A payday loan is a short-term loan without a credit check that is intended to bridge the borrower’s cashflow gap between paydays. Typically, a payday loan may be for $500 or so. A payday loan allows customers to get cash for a short time period against their next paycheck. A customer with an active checking account, direct deposit and a job can receive funds in their account within a short time.

The loan is typically given in cash and is secured by the borrower’s post-dated check that includes the original loan principal and accrued interest. The maturity date usually coincides with the borrower’s next payday. On the maturity date, the lender processes the check traditionally or through electronic withdrawal from the borrower’s checking account.

Payday lenders typically operate small stores or franchises, but large financial service providers also offer variations on the payday advance.

Payday lending is the subject of controversy, due to its high interest rate. Some critics claim that payday lenders target the young and the poor, those near military bases and in low-income communities, who may not understand the time value of money. Others go further, comparing payday lenders to loan sharks due to high interest rates– typically 250% or more when annualized. It is argued that the interest rates on payday lending unfairly hurts the poor, compared to the middle class who pay at most 25% or so on their credit cards.

Defenders of the higher interest rates note that payday loan processing costs do not differ much from their higher-principal, longer-term counterparts such as home mortgages. They argue that conventional interest rates at these lower dollar amounts and shorter terms would not be profitable.

They also argue that the interest on a payday loan is less than the costs associated with bounced checks or late credit card payments. They also argue that the interest cost accurately reflects the increased risk of default, a concept known as risk-based pricing.

Filed under: Loans

Having the right team of advisors is critical to achieving your financial goals faster than you ever thought possible. For most people, taxes are the single biggest expense. This makes finding the right tax preparer for your team extremely important.

HOW DO YOU FIND A TAX PREPARER THAT IS RIGHT FOR YOU?

First, not all tax preparers are the same. I previously wrote an article about this last year titled: “Tax Returns – Are they really all created equal”, and you may be as surprised as other readers about just how much tax return preparation can vary.

In fact, I calculated the average savings I typically find from annual tax savings, reducing professional fees and audit assessments. In total, the average savings are:

- $23,750 Annual tax savings

- $5,000 Audit defense savings

- $10,000 Reduced audit assessment savings

- $50,000 Reduced legal fees

- $3,000 Reduced tax return preparation fees

This is a total average potential savings of $91,750! Your tax preparer does make a difference! How much more could you do with these savings?

Second, the right tax preparer for you depends on what is important to you. Take a minute to answer this question:

WHAT MAKES YOUR TAX RETURN SUCCESSFUL?

How you answer this question will impact what type of tax preparer you need on your team. I’ve asked this questions to clients, prospects and colleagues. I have compiled the most popular answers and what it means to you as you find the tax preparer for your team.

ANSWER #1: Paying the least amount of tax legally

Your tax preparer needs to:

- Know the tax law very well and know how to be creative legally.

- Ask you a lot of questions about your situation in order to understand your situation and goals.

- Have a review process where at least one other person reviews your return solely for the purpose of how to reduce your taxes legally.

HERE ARE SEVEN (7) QUESTIONS YOU SHOULD ASK YOUR TAX PREPARER TO DETERMINE IF IT’S A GOOD FIT:

Q1: Can you tell me about the other ___________ (your industry) you service?

A: Your tax preparer needs to know how the tax law applies to your situation. Having other clients in your industry or with similar investments indicates that the tax preparer is likely to be familiar with the tax laws that impact you.

Q2: Who will be working on my tax return?

A: It’s very common (and a good business practice) for tax preparers to have staff prepare your tax return. You want to make sure the other people working on your return have the same level of expertise.

Q3: What is your tax return review process?

A: Tax preparers who are focused on reducing your taxes will have this built into their review process. Usually it involves having another experienced tax preparer review the return solely for the purpose of finding ways to reduce your taxes.

Q4: What would you have done differently on my past tax return?

