Richard A. Lindsey, CPA

Lindsey & Waldo, LLC – Certified Public Accountants

  • Jan 24

    Approximately 3.4 million taxpayers claimed the home office deduction in 2010. Would you believe the IRS just made it easier? I know – hard to believe, but they did. This year the IRS has issued a simplified method of deducting the home office. Of course you still have to meet the same home office requirements that have always been in place, regular and exclusive use as your main office, but it’s now easier with less paperwork and little time spent on record-keeping.

    The simplified method allows you to deduct five dollars per square foot of your home office up to a maximum of 300 square feet. However, the home office deduction cannot exceed your business income. The new simplified method allows you to deduct the home office without keeping track of all your utilities, maintenance and other expenses. And don’t fret, you could still deduct the mortgage interest paid, real estate taxes, and casualty losses on Schedule A as an itemized deduction.

    There are, however, some disadvantages to using the simplified method versus the actual expense method. You should know that under the simplified method you are forfeiting any previous home office deduction carryforwards and the ability to carry forward any excess deduction to a future year. Also, the simplified method does not take into consideration depreciation for your home office. With the actual expense method you can apply previous year carryforwards (limited to business income), carry the excess deduction to future years, and calculate depreciation on your home office.

    Afraid of making a mistake? No need to worry, the decision is not permanent. If you choose the simplified method and then believe it wasn’t the best decision for you, next year you can change the home office deduction method back to the actual expense method. Just know that after you file your return, the IRS will not allow you to amend your return to reflect the change in the method of the home office deduction. So, let us help you to decide if the simplified or the actual method for the home office deduction is best for you in your situation.

  • Jan 10

    The first full week of the year is often cited as one of the most difficult and depressing weeks of the year. Far from shiny newness, experts say that with all the let-down after the holidays, coming back to work, or leaving behind family, can bring a heightened sense of loss. That, combined with the fact that we’re staring at 2 to 4 months still left of winter (depending upon what part of the country you call home, of course — we have clients and friends reading this from across the country)…

    Well, it can be a tough week.

    Hope you don’t mind if I volunteer not only to provide authoritative and actionable tax advice for your specific situation, but also to play a role as a “coach” for your finances, and even your mindset.

    This is why our clients and their friends seek us out for more than simple tax-preparation, but a whole host of other services as well — from planning, to business services, to simple encouragement. I get to be someone in your life who says: “You can do this. You’re not alone.”

    Here’s the thing about most financial resolutions: They don’t usually last even until the end of January. That’s because making a permanent change in our behavior requires both time and a steely resolve. But I’ve found that I can develop financial character one action at a time.

    So in that vein, here are some financial practices to take you from pauper to prince or princess if you add one each year. If you’ve already got one down, move to the next one on the list.

    #1 MOST CRITICAL: Resolve to become (and stay) debt free. Now, I’m not Dave Ramsey, but there’s a reason why he’s become so popular: his approach works. I’d say that you can have a fixed rate fixed year traditional mortgage on your house—but nothing else, please. No equity line of credit on your house. No car payments. Certainly no credit card debt! Because you simply have to learn to live within your income—which, unfortunately, sometimes means going without. The millionaires among us are really frugal. So learn to enjoy that process, and it’s a fantastic start.

    #2 Automate Your Savings (aka Pay Yourself First). You can start by getting the entire match if your company offers a 401(k) plan. Usually this translates to saving 5% of your salary while the company contributes a 4% match, which is the fastest way to get an 80% return on your money! Most Americans forgo this match, believing they need to spend 100% of their salary. But you can learn to think like a millionaire and live well on 95% of what you make. If you don’t have a 401(k) plan, act like you do, and sock away 5% automatically.

    #3 Fully Fund Your 2014 Roth IRA. This is $5,500 in 2014 and $6,500 if you are older than age 50. If you can’t manage the entire amount in January, put in $416 monthly. Automating deposits in an employer-defined contribution plan is easy. Fortunately, automating savings in a Roth IRA or a taxable savings plan is equally painless. Most brokers offer an automatic money link between your checking account and an investment account. Set your savings on autopilot, baby!

    Remember— the steps build off one another, so if you already have done the first three, here’s your next step:

    #4 Save Another 5% In a Taxable Investment Account. Automating savings is great, automating investment is even greater. Keyword here: automate. At this point you’re hitting the mark of saving 15-20% of your income. That’s a fast-track to long-term prosperity.

    Obviously that’s not all, grasshopper. But these will get you started.

  • Jan 2

    Several of the Red Sox best known players swore off shaving until they won the World Series…making way for beard-yanking rituals after a big hit and “Fear The Beard” headlines.

    In the world of baseball, it’s just one more crazy superstition and a way for Red Sox supporters to bond. Baseball players have been known to be notoriously superstitious throughout the years. Many feel it gives them more luck and a better chance to win. For instance, Atlanta Braves Elliot Johnson must have a piece of Super Bubble grape-flavored gum in his mouth when he’s on defense. When his team bats, he gets rid of the grape gum and exchanges it for watermelon-flavored gum.

