Archive for September, 2008

What Happens To My Baby’s Mom or My Baby At Tax Time

Tuesday, September 30th, 2008

Question from a reader:
“I live with my baby and my baby’s mom. Can I claim them at tax time?”

My answer: It depends. Take a look at my previous two articles on qualifying children and qualifying relatives. There isn’t a straight answer I can give because you have to work through who is providing support. Is there a claim from Mom’s parents that might supercede your claim? Is there any other support coming in from outside services?

How about Mom? Is she planning on claiming your child herself? A super tenative answer again would be, possibly you can claim them both but you need to work through the questions or sit down with a tax professional (there are some of us who take questions off season) and plan profitable, money saving tax decisions accordingly.

Question from a reader: “I donated bags of clothing to Goodwill. The clothes were worth thousands of dollars. Do I write that in the receipt since there is no amount there?”

My answer: No, I would suggest you figure the thrift or salvage value of the clothing. You otherwise should have gotten an appraisal prior to making the donation. The IRS requires that you have an appraisal for big ticket items or for large volume donations. Remember the thrift store would have to actually sell the goods for thousands of dollars and provide you with some sort of letter saying that was the case in order for you to support your claim with the IRS.
Readers, bags of old clothes should be treated as that, no matter how much you originally paid for the clothing. The IRS and state agencies know that you are cleaning out your closet. You should be donating to help people who don’t have clothes. The tax break is just a side benefit.

Keep the questions coming readers. You know I love you all!

Kim Isaac Greenblatt

You are reading Kim Greenblatt’s blog, profitable, as he answers questions about your baby’s mom and contributions to charity.

How Much Inventory Should I Keep In Stock?

Monday, September 29th, 2008

Question from a reader:
“I have a retail business that I have been running for about a year. Lately I have been trouble keeping my inventory straight. Some months I sell out and my customers complain that I don’t have enough goods on the shelf. Other times, I load up with what they want and the items just sit. I hate having my profits sit on a shelf but I don’t want to run out in case customers come in. What am I doing wrong?”

It could be that you are doing nothing wrong and that the economy is just in flux and as a result, your customers just may be all over the map in trying to decide to buy something or not. Maybe they stocked up on the goods that aren’t going to perish over the next few days or week like paper towels, toilet paper, aspirin, coffee.

Maybe your business is still new enough that you haven’t quite nailed down the trends for your area.

First questions I would want to try to answer-How are your competitors doing? Are they running into the same problems? If so, just cut back on your orders and keep your inventory a little lower and wait till it sells through. You don’t want to overstock or go deep into your credit lines if you carry them for business and risk being stuck for both inventory you can’t sell and lines of credit that need to be paid off.

Has the local economy changed and is price now more of an issue for what you are selling? If so, can you discount your goods somewhat to clear them off the shelves and at least break even pricewise? Breaking even isn’t as good as making a profit but it beats losing money. That is totally unprofitable.

Did something else change where the competition is offering something a little more high tech, or efficient or anything like that? If so, you will need to review and see if you can liquidate your inventory and sell something more in line of what the buying public is interested in.

One of my favorite sayings is “Nobody ever went broke from selling through all their inventory.” If you have sold through and are temporarily out of stock, be glad that you received cash for what you ordered and trying tweaking your orders just SLIGHTLY for next week or month. You don’t want to over order and find that the demand for your product has shrunk.

Check with your orders from previous months and see what might be changing in trends. One example is summer items won’t sell in winter months usually and the same holds true for winter goods sold in summer. It is also tough to sell holiday products, like Christmas or Hanukkah decorations out of season.

Sometimes it may be just consumer blips but if all else fails, slow down on your ordering or stop entirely ordering the items that aren’t selling and seriously think about getting rid of excess inventory if the goods don’t look like they are moving.

If you plan on donating to charity the goods, make sure that you get letters from the registered organizations that you are donating the goods to and make sure that you have appraisals to substantiate your claims. The IRS and state tax agencies are checking deeper into non-cash contributions, especially if they are not supported with the proper documentation.

