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What Last Year’s Tax Returns Have Shown Me

 Thursday Night Calls:

C Corporations with a September 30 year end are due December 15th
These returns can be extended for six months but you must pay any taxes due by the December 15th due date.

 

Last Friday brought an end to the 2010 filing season. With the passing of the October 15th deadline comes an unfamiliar calm over the office. This return to normalcy brings back a welcome quite energy. An atmosphere that draws out a reflective state of mind…………….. All right you get the picture, the tax deadline has past and it is time to see what I may have learned from it. In fact I learned quite a lot. I learned about myself, about my business and about your businesses.  I won’t bore you with talking about myself (I know, why stop now) let me instead share with you what I saw in your businesses.

In looking back at last year’s tax returns there were a few interesting trends.  The first major thing I noticed is that nearly 45% of our clients had a foreclosure or short sale impacting their return. To the surprise of some the overwhelming majority of those actually had a reduction in taxes because of the foreclosure or short sale. Another thing I noticed was in spite of the foreclosures far more people than you would have expected bought investment properties. The focus however has moved toward fix and flips such as REOs and away from buy and hold rental real estate.  

Another trend was that very few people’s income remained the same as the year before.  The change in income may not seem surprising looking at the economy but what you may not expect is that many clients had increased income over the prior year. About 30% actually had more income than the year before.  Your probably wondering as I would what type of business are those people in and is it too late for me to get in on it?  The businesses or occupations that had increased income were: medical and dental, multi-level marketing, sales, coaching, e-commerce, real estate flipping, bookkeeping and technology. But before you jump into one of those, check out which businesses or occupations had decreased income: medical and dental, multi-level marketing, sales, coaching, e-commerce, real estate flipping, bookkeeping, technology, construction and mortgage brokers.  So what does this show us? Not a lot, other than some people made money and some people lost money in the same fields.

There was one common factor that stood out for those businesses that made more money last year than the year before. That one factor was planning.  Virtually every business that made more last year than the year before (some even made more than ever before) were organized and had a plan. In talking with many of these clients they told me how they did not just keep on doing things the way they had in the past. They made changes measured the response to the changes and changed things again. They kept changing things until their business worked.  Some scraped everything and started new. To be fair some of these folks had a bad year the year before but they did not just wait for things to get back to “normal” or just try to make it until the economy turned around. The better year they had last year was a direct result of their making it a better year.

This year is almost behind us.  Has it been the year that you wanted? Now is great time to take stock and create your strategy for making 2011 be the year that you want rather than the year that just happens. This can be an uncomfortable under taking as you may find that you were wrong about some long held ideas. You may be forced to finally come to the decision that it is time to walk away from some things. It is also a very exciting under taking because all things are open to you. You just need to put our mind to it; that means to think it through in advance.  Diana and I are planning on cashing in some of our Marriott Rewards points and spending several days creating our 2011. What are you going to do?

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Never let a good crisis go to waste!
I never thought I would be able to take advantage of a crisis but with the foreclosure crisis going on I learned that I could turn this negative into a positive. Check out the replay of my friend Jeff Adams webinar and you can see if you could as well Watch Now >>

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This Week's Quote

Throughout the centuries there were men who took first steps down new roads armed with nothing but their own vision- Ayn Rand

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