A: Show the tax preparer you are interviewing your prior year tax return. Creative tax preparers will be able to give you at least one idea of what you can do to reduce your taxes by looking at your tax return for just a few minutes. If it’s creativity you are after, this is a great question to ask! But don’t expect the tax preparer to give you all the details right then and there – that’s why you pay them!

Q5: How much can you save me in taxes?

A: While it’s difficult for any tax preparer to answer this in just a few minutes of looking at your past tax return, it is possible for them to know if they can save you taxes after spending 30 minutes with you.

Q6: What deadlines do you impose on clients?

A: This may seem like an odd question for minimizing your taxes but it has a direct impact. If your tax preparer allows you to provide your information a week before the tax return is due, it’s very unlikely that the tax preparer will have the time to focus on your return to truly minimize your taxes. Tax preparers that want to reduce your taxes want your tax return information early and will communicate that to you.

Q7: What recent tax law changes should I be aware of?
A: To minimize your taxes, your tax preparer needs to know the tax law inside and out, which includes the latest changes. Your tax preparer needs to be able to answer this question without hesitation.

ANSWER #2: Minimizing tax return preparation fees Your tax preparer needs to:

- Focus on the tax work and recommend someone else for the non-tax work (such as bookkeeping).

- Request tax information in a certain format.

- Require you to input your information online.

HERE ARE TWO (2) QUESTIONS YOU SHOULD ASK YOUR TAX PREPARER REGARDING MINIMIZING RETURN PREPARATION FEES TO DETERMINE IF IT’S A GOOD FIT:

Q1: What can I do to reduce my tax return preparation fees?

A: To minimize your tax return preparation fees, your tax preparer always needs to have your fees in mind. Ask your tax preparer what you can do to reduce your fees. If you don’t get at least 2 suggestions, your tax preparer probably isn’t thinking about how to keep your fees low.

Common suggestions include:

- Have someone other than the tax preparer do your bookkeeping. I am always skeptical when a tax preparer does the bookkeeping. First, they either charge an arm and leg or if they reduce their rates to accommodate you, it means they don’t spend their time entirely on tax issues, which could indicate their tax skills aren’t up to par.

- Organize your information. Don’t bring your tax preparer a shoebox! A tax preparer that is really focused on keeping your fees down will have forms, spreadsheets and other tools available for you to use to organize your tax return information.

- Enter your information online. Many tax preparers now require clients to input their information online. Accurately entered information can help reduce fees. Caution: Information that is entered inaccurately can increase your fees!

Q2: What is your fee structure?

A: Your tax preparer needs to be able to answer this question with confidence. Any wavering could indicate that the tax preparer knows the fees are too high for you but just doesn’t want to tell you. Unfortunately in these situations, you find out too late!

ANSWER #3: Reducing audit risk Your tax preparer needs to:

- Know the tax law very well and how to properly report your activity.

- Understand the IRS’s current “hot buttons” or “red flags.”

- Offer an audit defense plan.

HERE ARE FOUR (4) QUESTIONS YOU SHOULD ASK YOUR TAX PREPARER IN REGARDS TO REDUCING AUDIT RISK TO DETERMINE IF IT’S A GOOD FIT:

Q1: How many audits have you been through and what triggered the audit?

A: The most important part of this question is what triggered the audit. If it was triggered by how something was reported, then that may be something the tax preparer had control over (and may be a bad sign for you).

Q2: What was the outcome of the audits you have been through?

A: A return can be randomly selected for audit or selected because of a certain activity (even though it was reported correctly). So it’s important to understand the outcome of the audits. Was additional tax assessed or were there no changes? Additional tax may indicate that something was not reported properly.

Q3: Do you offer an audit defense plan?

A: Tax preparers that are confident in their work will offer an “insurance” program that covers their professional fees to handle your audit if your return is selected for audit.

Q4: What is your tax return review process?

A: Although tax returns can be selected randomly for audit, many are selected due to how items are reported on the tax return. Tax preparers who are focused on reducing audit risk will have a review process that includes another tax preparer reviewing your return solely for accuracy of reporting.

