QUESTION ON COLLEGE VERSUS SALON SCHOOL

Larry, I remember reading something about how much money I could make as a stylist vs going to college. Could you tell me where to find this information again? Thanks - Carla

Carla, You're right. This information was published on our blog back in January. We have a tool on our website that shows an earnings projection for someone attending salon school for one year, compared to the earnings of someone paying college tuition for four to five years.

You may change the numbers in red to make up your own examples. We kept this example simple by not taking into consideration the time value of money nor the interest on the education debt. This would have made the spread even greater. Check it out at: College Versus Salon School.

It's a pleasure serving you.

Larry Kopsa CPA

JUST FOR LAUGHS

John was a salesman's delight when it came to any kind of unusual gimmick. His wife Marsha had long ago given up trying to get him to change. One day John came home with another one of his unusual purchases. It was a robot that John claimed was actually a lie detector.

It was about 5:30 that afternoon when Tommy, their 11 year old son, returned home from school. Tommy was over 2 hours late.

'Where have you been? Why are you over 2 hours late getting home?' asked John.'

Several of us went to the library to work on an extra credit project,' said Tommy.

The robot then walked around the table and slapped Tommy, knocking him completely out of his chair.

'Son,' said John, 'this robot is a lie detector, now tell us where you really were after school.'

'We went to Bobby's house and watched a movie.' said Tommy.

'What did you watch?' asked Marsha.

'The Ten Commandments.' answered Tommy.

The robot went around to Tommy and once again slapped him, knocking him off his chair once more. With his lip quivering, Tommy got up, sat down and said, 'I am sorry I lied. We really watched a tape called Sex Queen.

''I am ashamed of you son,' said John. 'When I was your age, I never lied to my parents.'

The robot then walked around to John and delivered a whack that nearly knocked him out of his chair.

Marsha doubled over in laughter, almost in tears and said, 'Boy, did you ever ask for that one! You can't be too mad with Tommy. After all, he is your son!'

With that the robot immediately walked around to Marsha and knocked her out of her chair.

SALON SOFTWARE

If you are looking at installing or changing salon software, there is a very interesting article you should look at in the May 2008 issue of Modern Salon. In this two page article, they feature SalonBiz, Salon Transcripts, and Millennium Software by Harms. We have clients that use all three of these software programs, and they are all excellent.

Additionally, we have on file a comparison from an earlier magazine on the various software programs. If you are interested, let me know, and I would be glad to send you a copy.

Larry Kopsa CPA

MONDAY INDEPENDENT CONTRACTOR TELESEMINAR

I am honored to have been asked to speak for Spalutions Career Success Teleseminar. If you are interested in the Independent Contractor rules, here is the information: Spalutions Career Success Teleseminar Series on Monday, June 16th at 3 PM EST.

Larry Kopsa CPA

SALON DIVERSION FINALLY GETTING EXPOSURE

I received this broadcast and online article from Redken 5th Avenue NYC. It looks as though diverson is finally getting some exposure.

An ABC television station in Phoenix reported on salon diversion – both the broadcast and the online article can be viewed with the link below. The investigative article explains what diversion is, that it ultimately can rip off consumers, and that products may be contaminated. The segment reports that non-authorized stores can charge anywhere from 50% up to $5 a bottle more and the ABC15 Investigators found Redken Color Extend Shampoo for $15.69 at Safeway vs. $11.50 at the salon across the street.

Hair product diversion:
http://www.abc15.com/content/news/investigators/story.aspx?content_id=e51e6e6d-20e3-46d3-ab14-4ef79b353a53> ABC15.com (KNXV-TV) - Phoenix , AZ , USA

REBATE CONFUSION

It seems that there is still a lot of confusion on the rebate. See our website article published a few days ago. I think I have gotten around 20 questions on the stimulus topic.

Not surprisingly, the IRS website has completely contradictory information regarding this, saying both that the rebate will be factored into the net tax on the 2008 1040 and also that it will have no effect whatsoever on the 1040’s bottom line. Obviously, both those claims can’t be true.

It has been my contention from the beginning that this will be handled just as we had to do with the similar advance rebate checks a few years ago. People who did not receive their rebates via checks were able to have that amount credited on their 1040s so that they ended up receiving the same net benefit as those who receive actual checks.

Here is the real deal...

The tax rebate is an advance credit for 2008 and will be calculated on your 2008 return. Now this is important: you are receiving a portion of your 2008 credit EARLY and if you receive it once, you won't receive it again when you file your 2008 return.

And, this is important too: if you're due a higher tax rebate, you'll get the remainder next year when you file. If you received a higher rebate than you should have, you DO NOT have to pay it back. So far, so good.

A tax rebate is not interest, it's not income, it's not a dividend. Pure and simple, and this is worth saying again, the tax rebate payment is an ADVANCE CREDIT for tax year 2008 and will be calculated on your 2008 return when you file in 2009.

IF YOU ARE INVOLVED WITH A NON PROFIT - TAKE NOTE

If you serve on a nonprofit’s board, you should be aware of a recent law change that could put the organization’s tax exempt status at risk. Prior to this change, most exempt organizations other than churches and their affiliated entities, were required to file an annual return with the IRS. However, entities whose average gross receipts are no more than $25,000 annually have traditionally been exempt from this requirement. Beginning in 2008, that’s no longer true.

Small tax-exempt organizations must now electronically file a notice with the IRS called Form 990-N. This new form must be completed by organizations that are exempt from filing the more complex annual returns (Forms 990, 990-EZ, 990-PF, or 990-BL) because their gross income is below the filing threshold for these returns.

Although the Form 990-N should be very easy to file (the IRS refers to it as an e-postcard because it is so short), organizations that fail to file it for three consecutive years will lose their tax exempt status. The only way to regain a tax-exemption at that point will be to spend the time and expense of reapplying to the IRS—obviously not something that anyone will want to do.

The electronic form can be accessed through the IRS website (www.irs.gov/eo, which reroutes you to a third-party vendor, Urban Institute, who handles the filings for the IRS) or by going directly to the filing website: http://epostcard.form990.org/. As with the information filed by large organizations, the information reported on Form 990-N will be available for the public to see. The public can view an organization’s Form 990-Ns at http://www.irs.gov/app/ePostcard/, as well as download the entire database of Form 990-Ns.

The deadline for filing Form 990-N is the 15th day of the fifth month after an organization’s year-end. Thus, for organizations using a calendar-year, the deadline for reporting 2007 information has already come and gone. However, there are no penalties for filing late as long as you don’t miss three years in a row and jeopardize the organization’s exemption. Nonetheless, it’s important to set up procedures within the organization to make sure the annual Form 990-N is filed on a regular basis as each year’s accounting is concluded. In addition, it is now more critical than ever to adequately record the organization’s gross receipts to aid in determining whether the Form 990-N or the more robust Form 990 or 990-EZ must be filed.