Friday, September 30, 2011

ACCOUNTANTS IN THE MOVIES

In Hollywood, accounting can seem like a retty glamorous profession, or not.

Rick Moranis played Sigourney Weaver's accountant neighbor and admirer Louis Tully in the 1984 comedy classic "Ghostbusters." Possessed by a demonic ghost, Louis is transformed from a mild-mannered accountant into the "Keymaster" and needs the help of Bill Murray, Dan Aykroyd, Harold Ramis, Ernie Hudson and the rest of the ghost-busting crew (along with their Proton Packs). Moranis reprised the role in the 1989 sequel "Ghostbusters II" and hopefully will come out of retirement to appear in "Ghostbusters III," which is set to be released next year.


Thursday, September 29, 2011

D-DAY FOR BRAZILIAN BLOWOUT

Following a letter sent to parent company GIB, September 13 was judgment day for Brazilian Blowout to respond to a letter sent from the FDA, which questioned the safety of the products and threatened legal action if demands were not met.

The FDA is asking Brazilian Blowout to reduce the level of formaldehyde from its products and change the misleading labels and advertising, which state that the products are formaldehyde-free.

In a letter to Mike Brady, CEO GIB, the FDA gave its first official warning, giving the company until September 12 to comply with the FDA’s directives, otherwise the products could be taken off US shelves and further injunctions could be filed against the company.

In tests, conducted by both the FDA and the Occupational Safety and Health Administration dangerous levels of the liquid form of formaldehyde, ranging from 8.7% to 10.4%, were found.

Industry debate
Formaldehyde is commonly found in a number of “Brazilian style” keratin-based hair straighteners, and has been listed as a carcinogen by the FDA, although Brazilian Blowout denies unsafe levels in its products.

Michael Roosevelt, acting director in the FDA’s Office of Compliance states in the letter to the company: “Brazilian Blowout is an adulterated cosmetic because it bears or contains a deleterious substance that may render it injurious to users under the conditions of use prescribed in your labeling.”

He continued: “Brazilian Blowout contains the liquid form of formaldehyde, methylene glycol; however, the product label declares that the product contains ‘No Formaldehyde’ of is ‘Formaldehyde Free.’ This declaration renders your product misbranded because it is a false and misleading statement.”
In a string of controversy lasting over a year, the FDA has been urged to recall Brazilian Blowout and similar products.


However, the FDA can only issue a “voluntary recall,” meaning that the government cannot mandate the removal of dangerous products from the market. These regulations are under scrutiny, and are being rectified in the Safe Cosmetics Act of 2011, which is currently being debated in Congress.

Brazilian Blowout’s plant-derived cousin

Meanwhile Brazilian Blowout has launched its latest hair straightening product, the Zero smoothing treatment which it states is a plant-derived Kerasafe bonding system which contains no formaldehyde.

It is applied in the same way as the original Brazilian Blowout treatment and the company claims the result is exactly the same.

When questioned on whether this launch means the original treatment will be discontinued or whether it questions the safety or integrity of this treatment, the company states it is 100% confident of the original treatment and is backed by its worldwide popularity, and will remain on shelves.

However, according to the FDA letter, GIB will only be able to keep selling the product if the ingredients list is specifically modified to exclude any form of formaldehyde. Failure to do so could result in the seizure of Brazilian Blowout products, and legal proceedings against the company.

Wednesday, September 28, 2011

LONGTIME PARTNER


I have to take a few minutes and pay tribute to Bob Sylvester CPA who died September 23, 2011.




Bob Sylvester was a former partner of mine and a close friend. Bob had been ill for some time and he was in hospice for the past few weeks. Bob and I go way back. In 1972, Bob gave me a chance and hired me as new junior accountant with the firm of Lindell, Sylvester Lindell. He was my mentor and taught me a lot about business. Eventually we became partners to form Kopsa, Swanson & Sylvester accounting firm. In 1999, Bob became sick and retired to enjoy his family. Much of the success that I have had is attributable to valuable lessons from Bob. He will be missed.

To read more about Bob's life: Robert Sylvester

YOU MAY WANT TO UNWIND YOUR ROTH CONVERSION

Many taxpayers elected in 2010 to convert their regular IRA to a Roth and either pay the tax in 2010 or spread it out over 2011 and 2012. If you converted your Roth as long as you timely filed your income tax return or got an extension to October 15, 2011, you have until October 17th “unwind” the conversion and treat it as if it never happened.

