear in mind that since you’ve gone through a bankruptcy recently, the interest rate on your loan may be higher than regular home loan, however, if your monthly payments are too high you can extend the loan repayment program in order to reduce them. Once you’ve recovered your credit score you’ll be able to refinance your loan again and get better terms. But in the meantime, this refinance loan will help you improve your credit score and recover from bankruptcy.

Unfortunately, owing to denial, ego or pure ignorance, many sick companies do not seek help till it is very late. Troubled businesses usually try to conceal their problems from others for obvious reasons – the creditors may stop their loans, suppliers may stop supplies, employees may jump ship etc. However, like sick people, sick company need to seek urgent help. They need to engage specialists to facilitate the restructuring programmes and to face the new harsh realities before it is too late.

Much like human health, more businesses are also destroyed by neglect than any other causes. This is why regular health check is vital to prevent any unexpected health problems, detect them early so that appropriate remedies can be administered. The traditional accounting methods such as balance sheets and profit and loss statements only capture the measurable financial aspects of the company at a certain point in time. Furthermore, the real financial health of the company can be masked by deliberate accounting irregularities as in cases at Enron and Worldcom. By the time the sickness is visibly evident in the company’s accounts, it may already be too late to take corrective action to reverse the situation. Oftentimes, when the accounts show red, the company is extremely sick or suffering from haemorrhage. There are many other non-quantifiable financial factors that may impinge upon the health of the company. These may include high staff attrition, low morale or an incompetent CEO.Usually, there are ample warning signs or symptoms of impending trouble. However, these warning signals are often ignored or suppressed; hence the onset of a crisis comes as a surprise.

Early detection of business problems is vital to sustaining a company’s growth, manage the crisis effectively and to contain the economic distress. Business problems rarely occur suddenly. Most problems develop over a long period of time due to a series of financial, legal, operational and strategic errors or miscalculations that went largely ignored or undetected by management. Some obvious examples that a company is heading down the wrong course include persistent operating losses, high key staff attrition, loss of morale and market share.

It is important to pre-empt any problems from arising by looking out for warning signals. Therefore, a proverb that says: “The superior doctor prevents sickness. The mediocre doctor attends to impending sickness. The inferior doctor treats the actual sickness.”

This means that any California bankruptcy filer must have an evaluation of the expenses and their income. By doing so, you can determine if a chapter 13 or a chapter 7 California bankruptcy is right for you. The new bankruptcy laws established in 2005, requires a great many new things, all of which affects the California bankruptcy laws as well.

As a requirement, you must undergo an evaluation. What will happen is that a court official will create a document that details the past six months of income you have received. They will then compare your income with that of the California median income. In order to file a chapter 7 bankruptcy, your income must fall below the median income within California.

However, just because your income does not fall below that level, does not mean you cannot file a chapter 7 bankruptcy, it does mean that other factors will need to be considered in making the determination. However, in most instances, when the income is above the median income level in California, a Chapter 13 filing is necessary.

Before you even consider starting the process of California bankruptcy, you should gather some documents. Things you should have include a list of your property, a list of your debt, a list of expenses, two years of debt, as well as records of finances and income. As you gather your paperwork, make sure you include documentation for outstanding credit card debt or loans, previous tax filing records, titles to automobiles, and titles to any property you own.

The next step in filing a California bankruptcy is to obtain the services of a reputable bankruptcy lawyer. This lawyer can guide you throughout the entire process, as well as aid you in obtaining the necessary forms needed in California to file for bankruptcy. The forms needed are referred to as “schedules”. Schedules help you in obtaining the documents you need in your case.

After you or your attorney has filed the bankruptcy documents, creditors cannot legally contact you in any way regarding the debts you have included in the bankruptcy case.

There are specific and specialized bankruptcy lenders that will work with you and provide you with bankruptcy home loans. However, there are some requirements. For example, in general, you must have at least a credit score of 500 or more, in order for a bankruptcy home loan company to consider you. These lenders will generally bend over backwards to help you in securing a home loan.

Here are some situations that generally apply for those wanting a home loan after bankruptcy:

1. You would likely only qualify for a maximum of eighty-percent financing. What this means for you, is that your down payment will be the twenty-percent that the loan does not cover.

2. It is also a requirement, for those wishing to obtain a bankruptcy home loan, to have a debt-to-income ratio of between forty-five to fifty percentile range.

3. You will likely have a higher interest rate than other people will. This should never stop you from obtaining the home of your dreams. However, as you begin to build your credit back up and improve your rating, you will have the option of refinancing at a later day for a lower rate of interest.

It is the goal of most people, to someday become a homeowner. Even if you have filed for bankruptcy, you are not prevented from achieving that goal in any way. Every one makes mistakes; the key is to learn from them.

You do have options and many mortgage companies are offering people, just like you that have filed bankruptcy a way to finally have their dream home. Bankruptcy is not the end of the world and it certainly does not limit you to only renting. Now, your rent can turn into a mortgage payment.

Once you get the credit card after bankruptcy, it is extremely important that you always make the payment on time, as well as continually pay the balance. Doing so will help you in opening up other roads such as home loans, personal loans, or car loans.

However, it is important to take extreme care when you apply for a credit card after bankruptcy. Avoid jumping at each credit card offered by any company. They may offer the credit cards to you; however, they will come with low spending limits and high interest rates, when compared to those who have not filed for bankruptcy.

You might feel flatterd that these companies are working hard to receive your business, however, avoid being fooled and overextended by their offers. Many companies are well aware of the fact that people who have filed bankruptcy are looking for ways to improve their credit rating; therefore, they may just offer you more than you imagined. Take great care in choosing credit cards and do not allow yourself to fall back into the spiral of debt.

You should have a goal when you obtain a credit card after bankruptcy and it should be to reestablish your credit rating. You should not run out and take a vacation, buy things you do not need, or simply go on a shopping spree. You now have a big negative black mark on your credit report, if you are wanting to rebuild it, you need to take care of your finances, obtaining a credit card after bankruptcy could help you.

Use common sense and restraint when using the credit card. Only make small purchases that you would be able to pay off in full each month. This will greatly help you improve your credit rating and reputation. You may find with this kind of discipline that the company offers to raise the spending limit and reduce the amount of interest charged, after six months.