How to Deduct Your Travel Expenses

How to Deduct Your Travel Expenses
Travel expenses are a favorite deduction of many clients,
because they love to travel and especially enjoy it when
the IRS is subsidizing part of the expense. In order to
deduct travel expenses, however, you must show that the
expense has a business purpose and is ordinary and
necessary to the business.

Travel expenses that have a business purpose include:

- Meeting customers/prospects/vendors residing in a
different location;
- Searching for investment property;
- Meeting with business partners, both current and
prospective; and
- Holding annual shareholder meetings (usually held in
conjunction with an annual board meeting).

The phrase "ordinary and necessary" generally is defined to
mean, "in the ordinary course of business" and that "the
expense will contribute to the success of the business."

If a taxpayer travels to a destination and while at such
destination engages in both business and personal
activities, traveling expenses to and from the destination
are deductible only if the trip is related primarily to the
taxpayer's trade or business.

If the trip is primarily personal in nature, the traveling
expenses to and from the destination are not deductible
even though the taxpayer engages in business activities
while at such destination. Expenses while at the
destination which are directly related to the taxpayer's
trade or business are deductible even though the traveling
expenses to and from the destination are not deductible.

Whether a trip is related primarily to the business or is
personal depends on the facts and circumstances in each
case. The amount of time during the period of the trip
that is spent on personal activity compared to the amount
of time spent on business is an important factor in
determining the deductibility of the travel expense.
Generally, if business is conducted more than 50% of the
time in an eight-hour business day, the travel expense is
deductible.

Travel expenses incurred on behalf of a spouse, dependent
or other individual accompanying the taxpayer are not
deductible. However, if the spouse, dependent or other
individual is an employee of the taxpayer or there is a
bona fide business purpose, then the travel expense is
deductible.

Travel expenses involving a cruise ship typically are not
deductible. However, they can be deductible if you are
attending a convention on a cruise ship and you can show
that attendance benefits your trade or business. No
deductions for cruise ship expenses are allowed for
meetings related to personal investments, political causes
or other purposes.

There are additional restrictions relating to cruise ship
travel. For example, there is a $2,000 annual limit on
cruise conventions and you must attach a written statement
to your tax return that includes certain facts about the
convention.

Normally, expenses require simple documentation such as a
receipt. However, travel expenses require additional
documentation. If the IRS finds the taxpayer does not have
sufficient documentation, the expense will not be
deductible. The taxpayer must document the amount, time,
place and business purpose of the travel expense.

Sufficient documentation of a business expense includes
receipts, cancelled checks or bills. Although a
contemporaneous log is not required, we normally recommend
that our clients keep an itinerary of the business trip
listing all business activities as documentation of the
travel expense. The log should list all elements of the
expense (e.g., amount, time, place and purpose) as this has
high credibility with the IRS. Documentary evidence, such
as receipts or paid bills, is not generally required for
expenses that are less than $75. However, the IRS has
ruled that all lodging expenses must be documented.

The taxpayer may deduct a standard allowance as set by the
federal government. This is called a per diem deduction.
In lieu of receipts, taxpayer will deduct the per diem
rates. Per Diem travel expense deductions are not allowed
for owners.

Good news for those who hate keeping track of all of those
pesky receipts when they travel. The IRS will allow you to
deduct your meals and incidental expenses for travel away
from home even without receipts. This is their Per Diem
Allowance program.

The way it works is that the IRS has a table indicating the
amount of deduction you can take on a daily basis for meals
and incidentals while traveling away from home. If you
choose to use this flat, per diem amount, you do not have
to keep track of the receipts for these expenses. If you
are not an owner in the business, you can even use the per
diem method for travel and lodging. Owners can only use
the per diem method for meals and incidentals.

Of course, per diem allowances, like deductions for actual
expenses, may be used only if the time, place and business
purpose of the travel are substantiated by adequate records
or other evidence.

The IRS has issued per diem rates based upon the
Continental United States ("CONUS") travel and foreign
travel. New CONUS per diem rates become effective on
October 1 of each year, and remain in effect through
September 30 of the following year. Federal rates are on
the Internet at http://www.gsa.gov/.

If employee expenses are substantiated using a per diem
amount, and reimbursement exceeds the relevant federal
rates for that type of allowance, then the employee is
required to include the excess in gross income. The excess
portion must be reported on the employee's W-2 and is
subject to withholding. However, as long as the
reimbursement amount does not exceed the relevant federal
rates, then the amount is not taxable to the employee!