The primary reason for considering this is the drop in stock prices from 2010 until now. By unwinding the conversion, you may be able to then redo the conversion and save substantial tax this year.

For example, let’s assume a taxpayer had $500,000 in his IRA on June 1, 2010 when he converted it into a ROTH. Now, let’s assume the value of the ROTH is only $300,000. By unwinding the ROTH conversion, the taxpayer does not pay tax on the difference between the $500,000 last June and the $300,000 value now. At the highest tax bracket including applicable state income taxes, the total tax savings could approach $100,000.

Remember, you only have until October 17, 2011 to unwind this conversion

Saturday, September 24, 2011

BRAZILIAN BLOWOUT BEING SUED FOR $5M OVER BEAUTICIAN CLAIMS

Hair care company Brazilian Blowout is being sued in Manhattan Federal Court for $5m by a beautician who is claiming she was sickened by using one of its hair care products, although the company has denied the allegations.

According to the article in The New York Post, Dana Lulgjuraj says she suffered ‘physical injuries’ while defrizzing hair with the Brazilian Blowout product last year at a salon in the Flatiron District in New York.

It is not the first time the hair care products have come under scrutiny, following concerns raised last year over the levels of formaldehyde omitted through use of the products. (Formaldehyde is a colorless, flammable, strong-smelling chemical that is commonly used as a preservative in some consumer products including hair care products.)

It was thought those that were most at risk of irritation were those who worked closely with the substance for long periods of time such as salon workers, and earlier this year the US government listed the substance as a carcinogen, although not in direct relation to just hair care products.

Lulgjuraj has not detailed what her ‘physical injuries’ were, and the California-based manufacturer GIB has denied the allegations. GIB was in the spotlight last year for the formaldehyde omitted from its products which it says were due to confusion between the substance and methylene glycol. However, experts from the Cosmetic Ingredient Review panel say that the two exist in equilibrium and that adding methylene glycol to water will create formaldehyde and vice versa.

Formaldehyde was then put under review by the specialist industry panel, and the US government made its announcement in June this year. At the same time GIB also filed a lawsuit against the Oregon Occupational Safety and Health Administration for damages against the company due to the claims being made, but this was later dropped.

Thursday, September 22, 2011

ACCOUNTANTS IN THE MOVIES

In Hollywood, accounting can seem like a pretty glamorous profession, or not.

Charles Grodin plays Jonathan "The Duke" Mardukas, an accountant for the Mob who gets nabbed by bounty hunter Jack Walsh, played by Robert De Niro in the 1988 comedy-action hit "Midnight Run." To collect the $100,000 bounty on the Duke's head, De Niro needs to get him from New York to LA, but the Mafia and the FBI are both on their tails. Grodin made a bit of a mini-career out of playing accountants. In the 1993 flick "Dave," he appeared as CPA Murray Blum. In one scene, Murray the accountant helped President Dave Kovic, played by Kevin Kline, find an extra $650 million in the federal budget to open homeless shelters. We could use him in Washington now.

GOOD ADVICE

In the September issue of American Salon, my good friend Julie Shepperly of Milady Direct Professional Services gave the following advice. She is right on. I know from experience that those salons that are taking these steps have a great culture and are successful. If you are not taking these steps you need to consider working this into your business plan.

By the way, Julie is a great speaker. If you ever get a chance to sit in on one of her programs I recommend that you take advantage of the opportunity.

Raising the Bar
Every beauty organization, whether it’s got a staff of 30 or a team of three, needs to conduct career and performance reviews. “They are critical to the overall success and retention of employees,” says Milady Direct of Professional services Julie Shepperly. “Deep down, nearly everyone has a desire to succeed, as well as do what pleases our boss, family and friends.” Here, Shepperly sheds light on the key steps of the all-important review process.

Weekly Huddles: Conduct 15-minute meetings with the staff to discuss goals, promotions, challenges and successes.

Monthly Plan and Reviews: Each month, sit down with employees for a 30-minute mini-review to discuss their progress toward meeting quarterly and annual goals. “It’s an opportunity to receive feedback from team members on how they feel the business is progressing, as well as to toot one’s own horn on how well they are doing when it comes to accomplishing goals,” Shepperly says.

Quarterly Performance Reviews: These 60-minute in-depth reviews analyze statistics that measure success as well as those that determine whether or not a team member is eligible for a price increase and/or a salary raise.

Annual Planning Sessions: Conducted individually or as a team, this meeting is all about celebrating the successes of the previous year and making plans for growth in the upcoming year.