Kim Isaac Greenblatt

You are reading Kim Isaac Greenblatt’s blog, profitable, and what to do with excess inventory problems.

Sat Night Poker Winning and Investment Thoughts

Sunday, September 28th, 2008

Saturday night I went briefly out to play some $4/8 Texas Hold’em at Hollywood Park. It was after I visited my mother and I wanted to just briefly play for a little bit. The table was a little loose for my tastes but as anybody who has read my books or writings know, it shouldn’t matter if you stick to playing your game and adjusting slightly to compensate for any game climate changes (the game goes from too tight to too loose, etc). I was dealt the jack and five of clubs and I was under the gun. Normally, in a regular, “average” game where the players are balanced and not too tight or loose I would fold. I didn’t and I ended up winning big when the board flopped a pair of jacks to make me trips. I didn’t win many hands after that but I left a winner.It turned out to be a profitable evening. I bought in with $120 and left with $148 for a net profit of $28 or about 23 and 1/3% profit. Not bad.

When it comes to investments, people need to do a reality check to see if the percentage that they are making back is sustainable for the money they are investing. Some poker players are probably saying, “That isn’t poker, that is being a coward.”

If quitting with a return on investment (ROI) of 23.33% is cowardly, then I want to be the king of the cowardly lions. I wish ALL my investments could return that much money. The reality is that in poker, a lot of it is depending on luck.

With investments that is true to a point but if your money is supposedly in a “safe” investment that is government insured, you would hope that there would be less risk.

In most investments, if you take a little bit of a chance, you might be rewarded greatly. You need to remember, that often when you play suited jacks and fives, more times than not you will end up losing, depending on the complexion of the game you are playing.

In the coming months, if not years, play your hands and your investments a little closer to your vest. If you are getting a decent ROI on your savings or investments with not a lot of risk, be thankful despite what people are saying about losing money to inflation.

It is better to have money now and worry about losing money to inflation later on just as it is better for a poker player to leave a game with money in his pockets so he (or she) can play another day!

Some more financial information can be found from my new book on Practical Money Making.

Kim Isaac Greenblatt

Kim Greenblatt talks about Sat night poker winnings and investment thinking in his blog, profitable.

Ten Things To Do While The Global Economy Works Itself Out

Saturday, September 27th, 2008

1.   Find an economist who is around from the 1970s and 80s and get him to advise us what to do.  We haven’t had an economy with stagflation since then and the current economists so far don’t have a clue as to what to do.

2.  Write your Congressmen and the candidates and tell them to give US $4-7000 directly to each taxpayer.  Let the money trickle up to the businesses in reverse trickle up economics.  Giving the billions to the banks didn’t work before and it doesn’t look like it will work now if the money isn’t getting to the people, not the businesses, that need it.

3.    Stay profitable by avoiding any investment where there is too much change for the immediate future.  If you are in something stable and happy, we envy you.  If you are in a stock or commodity that is all over the map, you may want to park your money for a bit, at least a few months – maybe longer till we see what happens.

4.   Be nice to people who can’t help themselves.  I am talking about people with special needs, the elderly, your relatives who can’t take care of themselves.  You don’t have to go nuts but remember that they need help and you could be worse off than you are right now. 

5.    Explain to your kids and anybody else who doesn’t quite understand what is going, what is going on.  This may be the turning point for a lot of people in terms of waking up financially and getting their acts together and they in turn can pass these values onto their kids.

6.   Hang onto cash and gold (actual gold if you have it).  Cash is more than king and if you remember the cliche, “Money talks”, you will be happy to know that the cliche is wrong.  Money doesn’t talk, it screams. See if you can get discounts with some merchants if you pay cash instead of credit cards. This won’t work with chain stores but maybe with some other stores or with business suppliers. Work on eliminating your debt in case interest rates start going up and to get you back to some position of financial stability if you don’t have one already.

7.   Keep your house or apartment clean. Clutter may keep your house warm but you will be pleasantly surprised at how psychologically your thinking will get cleaned up if your surrounding living space is clean. It will also be easier to find important financial documents, statements, tax information or anything else that you need or are looking for.