Other technical rules apply to using per diem rates. Be
sure to work with your CPA to make sure you are following
all of the technical rules before using the per diem method
for documenting travel expenses.

----------------------------------------------------
Tom Wheelwright is not only the founder and CEO of
Provision, but he is the creative force behind Provision
Wealth Strategists. In addition to his management
responsibilities, Tom likes to coach clients on wealth,
business, and tax strategies. Along with his frequent
seminars on these strategies, Tom is an adjunct professor
in the Masters of Tax program at Arizona State University.
For more information please visit
http://www.provisionwealth.com

Making the Most Out of Your Work From Home Business and Affiliate Programs

Making the Most Out of Your Work From Home Business and Affiliate Programs
Affiliate programs are a godsend for budding entrepreneurs
who are seeking to promote their services online. They work
on the simple principle of linking their site to yours,
thus, all of their visitors will most likely be your
visitors as well, increasing internet traffic to your site.
Through affiliating your business website with a well-known
company, you can be assured that its visitors can take it
as an endorsement, thus encouraging them to visit your
site. Affiliate companies are so named because their
product line is similar to yours or complimenting yours.
However, finding the right affiliate program can be
difficult, especially if you are just beginning.

Once you have found the right affiliate program for you,
it's smooth sailing all the way. This method of marketing
is already very popular on the internet. Affiliate
marketing features a website, host, or merchant that allows
you to sell your products directly or indirectly on his or
her website, and you only have to pay for a small amount as
commission.

The host of ads and pop-ups when you surf casually on the
internet serves as proof of how powerful and effective
internet advertising is. Many companies have already ridden
on this "wave of the future," preferring to post ads on the
internet so as to reach a wider target market and save some
money at the same time. Internet advertising is often less
expensive than printing out flyers or paying for spaces on
newspapers, television, or the radio.

In contrast with establishing your company in the real
world, online businesses can already work even if a
relatively lower capital was invested. You don't have to
pay for renting an office space, electricity costs, water
costs, or new equipment when you establish your business
online. You can easily advertise your company and your
services by going to forums or putting your search engine
to work by searching for websites that offer free
advertising space. Some do require a fee for putting your
name on their website, but it is often quite cheaper.

You can get inspiration for a home-based business or job by
looking at websites with user-generated content, such as
Wikipedia. User-generated content (UGC) is all the rage
nowadays due to its openness to collaboration between
anyone and everyone who can contribute information about a
topic. You can work as a professional content writer,
someone who can provide big websites with text that will
make their website more attention-grabbing. As in UGC
websites, you can see that the world is full of different
perspectives and viewpoints, so why not add yours?

----------------------------------------------------
Learn more about work from home based business
opportunities at http://www.homebasedbusinesst.com and find
out how you can become a success online home business
entrepreneur. Also be sure to check out our featured work
at home opportunity in Xocai at http://www.xocaistore.org

Why Smart Brains Make Stupid Decisions On Money, Work and Health

Why Smart Brains Make Stupid Decisions On Money, Work and Health
It happens. Often.

Why?

We just secured an interview with Ori Brafman, co-author of
Sway: The Irresistible Pull of Irrational Behavior
(Doubleday Business, 2008), to discuss our Dark Side (well,
he calls if "different hidden forces" and "psychological
undercurrents").

While reading some reviews about his book, I particularly
enjoyed finding, after the usual impressive long collection
of endorsements, this "disclaimer":

*DISCLAIMER: If you decide to buy this book because of
these endorsements, you just got swayed. One of the
psychological forces you'll read about in Sway is our
tendency to place a higher value on opinions from people in
positions of prominence, power, or authority. (But you
should still buy the book.)

Alvaro Fernandez (AF): Ori, what is SWAY? can you give us a
couple quick examples?

Ori Brafman (OB): Sway is about why perfectly rational
people make irrational choices. We interviewed business
executives, airline pilots, doctors, and even a Supreme
Court Justice to uncover the psychological forces that
affect our decision-making. What was especially interesting
was to find out that we all get swayed, and that these
psychological forces are much more ubiquitous than we
thought.

Take, for instance, the story of Jacob Van Zanten who was
the head of safety for KLM. One foggy afternoon, Van Zanten
took off without getting tower clearance, causing the
biggest airline accident in history. Why would this man,
who's the head of safety make such an irrational choice?

Or look at the story of Harvard Business School students
who paid $204 for a twenty-dollar bill.

AF: Happy to have attended Stanford... Now, how did that
happen?