Finally, Shepperly suggests implementing only those steps that you can manage consistently. Once meetings are scheduled, it’s important to prepare. “Most reviews get off track and turn into complaint sessions because expectations weren’t clearly established and/or because there are breakdowns in communication,” Shepperly says. “Having clear communication and letting others know you care is key.”- K.D.

Wednesday, September 21, 2011

TALKING APPLE LINGO

Apple Store employees are trained to say things a certain way.

• "That's stupid" or "That wasn't smart."
They say: "That's not recommended."

• "Do you have any questions?"
They say: "What questions do you have?"

• "Unfortunately."
They say: "As it turns out...."

We say GREAT customer service training!!!

Tuesday, September 20, 2011

HAIRSTYLIST TAKES ON A BEAR

When Brooke Collins of Juneau, Alaska, heard her pet dachshund, Fudge, barking frantically in the backyard, she ran outside to see the dog in the firm grip of a black bear. Without thinking, she ran, screaming, up to the bear and punched it in the snout. The shocked bruin dropped the dog and eventually ambled off.


“It was all so fast. All I could think about was my dog was going to die,” said Collins, 22, a hairdresser. “I know you’re not supposed to do that, but I didn’t want my dog to be killed.”

The message… don’t mess with a hairstylist.

Saturday, September 17, 2011

FEDERAL BUDGET VS. HOUSEHOLD BUDGET

This information has been running around the Internet. I thought it explains our predicament really well.

The Federal Budget


1) U.S. Tax revenue: $2,170,000,000,000
2) Fed budget $3,820,000,000,000
3) New Debt: $1,650,000,000,000
4) National debt: $14,271,000,000,000
5) Recent Budget cut: $38,500,000,000

Now remove 8 zeros and pretend it is a....


Household Budget:


1) Annual family income: $21,700
2) Money family spent: $38,200
3) New dept on credit card: $16,500
4) Outstanding balance on credit card: $142,710
5) Total budget cuts: $385





The family is not going to make it.



Now those are some numbers I can relate to!

Thursday, September 15, 2011

LABOR BOARD ISSUES RULE REQUIRING EMPLOYERS TO POST NOTICES ON UNION RIGHTS

The National Labor Relations Board (NLRB) in Washington, D.C., has just issued an advance copy of its final rule requiring nearly every U.S. employer to post a notice in the workplace about the right to organize a union. The rule will take effect in 75 days, or on November 14th. For a fact sheet, visit: http://www.nlrb.gov/

I am on the Nebraska Chamber of Commerce board of directors and earlier this year, the Nebraska Chamber of Commerce & Industry signed onto comments regarding NLRB's proposed rule, arguing, among other things, that the notice requirement is unnecessary, biased and beyond the authority of the NLRB. It appears the NLRB did make some modest changes to its February draft. For example, it dropped the requirement that employers must "distribute the posting by e-mail, Twitter or other electronic means." NLRB member, Brian Hayes (R) voted against the final rule, while Chair Wilma Liebman (D) and members, Mark Pearce (D) and Craig Becker (D) voted to approve. With NLRB Chair Liebman's term expiring soon, some analysts believe that the NLRB may issue a flurry of decisions over the next few weeks.

Wednesday, September 14, 2011

ACCOUNTANTS IN THE MOVIES

In Hollywood, accounting can seem like a pretty glamorous profession, or not.

Cher won an Academy Award playing accountant Loretta Castorini in the 1987 romantic comedy "Moonstruck." She works as an accountant for several Brooklyn businesses, including her uncle's deli, and is engaged to be married to Danny Aiello, until she falls for his younger brother, played by Nicolas Cage. When the moon hits your eye like a big pizza pie, that's amore!

Tuesday, September 13, 2011

NON-SURGICAL TREATMENTS CONTINUE TO SOAR

American Spa – A recent survey conducted by the American Society of Aesthetic Plastic Surgeons (ASAPS), which focused on the amount of surgical and nonsurgical treatments performed from 1997 to 2010, revealed that there are now nearly six times as many nonsurgical treatments performed when compared to cosmetic surgery procedures.

The study also revealed:
• Non-surgical treatments have increased by 228 percent, while cosmetic surgery procedures have increased by 71 percent.
• Botox injections are the most popular, accounting for 32 percent of all nonsurgical procedures and have increased by 3,641 percent since 1997.
• Hyaluronic dermal fillers, which were not even available in 1997, were the second most popular nonsurgical treatment in 2010.