8.   Stay healthy and make sure your family and friends are healthy. Without your health, you will not be able to keep your spirits happy through the upcoming financial readjustments.

9. Ask questions about finances and keep your eyes and ears open. Don’t rely only on the internet alone for financial information. Everybody parrots everybody else and at this point in the world, nobody has the answers as to what we should do and where we are going.

10.   Get a copy of my book.  It will help you get and stay on track financially!

Anything else to say or add?  Post a comment or drop me an email!

Good luck everybody!

Kim Isaac Greenblatt

 

Kim Isaac Greenblatt has ten things for you to do while the global economy works itself out.

Second Carnival of Special Needs and Money Coming Up

Friday, September 26th, 2008

The dead line is approaching for my second carnival of special needs and money. My first carnival was a little on the light side in terms of content, so if you have a blog that is relevant to autism, Rett Syndrome, CP or any other special needs issue or something that deals with money and special needs, please send the listing through the Blog Carnival.

I am trying to get relevant articles up that deal with coping with special needs situations and of course, trying to keep an income stream, leave alone trying to stay profitable. Anything that makes sense (or even venting) is welcome. No spam, ads for inappropriate items (you are smart enough to know what I mean), junk mail or something that really doesn’t belong in the submission.

Please keep writing your political representatives and the candidates to keep funding for special needs programs. Our particular group tends to not get heard in politics unless we are screaming with everybody else, so keep the screaming up.

I especially would like to see Rett Syndrome blogs or articles for the next carnival if you have them.

Keep the faith and this is a short post!

Kim Isaac Greenblatt

You are reading Kim Greenblatt’s blog, profitable and his request for entries for his Second Carnvial of Special Needs and Money that is coming up.

Building Bridges, Dams and Infrastructure

Thursday, September 25th, 2008

The way to rebuild the economy is through fixing up our infrastructure – the veins and arteries of our nation.  We have highways, bridges, levees, causeways, roads, storm drains, parks, and entire cities that need rebuilding.  If the Federal government is taking the time to pour money into saving banks and savings and loans, how about pouring some money into saving us as people?

Candidates and Congressmen – get legislation moving NOW to start getting the nation rebuilt.  it is simple economics, if you start paying people to work they will have money to spend.  When they are spending, they will encourage other companies to manufacture other goods and it will allow the companies to hire people. Companies can then pay their workers. 

Workers won’t be able to save for ten percent down for their homes if they don’t have an income stream.  Make savings education mandatory at schools.  What happened to teaching basic money management?  Obviously, people aren’t learning it at home.  If the parents don’t know how to handle their money how can we expect their kids to manage?

In the Depression of the 1930s, legislation was introduced to build dams for energy production, roads for people to travel across the nation.  The government worked at helping people help themselves and not get a handout. 

We need centers for our senior citizens that aren’t rat traps.  What is the purpose of working to a retirement if you are retiring to what basically amounts to a cell where you are let out just a couple of times a day?  Sounds more like prison than a retirement facility.  Why bother trying to be profitable if that is all that is waiting for you when you retire?

We need care for special needs and we need it at a national level.  Some groups of people are getting help and others are not.  If we are a country that is taking care of itself, we need to take care of ourself and those who cannot take care of themselves.  How about programs to build housing for people with special needs or disabilities?

It doesn’t take much in terms of creativity to get our country moving again.  We still have the wherewithall and energy to do what we want if as a nation we are directed.  Write your candidates and Congress.

Suggest they float bond issues to raise money for programs to get our country going – to be profitable and to be sane. 

Make sure the money is distributed throughout the US.  Yes, disaster areas are getting money but right now the entire country is looking at times like a disaster area!

Let’s build some financial bridges and real bridges to make things right.

We need to take action now!

Kim Isaac Greenblatt

 

Kim Greenblatt, in his blog, profitable, wants the US to start programs to work on our infrastructure.

Thinking Poor but Happy

Wednesday, September 24th, 2008

What is a great way to force yourself to save money?  Whether you have money or not, pretend that you don’t have money.  That means, whenever you find you have the urge to go get a cup of coffee from the Starbucks or need to go to Walmart or Target “just to window shop” you don’t because you don’t have the money.