OB: The professor set up an auction for a $20 bill. But
there was a twist. The winner would get the $20 bill. But
the second place bidder, would still have to honor his bid,
but would get nothing. At first there are lots of bidders,
but then as the bidding approaches $20 people start pulling
out. Inevitably, though two people stay in. As the bidding
continued to rise, the second-place person became
determined to not be the sucker who pays good money for
nothing in return. The amazing thing is that time after
time the auction continues well past the $20 point. People
are just so determined not to lose, that they keep on
bidding up.

AF: Why do people get Swayed?

OB: Without realizing it, we get swept up by a host of
different hidden forces. I think of it like being in a boat
in the middle of the ocean. It may look like we're standing
still, but underneath the surface, undercurrents move us
without us realizing it. The same thing happens with
psychological undercurrents. In Sway, we look at some of
the major undercurrents and explore how they intersect
triggering so many different irrational behaviors. The
thing is that we're prone to psychological sways all of the
time--whether we're conducting a job interview, going out
on a first date, or deciding whether to sell a stock.

AF: Let's be practical for a minute... what can people do
to Sway other people?

OB: We're constantly engaged in a hidden dance of sorts
where we sway people around us and are swayed by others.
One of the most unusual studies we encountered has to do
with what we call the chameleon effect. In the study, a
group of men and women--who had never met each other--were
told to have a short phone conversation. Now, before the
conversation, each man was shown a picture of the woman
he'd be talking to. Unbeknownst to the men, the pictures
were fake. And half the men were shown a picture of a
beautiful woman, while the other half were shown a picture
of a less attractive woman. The pictures had nothing to do
with how the real women looked like, and the real women had
no idea that there were any pictures shown. The kicker is
that the women who the men thought were pretty ended up
sounding beautiful on the phone. And the women who the men
thought were less attractive ended up sounding less
beautiful. We take on the roles others ascribe to us. Think
about that with employees or even with your kids. If we
think someone is smart, there's a good chance they'll live
up to that role.

AF: And what can people do to prevent being Swayed?

OB: The biggest step is to recognize how often we get
swayed. We have a tendency to think that our decisions are
rational, when in fact, different sways may have informed
the decision. Once we realize that we're prone to get
swayed, the second step is figuring out specific strategies
to counter the sway. It ranges from taking a long-term
perspective to using empirical models for job interviews.

AF: For example?

OB: We have a propensity to "diagnose" a job candidate from
the first moment we meet him or her. We assign a diagnosis,
and are unable to see things in a different light despite
objective evidence to the contrary. It's for this reason
that job interviews are terrible predictors of actual
performance. A much more effective approach is to conduct
very structured interviews that don't allow managers to get
swayed. In these interviews, the questions are pre-scripted
and focus on experience and ability rather than vague
things like "what's your biggest strength?" We call these
the Joe Friday interview (just the facts...) These
interviews may seem less personal, but they're actually
much more effective for actually selecting a good candidate.

AF: Ori, thank you very much for your time.

OB: My pleasure!

----------------------------------------------------
Alvaro Fernandez is the CEO and Co-Founder of
SharpBrains.com, which reviews resources to test your brain
and improve cognitive ability. SharpBrains has been
recognized by Scientific American Mind, Newsweek, Forbes.
Alvaro holds MA in Education and MBA from Stanford
University, and teaches The Science of Brain Health at
UC-Berkeley Lifelong Learning Institute. You can learn more
at http://www.sharpbrains.com/

Easy Understanding of Bookkeeping - Part 2 Debit and Credit

Easy Understanding of Bookkeeping - Part 2 Debit and Credit
-- Introduction --

In Part 1, I explained in simple terms the meaning of
Bookkeeping and Double Entry.

In Part 2, I will explain the basis of the Double Entry
System, the Debit and Credit.

-- When to Debit and when to Credit?

The most difficult and crucial part of the Double Entry
System is to know what information or data is to be entered
as a Debit and what information or data is to be entered as
a Credit.

I have known students who when they were starting to learn
accounting and bookkeeping would start by memorising what
to debit and what to credit.

The danger in this is, if they were to come across an item
that they have not come across before and have not
memorised it yet, they will not know what to do with it.

Do I debit or credit?

Everyone that I have taught bookkeeping, I have always
shown them a very simple way to remember this principle of
what to debit and what to credit.

All you have to remember is the D in Debit.

Now think of nothing else in terms of debit and credit.

Just relate D to DEPOSITS.

Right, now we take the example of the $100 Sales in Part 1.

When we receive the $100 cash what will we do?