Monday, September 12, 2011

MY THOUGHTS ON THE PAYROLL TAX CUT IN OBAMAS NEW PLAN

President Obama will send his new jobs creation plan to Congress on Monday September 12th. He pitched it first in the Rose Garden surrounded by the kinds of folks that make for good press (vets and teachers, for example) and then send it to Congress for consideration.

I am not going to comment on all of the details of the plan at this time. First of all the press has given the details plenty of coverage and more importantly the specifics of the plan change and it goes through the legislative process. Outlining it early seems to confuse people when provisions that started out in the plan change. Once we see what the final bill, if any, looks like we will let you know.
I do want to give you my thoughts on the payroll break that is in the plan. Obama wants to extend the holiday and make the cut even deeper. The extension is a no-brainer.

Impact on Individuals

Making the cuts a bit larger is an interesting suggestion. Clearly, taxpayers like it when taxes get cut. But let’s keep this in perspective. It’s not a huge benefit for most taxpayers (a family making $40,000 would keep an extra $440 over the span of the year – or about $8/week). But most concerning, these are cuts to payroll taxes which are out of the Social Security fund. The Social Security fund is in enough trouble already and now they are putting less money in. That is hard for me to understand. How are we going to make that up later? Oh I know… Thanks kids and grandkids. Constantly banking on the idea that we’ll make up extra funds later is how we’ve gotten ourselves into the pickle we’re in now.

Impact on Business

Obama also wants to cut payroll taxes for businesses by 50%, to 3.1%, on the first $5 million in wages. As a business owner, I love this idea. But as a tax professional, I worry about it – for the same reasons articulated above. And I will say that while the cuts might make me happy because it’s less money out of my pocket, it wouldn’t make my business likely to hire new employees. Temporary fixes like that rarely benefit small businesses, in my opinion, because the long term consequences of a new hire are so uncertain. With the added responsibilities under the new health care law, for example, a temporary cut in payroll taxes won’t encourage small businesses to hire. I think they’re still going to be looking to cut employees – and take on cheaper, benefit-free independent contractors – rather than make new hires for employers. But maybe that’s just me.

In contrast, another business tax break in Obama’s plan that I do think has legs is the tax credit for hiring workers who have been out of a job for at least six months. The break is a $4,000 tax credit – not bad. Remember that tax credits are a dollar for dollar reduction in taxes which can be fairly significant, depending on your tax rate.

In terms of comparison of the two employer-side tax breaks, the tax credit for new hires is equal to the suggested “payroll tax cut” for employers paying nearly $130,000 in wages. In other words, you would pay $130,000 in wages as an employer under the new scheme before you would “save” as much as the amount of the credit. However, the payroll tax cut puts more in your pocket as you go while a tax credit generally gives you more of a benefit come tax time.

Sunday, September 11, 2011

“Back to School” Tax Planning Beats an Apple for the Teacher!

September is halfway over, and school is back in session. If you have kids, you’ve probably already met the teachers. You may have even watched a football game or two.

It’s probably been a long time since you’ve sat in a classroom yourself. But school is never out if you’re looking to make the most of your money in today’s challenging economy.

What classes would you take to keep more of your income in your pocket? Try these:

Math 1040: Where are tax rates headed?
History 2008: Lessons from last year’s mistakes?
Social Studies 463: Write off meals and entertainment
Chemistry 162: Is there a “secret formula” for paying less?
Anatomy 213: What’s the best strategy for healthcare benefits?

If you want to keep the most of what you make, you can’t wait ‘til finals for answers. You need to study now. Putting tax-wise ideas and strategies in place today could help avoid an ugly surprise when “Report Cards” come due April 15!

Email us today for your free tax analysis. We’ll find the mistakes and missed opportunities that may be costing you thousands today, and show you how “back to school” tax planning can save thousands more tomorrow. We guarantee you’ll leave with valuable new lessons, or we’ll donate $50 to your local school. Email now to schedule your Analysis.

Saturday, September 10, 2011

ACCOUNTANTS IN THE MOVIES

In Hollywood, accounting can seem like a pretty glamorous profession, or not.

Jack Nicholson plays a philandering CPA tax attorney coming to terms with his troubled relationships with women in "Carnal Knowledge." The 1971 movie co-stars Art Garfunkel as Nicholson's best friend in one of his few dramatic roles, along with Ann-Margret (right) and Candice Bergen as the women in their lives.