Folks, one of the reasons we are in the situation we are in is because the entire world has been driven by marketing people telling us that we “have to” have this or “have to” have that. Other than food, clothing, shelter, the rest is just embellishment!

Seriously, you don’t have to go over the top. Just start thinking about taking the money that you would have spent on extra coffee, comic books, magazines, clothes, snacks you don’t need to eat, and anything else and put that into a jar. Keep the jar away from your family. Unless they are putting money into that jar I suggest that you hide it. With all the banks going under, maybe under your mattress may be lumpy, so try a shelf in your closet.

A lot of people live their entire lives without anything other than food, clothing and shelter. If you judge being profitable by happiness, the chances are that they are much more profitable than you or I.

Am I asking you to become completely spendfree? Of course not. You may not be able to do it but at least you are pointing yourself on the right track for savings. Thinking poor is the first step to getting rich. Save, save and save and treat yourself as if you don’t have money. We all need to work on developing better money management attitudes.

If you are in debt, that may not be an easy thing to do and I applaud you for working through your debt. Keep at it but try and soak away some money for savings as well. It is profitable in case something happens and you need a doctor, a new car, or an emergency trip somewhere. You will need money for that. If something happens with your kids or relatives, you can be in a position to help out – though don’t make it a habit.

Try and think back as to when you were really happy. Sure, a lot of the times you may have had money or gotten something material that you really wanted. How about some other things that were not depending on cash? Ever feel happy just being alive? How about walking along the beach? Thanking the universe that you are healthy and able to walk, run, wheel, think, have working bodily functions? You don’t need to spend money to be happy. It does help at times but you need to search yourself – and you don’t have to be spiritual or psycho-babbling to do it.

Start small by pretending that you don’t have excess cash and see how creative you can get. Try and see what things you can do for you and your family that will keep you all happy and not cost money.

Drop me a line as to how that is working out as well!

Kim Isaac Greenblatt

Kim Isaac Greenblatt in his blog, profitable suggests you think poor to be happy.

Financial Recovery isn’t an overnight thing

Tuesday, September 23rd, 2008

With all the bailouts going on with AIG, our banking system, the freezing of the ability of investors to short financial institutions, it would be easy to say “happy days are here again.” Judging by the mini bounces in the stock market, some investors think that the future is rosier than before. Without meaning to shatter their worldview, we still have a long way to go to get back on track as a country and as individuals.

People are losing their homes, they are being thrown out of their apartments for not paying rent and they are getting clobbered with the rising costs of food. We are on track for stagflation and we need to do something collectively now as a county and as individuals.

As an individual, you can help your country by writing, emailing, visiting our Congressional leaders, our state leaders and Presidential candidates. Tell them that we need work. Tell them that we need inexpensive medical care. Tell them we need to get some programs going where people can work and make an honest living wage out of it. It is getting too expensive to have a decent quality of life in this country. The number one that should be on everybody’s mind is we need something constant in our country and it means we need to stop paying lip service to energy plans and develop some concrete programs with solar, wind and other reusable energy sources. As an individual you need to work on your savings and paying off your bills. Stay healthy and watch what you are eating and drinking. We all need to live longer and healthier lives to enjoy the advances in technology and hopefully positive changes that we can introduce into our society.

I submit that we tell our local, national and international leaders that we need to work on infrastructure. Build new bridges, rebuild the old ones, shore up broken dams, waterways, highways. There is no shortage of things broken down, there is a shortage of good ways to get people working and earning money so they can save and spend some of it. Again, basic economics put into action.

We are going to be entering a world where money will be tighter (I always harp on this) and we need to take care of our special needs people, our elderly and people who need help. In order to do this and do it the right way, we need to get social security working. We need to get some programs that will actually help people and generate income for the country at the same time. Maybe since we own AIG we can do something where we can get trades in goods and services from some countries like commodities that will help us.

Any ideas that you want to share with us? Remember to let your leaders know as well!