We would of course DEPOSIT it into the bank.

So, we would DEBIT "Bank Account" and since it is a sale we
would Credit "Sales".

Is that simple enough?

Expanding on this rule, we now can say, since cash is
value, any value coming in would be a Debit.

We have seen the example of a cash sale.

Now let us look at a cash purchase or expense.

When we purchase or spend on something, anything, the value
coming in would be the item itself since cash is going out.

We therefore, debit the item's Account and credit "Cash
Account".

So we would debit, goods purchases, electricity paid, wages
and salaries, rental paid.

Sounds easy enough, but what happens when no Cash is
transacted.

The rule still applies, but the value in or out no longer
goes to Cash Account.

For example, if we were to sell goods to ABC Company on
credit and no cash were to come in, we would simply debit
"ABC Company" instead of "Cash Account".

Here "Cash Account" is substituted with what is known as a
"Debtor Account", in this case "ABC Company".

So the only thing to remember is that any "VALUE" coming in
is to be debited and the corresponding account is to be
credited.

----------------------------------------------------
I have been in Management since the 70s, IT since the 80s
and since the late 90s I began merging all my expertise
into Internet Businesses that includes Accounting Software,
Online Bookkeeping Services, Online Travel Booking System
and Online Shopping Catalog.
To view my products and services go to
http://www.multibizlink.com
To subscribe to any of my FREE tutorial, or for more
information on Bookkeeping email me at
rajaidris@multibizlink.com

Use Price Changes to Make Your Offerings More Appealing in Non-Price Ways

Use Price Changes to Make Your Offerings More Appealing in Non-Price Ways
In many product categories, having a somewhat higher price
is part of establishing a quality image in the minds of
those who buy and use the product. Companies which price
their products based on costs will often miss this point,
and hurt sales volume by having prices that are too low.
How can you use price and non-price methods to enhance the
sales and profits of your offerings?

In the 1970s, Kentucky Fried Chicken usually offered two
kinds of chicken, one produced according to Colonel
Sanders' original recipe and the other made like the
typical "crispy" fried chicken found throughout the
southern United States. Since the crispy chicken had been
offered, both products had been priced the same. The
thought behind this was that the company's competitors
usually sold their crispy products at lower prices, and the
less attention on the price differential the better.

The costs of the two products were such that the original
recipe was actually less expensive to make than the crispy
product. Colonel Sanders had done his homework. He had
designed the product to taste better and to be easier to
prepare. Some people in the company had been considering
cutting the price on original recipe. This would lessen the
price disparity with competitors.

The market research results showed something quite
different. Customers felt that the original recipe product
was a better offering, and thought that it was worth a
premium price. They reported being confused by why crispy
and original recipe were priced the same. They also had
some doubts about the quality of the crispy product, which
created doubts about the quality of original recipe if it
was sold at the same price.

A test was made of charging a five percent premium for
original recipe, along with putting a blue ribbon on the
containers. Volume both increased for original recipe and
for KFC. Consumers reported that the original recipe
quality rose. And it may well have. Knowing that customers
had to pay more for it, the cooks may have paid more
attention. This successful program ran for many years
before parity pricing between the two products was
reintroduced by a new management team.

Introducing a premium-priced brand can make a similar
positive impact on adding profitable market share. Black &
Decker found this out when it added the more expensive
DeWalt line of portable power tools. While many people who
do home-improvements want the least expensive product that
will get the job done, others take pride in their work and
enjoy having the feel and look of top quality tools while
they are working. And those tool lovers will happily pay a
hefty price premium for that sense of being well-tooled.

By offering both brands, Black & Decker can be more
competitive on price with those who care about that feature
of a product offering while being more competitive on image
and quality for those who are more sensitive about those
factors. As a result, the company was able to gain market
share and expand profits even faster.

Where can you use price changes to reinforce a quality
perception?

Copyright 2008 Donald W. Mitchell, All Rights Reserved

----------------------------------------------------
Donald Mitchell is chairman of Mitchell and Company, a
strategy and financial consulting firm in Weston, MA. He is
coauthor of seven books including Adventures of an
Optimist, The 2,000 Percent Solution, and The Ultimate
Competitive Advantage. You can find free tips for
accomplishing 20 times more by registering at:
====> http://www.fastforward400.com .

5 Crucial Points on Working With Recruiters

5 Crucial Points on Working With Recruiters
Today's job hunter faces an increasingly confusing myriad
of choices about how to find that next opportunity, from
where to search for job openings, to how to create an
effective resume or even where to use it. However, there's
one mainstay of the job market that can pay off in huge
dividends for both employers and job seekers: using a
recruiter.