Friday, September 9, 2011

1099-K FORMS FROM CREDIT & DEBIT CARDS

The new payment card reporting rule is prompting revisions to the tax forms. For 2011, credit and debit card companies will begin to issue 1099-K forms on payments to merchants, and third-party networks such as PayPal will give 1099-Ks to payees with over 200 sales transactions and over $20,000 in annual sales volume.

These amounts will be reported on a separate line on Schedule C and Forms 1065, 1120 and 1120S. This way, the Service will be able to match the amounts shown on the 1099-K with what’s reported on a return, making discrepancies easier to spot. The IRS is hoping that this should reduce underreporting of gross receipts by sellers of goods and services.

Wednesday, September 7, 2011

THE TIPPING POINT

Some New Stats on that Last Little Transaction Between a Client and Her Stylist

For most service providers in the salon, the tip continues to represent a significant percentage of take-home pay. But sometimes, these dollars that do nothing for the salon’s bottom line offer owners a headache in boosted credit card processing fees and reporting responsibilities to the Internal Revenue Service.

When asked what the average top percentage a stylist in the salon would pull in, here’s the breakdown:

2% of owners reported that an average tip represents less than 2 percent of the service fee
10% of owners feel tips hover around 5 percent
32% reported average tips of 10 percent
32% say tips are closer to 15 percent
16% think their average tips are 20 percent
• While a lucky 8% reach a tip average of more than 20%

When asked if they allowed tips to be added to credit card transactions…

83% of owners said Yes
17% said No

Tuesday, September 6, 2011

PBA/NCA DISASTER RELIEF FUND AIDS TORNADO VICTIMS

The Professional Beauty Association (PBA) and the National Cosmetology Association (NCA) are asking all industry professionals to make tax-deductible donations to the PBA/NCA Disaster Relief Fund, which raises money for beauty professionals affected by natural disasters.

“The PBA/NCA Disaster Relief Fund is a perfect way for our industry to come together and help support fellow beauty professionals in their time of need”, said Steve Sleeper, executive director of PBA. Sleeper said PBA/NCA has received letters from numerous salon pros in need.

Contributions can be made online at www.probeauty.org/disaster-relief-fund.
Salon professionals who have been affected by natural disasters can also apply for assistance on the website. PBA will provide one year of complimentary individual membership for anyone who applies for assistance.

Friday, September 2, 2011

ACCOUNTANTS IN THE MOVIES

In Hollywood, accounting can seem like a pretty glamorous profession, or not.

Edmund O'Brien plays accountant Frank Bigelow in the fast-paced 1950 film noir crime drama "D.O.A." The movie opens with Bigelow entering a police station to report his own homicide and then in flashback traces how he came to learn that he had been poisoned by a former client who needed him to notarize an incriminating document. The movie was later remade in 1988 with Dennis Quaid playing O'Brien's role, but in the remake Quaid is a college professor. O'Brien is shown here with Laurette Luez, who plays his client's mistress Marla Rakubian.

Thursday, September 1, 2011

EXPENSING ELECTION

Q. I hope you can help me. I want to make sure I’m clear on this. We purchased some used equipment from one of our suppliers. I know there is something called “Expensing Election” which allows you to expense equipment when it is purchased. Does used equipment qualify?

A. Good News! The expensing election is also called Section 179 depreciation. In 2011you can take up to $500,000 of equipment purchases either new or used and qualify. There are a couple of restrictions. The amount of fast depreciation that you can take is limited to the amount of your income from that business. In addition, if you happen to purchase $800,000 of equipment, the expensing election phases out.

Let me know if you have any other questions.
It is a pleasure serving you.

QUESTION ON BOOTH RENTAL CONTRACT

Q.Good Morning, I have a question and was not sure where to post it. I live in the state of Texas. The owner of the salon in which I work has given us contracts to read and sign if we agree to the terms.

These are Booth Rental Contracts. In the contract it states that at the end of the year the booth renter shall provide a form 1099 to the salon owner showing the untaxed income you provide to the salon.

I am not sure I understand why we have to give her a 1099 when we are solely responsible for our own taxes as an independent business. Can you give me any information about this subject.
Thank you!! ~Lisa


A.Lisa, I have not seen the contract so I am not sure what the contract actually says. As a renter you are required to give a 1099 to your landlord if you paid over $600. If the landlord is a corporation, you do not need to send a 1099. Maybe this is what the lease is getting at.


It is a pleasure serving you.