    Cardinals relief pitcher, Randy Choate must have everything around him cleaned up before he can begin to pitch. If a napkin blows near him on the mound when he pitches, he’ll come off the mound, pick up the napkin and stick it in his pocket before continuing. He has other routines he follows as well…such as never picking up the ball off the dirt when he comes out to the mound. If it’s in the dirt, he has to kick it into the grass and then pick it up.

    Of course, superstitions aren’t the only thing that people believe attributes to success…

    You’ll also hear people attribute success to “having good genes,” “having athleticism,” “blessed with talent” or “got lucky.”

    This happens in business too. Not so much superstitions, but the idea that people are successful for no real reason. They were in the right place at the right time. They have the right degree. There was no work involved—it just “happened.”

    But, the truth is success comes from something else. Something most people don’t want to hear.

    Frankly, I’m puzzled by it and even slightly troubled by this trend.

    Anybody who thinks these people got there by luck or because they were blessed or because they are talented or smart or consistently execute some superstitious ritual…just isn’t paying attention.

    They got there because of hard work. If you look at successful people, you would see they took a lot of action and implemented a load of campaigns and systems in order to earn that distinction.

    Donald Trump, for instance, starts his day at 5:00 am. He works all day, goes home for dinner and is back out every night to attend some social function. In between, he’s doing interviews, on TV, hyping books, and giving speeches.

    And here’s the good news out of all this – if you’re willing to put the work in, anyone can be successful.

    So, there are three things about work you need to know.

    First, you have to be consistent. What I mean by that is that you have to keep showing up. In a way it’s similar to getting and staying in shape. If it takes you three months to lose say 15 pounds, your work isn’t over. You have to keep exercising. You can’t just stop or you’re going to gain back the weight.

    Michael Jordan, considered by many to be the greatest basketball player of all time, has an incredible work ethic. When told to take a break, he would continue working on his game. In shootarounds, he would arrive earlier than everyone else and stay later. He had the reputation for working harder than anyone else. For example, he’d arrive way before tip-off on game days to shoot free-throws and practice immediately after a loss.

    Hard work isn’t something that comes naturally. You have to train yourself. Obviously it is easier to procrastinate and put off doing something until the opportunity has passed. But, behind every successful person is someone who has trained himself to work hard.

    Former British Prime Minister, the late Margaret Thatcher once said, “I do not know anyone who has got to the top without hard work. That is the recipe. It will not always get you to the top, but it should get you pretty near.”

    So, you’ve got to do the work.

    The second thing is that it’s a good idea to find something that sort of blurs the line between work and play. In other words, love what you do.

    If you don’t lose track of time during the day, if your days don’t fly effortlessly by – you’re probably in the wrong business. Most everyone has had the type of job where you count down the hours, minutes and seconds until your shift is over.

    That’s no way to spend the bulk of your day.  So if you don’t love what you do, put a plan together today to implement positive change in your life.

    The third thing about work is you’ve got to work smart, not dumb. One of the obvious ways to do this (that most don’t do) is to work without interruption. You’ve got to work without looking at your text messages, or answering your phone every time it rings, or checking your email every five minutes. You’ve got to control your work environment. Don’t let it control you.

    The beards may have contributed to the fun, but the truth is the Red Sox got to the World Series through good old fashioned blood, sweat and tears. And if you too want to be the winner, you’ll have to stop making excuses and do it the same way—through consistently doing the work.

    One of the reasons that people misinterpret what it really takes to be successful is because often super achievers make it look so easy.

    There’s a Nike ad in which Michael Jordan says:

    “Maybe it was my own fault. Maybe I lead you to believe it was easy when it wasn’t. Maybe I made you think my highlights started at the free throw line and not in the gym. Maybe I made you think that every shot I took was a game winner. That my game was built on flash and not fire. Maybe it’s my fault that you didn’t see that failure gave me strength, that my pain was my motivation. Maybe I lead you to believe that basketball was a God-given gift and not something that I worked for every single day of my life. Maybe I destroyed the game. Or maybe…you’re just making excuses.”

    If you want to know how to join the ranks of the super achievers…and get more accomplished much faster without having super-human powers, having to work crazy-stupid hours, or having to hire an army to help you, check out “Your Best Year Ever.”

    In it, I reveal the five big keys that are going to be necessary and helpful for you to have your best year ever in 2014 and each of those five keys have anywhere from three to seven components. This is not information you’ll want to consume once and stick in a drawer. This is posted on the wall next to my monitor so that I am regularly reminded of what I need to do be successful. You’ll want to do the same.

    To request your free copy of “Your Best Year Ever” call 251-633-4070 or send an email to zevaclindsey@comcast.net with the subject line “Your Best Year Ever.” Be sure to include your name and address. There is no obligation on your part. We’ll get it right to you.