Kim Isaac Greenblatt

You are reading the profitable blog by Kim Isaac Greenblatt and getting a license to think!

California DE-4 Withholding Calculator Oh Boy!

Monday, September 22nd, 2008

I found a nice little web page on the Franchise Tax Board website for California taxpayers. This page, has the links to BOTH the Calfiornia DE-4 and the Fed W-4 withholding calculators.

Just a heads up that the California one is in Excel format, so you will need the spreadsheet program to make your calculations. The Fed calculator is fill-in right on the internet.

It is very profitable to take a quarterly check up to make sure that you are having enough taxes taken out of your pay stub. Sometimes Human Resource Departments make mistakes! Sometimes numbers get transposed and even worse, sometimes software table updates with new tax rates don’t get loaded properly into payroll systems! I’ve seen it all…

My clients always come to me and ask if they are taking enough out of their pay, too much and how can they “guesstimate” what they need to have taken out so they are either even at the end of year for both the Fed and State of California or so they only owe a little. I either do the forecasting myself for the clients that don’t like to work with numbers or send the self-acting clients directly to this link. They can go ahead and calculate what they plan on their withholding to be. They may have changes like a relative coming to move in with them and they can adjust the withholding accordingly. Maybe you are getting married.

Now if you are a good tax professional, you should be doing your own questioning and guesstimating along with them to see if what they are having taken out is reasonable. Reasonableness is a big word to me and to the taxing authorities because if something looks out of kilter, the chances are that it might get a closer look. I always look twice and then ask a client if there is anything weird when I get their W-2s to make sure things were taken out properly.

I strongly urge you, dear reader, to always look at your pay stubs throughout the year if you are working for somebody and check to make sure that a reasonable amount of tax money (what you should be paying) is being taken out. Both the Fed and State of California respect the “pay as you go” plan.

For more detailed questions, drop me an email or check with your tax pro.

I am never one to “withhold” my experience with you, dear readers!

Kim Isaac Greenblatt

You are reading Kim Isaac Greenblatt’s blog, profitable, and where to find the DE-4.

Timing Markets

Sunday, September 21st, 2008

A lot of people think that they can time the market for introducing a new product and service.  If you can, more power to you because as the cliche goes, “Timing is everything.”  The reality though is that despite the best efforts at timing, products or services sell if there is a demand for it no matter what the economy is or how deep a person is in debt.  If the person has no money and still wants to get it, they will try and get it.

Take video game systems for instance.  People use to spend hundreds of dollars for a gaming system and games if it were the latest and greatest and they felt they had to have it.  There was a reason that Nintendo, Sony and Microsoft tried to time the release of their gaming systems at Christmas or at the latest, January.  People’s minds are already primed for spending and being on the self-indulgent side.

Alas, for the near future I think those days are gone.  People don’t have the money that use to and with large companies needing to be bailed out by governments, jobs being on the line, timing the release of products may not make a difference overall.

Movie producers and distributors have some success with timing releases in order to prevent film piracy.  What could we do as business people to be more profitable and is there any hope in trying to time a release of product or introduction of a service?

The best thing to do is to start writing about what you are trying to sell and see if there is a market for it. If you are getting any kind of response and you have market penetration where people can actually read your press releases, your stories, your upcoming events, then you have a decent forum to see if there is any interest in the item.

You can also just go ahead and get the product on the market as soon as possible. If you have the budget to advertise the heck out of the product (say the latest and greatest iPod type of hand held music player) you may get some sales.

One of the reasons we are internationally in such a mess financially is that companies with their preprogrammed software trading tried to “time the market”. The problem is that everybody is trying to time the market so conventional wisdom as to when to buy or sell stock, commodities or even when to start selling stuffed teddy bears doesn’t quite work anymore.

So back to basics.

Have a good product, something that you think there will be a demand for, price it reasonably and get your distribution chain in place so you can start taking orders. All in all, once you get the details straightened out (not an easy thing to do obviously), it is easier than trying to time a market!

Kim Greenblatt

Kim Greenblatt, in his blog, profitable talks about timing markets.