While most professionals are aware that recruiters work to
fill openings from their client companies, few fully
understand exactly how the process works.

Professionals who want to use recruiters as part of their
job search strategy should understand a few key points,
according to Audrey Spencer of ACBS Resource Management,
Inc. A recruiter who specializes in locating candidates
suitable for overseas positions, Spencer notes that one of
the biggest point of confusion centers around the
recruiter's loyalty to the client company over that of the
candidate.

"People often think a recruiter is working for them, and
will say 'That recruiter didn't do anything for me.' That's
when I ask - what did YOU pay the recruiter?" Spencer says.
A core fact of the relationship, she notes, is that the
recruiter is directly fulfilling the needs of the client
company-which is also the organization that pays the
recruiter's fees.

For this reason, she says, you will find some recruiters
may not respond unless a resume is a good fit for the job
orders on that recruiter's desk. Her recommendation?
Remember that you are your own headhunter and should always
put down as much information about your skills as possible.
Have a friend or spouse read your resume to see if they can
then describe your achievements in detail. If not, it's
time to revise it.

In addition, she notes, recruiters often look for very
specific skills per client request. As an example, Spencer
points to her client's strict requirements for junior-level
accountants who are finishing CPA certifications, willing
to make a two-year commitment for placement in Bermuda, and
meet immigration requirements, with an added plus for those
with Sarbanes-Oxley experience.

Spencer offered five additional tips on recruiter
interaction for job seekers, including:

1 - Remember professional courtesy. When you work with a
recruiter, be responsive, returning phone calls in a timely
manner, even if it's only to state that you're not
interested in the position.

Spencer says that you may run across situations where the
same recruiter will have a plum job that fits your
qualifications in a matter of months-and they will remember
your professionalism when it comes to approaching you
again. "Recruiters have very long memories," she says.

In addition, staying in touch over time, perhaps sending a
brief communication every few months, can let the recruiter
know that you are still in the game while maintaining your
network. Don't forget to ask the recruiter if you can pass
along his or her name to other qualified candidates.

2 - Know the difference between retained search and
contingency recruiting. Retained search arrangements are
established so that the recruiter can work exclusively on
that search for the client, where a contingency recruiter
is not exclusive to a search, and the client can be working
with more than one recruiter. Contingency recruiters, she
says, tend to have a higher volume of job orders as well.

Retained recruiters make an estimate of the fee, and bill
for a portion of the fee to initiate the engagement from
the client. Typically, Spencer says, companies that are
looking for very senior-level executives will use retained
search consultants or recruiters.

Remember, too, that when it comes to fees for either
contingency or retained searches, neither recruiters nor
consultants will accept fees from individuals that are
looking for jobs.

3 - Target your resume to the job opening. A general
resume, she says, doesn't tell the recruiter enough about
you for them to see a match between your background and the
client company's needs.

"If a recruiter asks you to add some information to your
resume, listen well," Spencer says, clarifying that there
are often years of perspective behind this advice, and
recruiters tend to know what employers are looking for.

4 - Remember that what you say online can travel-and fast.
Be careful how your opinions are presented, both online and
off. Spencer says she has seen blog postings where
currently employed professionals ask how to find a contact
inside another company.

Don't assume your employer isn't reading what you post, she
cautions, and be aware of who might be reading the blog, as
it is open to many people. She notes that recruiters, in
particular, tend to keep in touch with each other and
compare notes frequently.

5 - Not all recruiters have access to all jobs. "Just
because a company in your area has a job opening doesn't
mean that all recruiters are working with them," Spencer
says. Clients often have a preference for recruiters that
they may have worked with in the past.

In other words, contact other recruiters as needed who
source candidates in your field. This can expand your
network, and help you to spread the word about your search.

Overall, if you want to make the most out of your working
relationship with a recruiter, it's best to understand the
basics before proceeding. Remember that this is a
professional business contact that can serve you well-both
now, and for your future career advancement.

----------------------------------------------------
Resume expert Laura Smith-Proulx of An Expert Resume
(http://www.anexpertresume.com), author of three books on
resumes and job search, has attained a 98% success rate
winning interviews with techniques for a competitive edge
based on her expertise as a former recruiter. Get Laura's
FREE E-Course, "The 7 Biggest Resume Mistakes That Can Keep
You From Your Dream Job... and How to Avoid Them," at
http://www.anexpertresume.com/ecourse_signup.htm .