Richard A. Lindsey, CPA

Lindsey & Waldo, LLC – Certified Public Accountants

  • Aug 23

    You’ ve just closed the sale/completed the transaction. Your prospect is now your customer or client. This is a great time — in fact, it’s the best time — to ask for and receive referrals. Sure, you can ask for referrals from anyone, at any time, once they know you, like you, and trust you. Still, there’s no question that the best possible person to ask for referrals is the one who has just made a purchase from you.

    And yet most salespeople squander this opportunity, they never ask for a referral. Why is that? In his book, Endless Referrals, Bob Burg identifies four reasons.

    Reason 1. They Forget

    Why do they forget? It could be for any number of reasons. They’re not used to asking; it’s not an established part of how they operate. When the situation gets tense – filling out paperwork, answering more questions, etc. — it’s easy to forget what you’re not yet used to doing. In other words, it’s not part of their consciousness. Perhaps, they even forget to ask because, deep down, they don’t want to ask. In that case, it’s just easier to forget.


    Reason 2. They Lack the Confidence

    Salespeople often retreat from the opportunity to ask for referrals because they don’t have the confidence in themselves to do so. Perhaps the new customer or client will say no, and rejection is never fun. They’ve already gotten over the hurdle

    of facing possible rejection once, when they made the sale, why court it again? Hey, maybe the client will get annoyed and actually change her mind about the decision to buy! Or maybe the salesperson simply doesn’t believe she is worthy or deserving of referrals.


    Reason 3. They Don’t Think Their Products Warrant Them

    This is a very disturbing reason salespeople sometimes don’t ask for referrals. If this is the case, you must either learn more about your product or service — enough that you come to fully understand how much it serves your customers and how much it adds to their lives, and thus to the lives of all those to whom they refer you — or find another product or service to represent. If you don’t believe enough in what you do that you feel it’s worthy of helping everyone in the world own it who should own it, then you can’t expect to be very successful.


    Reason 4. They Don’t Know How

    Ah, this is the final reason, and, according to Burg, the easiest one to address. Often salespeople don’t ask for referrals simply because they haven’t been taught how to do it properly — in other words, how to do it in a way that they’ll get them. If you don’t know how to do something right, they figure, why bother? There are plenty of books, such as Burg’s, and courses out there to help them learn how.


    Now we don’t all have salesperson in our titles, but there’s no doubt it falls upon us to sell ourselves, our products and services, and our companies. So, if you’re not asking for referrals on a consistent basis, what reason is your excuse?

  • Aug 7

    with Ashley Brown

    Really… Another Tax? Sorry, but yes, the same people that brought you Obamacare ushered in the 3.8% Medicare Surtax, which took effect January 1, 2013. For the first time ever there is a Medicare surtax on your “net investment income” and capital gains from the disposition of property.  It does not apply to income from a trade or business or from the sale of property used in a trade or business. The Medicare Surtax applies to the lesser of your net investment income or the amount of “modified” adjusted gross income (AGI with foreign income added back) above a specified threshold.

    After you calm down from grumbling about a new tax, you might ask… What is “net investment income” (NII)? Net investment income is the gross income from interest, dividends, annuities, royalties, and rents provided the income is not generated in the ordinary course of an active trade or business. It is also gross income from a trade or business that is considered a passive activity, gross income from a trade or business of trading in financial instruments or commodities, and net gain from the disposition of property, other than property held in an active trade or business.

    How does it work? As stated above, the tax applies to the lesser of the taxpayer’s net investment income or the amount of “modified” adjusted gross income above certain thresholds. Those adjusted gross income thresholds are:

    • $250,000 for married taxpayers filing jointly or surviving spouse
    • $125,000 for married taxpayers filing separately, and
    • $200,000 for single and head of household taxpayers

    Example: A single taxpayer has modified AGI of $250,000, including net investment income of $30,000. The Medicare Surtax applies to the lesser of the net investment income ($30,000) or the excess of AGI over the applicable threshold ($250,000 – $200,000 = $50,000). Thus, the Medicare Surtax applies to $30,000.

    How can you avoid or minimize this new tax? In a word… planning. Plan ahead, consult with us, when you’re expecting a large windfall, or when selling long held investment assets. There are usually options available in the planning stages. But once completed… there may not be any choice but to report the transaction as it occurred.

    Now might be a good time to change the source of some of your income to help reduce the risk of paying this additional tax. One might consider investing in tax-exempt bonds. The reasoning behind investing in tax-exempt bonds is the interest income would not be included in the AGI or net investment income. Some might consider investing in tax-deferred annuities. Others might consider investing in rental real estate. Even though rental real estate is considered a passive activity, rental real estate usually generates a net loss after depreciation, so there would be no net investment income to tax. If you believe that you might be affected by the new Medicare Surtax, make an appointment with us to discuss how you might be able to reduce or avoid paying all-together the additional 3.8% tax.