Be selective with the tax preparer you put on your team. The average savings I find for my clients is over $90,000! Your tax preparer makes a difference!

Filed under: Tax

Let’s get something straight to start with. There is NO HIDDEN or Shadow Inventory of Distressed Assets.

I know many of you keep hearing that the second wave of foreclosures is coming. You could be thinking that because you are having difficulty in obtaining large bulk reo tapes, that the Banks must be holding or hoarding houses back from the market or that perhaps they are about to flood the market with thousands of properties.

We’ve been hearing that from many people for over a year now. I have never bought into it, because as I have always stated, is that the market can handle more inventory than most would think There is so much pent up demand it’s crazy.

The assumption that I have never challenged, until now, is that these foreclosures EVEN EXIST! Take a look at the latest numbers crunched at Foreclosure Radar.

I don’t know how you can argue with the data, the sales volume has been so great it is outpacing the numbers of foreclosures hitting the market. We have been saying that for over a year!

It is important to point out that there are massive numbers of defaults and foreclosure sales that are “hung up”. It’s an absolutely huge number, but still, there’s not one person I’ve spoken to that believes that there are masses of foreclosures post sale, sitting inactive that are not even being placed on the market.

The crazy thing is that every investor buyer wants to believe that they can purchase bulk these single family residential (SFR) tapes in CA, NV, AZ at 50-70 cents on the dollar. These investors are so motivated at the prospect that they are willing to treasure hunt for inventory that does NOT exist.

The reality is that our company is calling the banks every single day and I can tell you from our experience that nothing exists in CA, AZ, NV in bulk SFR tapes at discount prices (we have strong relationships with almost all the mid sized institutions).

The banks at best only have 1-5 REO properties at a time and they are unloading those via Realtors and brokers at NO discount. Asset managers are telling us that most of their bank owned properties are actually selling at full market value without any need to discount! The markets are moving in these states!

The inventory in the Southwest has dried up and the demand is obviously heading east across the Midwest. I can tell you that demand FAR exceeds supply so we only expect bulk SFR tapes in the Midwest and east to last another 12-24 months. The inventory that is available will NEVER be cheaper than it is now.

I am sure many of you have seen large, pennies on the dollar California Single Family Residential “tapes” flying around the internet, but I can assure you that it is NOT authentic product.

Many buyers are frustrated that they can’t find anything and it’s simply because it’s GONE. Anyone telling you that they have $200M – $1B in bulk single family homes at thirty (30) cents on the dollar is a joker or a part of a daisy chain of jokers…

So, check out the bulk market for yourself – the implications are huge for savvy investors! The Midwest is a market we are promoting because of the stock availability at low prices. Investors who are waiting to buy may really, really miss the boat. Available inventory has never been sold at such low prices. Waiting may be harmful to your wealth!

Tags: Assumption, Banks, Foreclosure Sales, Foreclosures, Investors, Sales Volume, Sfr, Single Day
Filed under: Banking

The old saying goes that death and taxes are the only two certainties in life. Maybe so and maybe not. I’m discovering a third certainty in life: most Americans are paying way too much in taxes to Uncle Sam. There are hundreds of tax deductible business expenses for small and home-based businesses that Americans currently overlook.

Did you know that if you have a home-based business and you take certain steps you could qualify for up to $5,000 per year in tax savings? That means that you could either pay Uncle Sam up to $5,000 less up front in quarterly tax payments or withholdings, or you could get a bigger refund on the back end. You just have to know which tax deductible business expenses to look for.

Now $5,000 sounds like a lot of money so how is it possible that so many people don’t know about these deductions? More importantly, why don’t their tax accountants know about these tax deductible business expenses?

The answer is simple. According to the National Taxpayers Union, the U.S. Tax Code has over 18,500 pages and about 5 million words. That’s a lot of pages and words, and most over-burdened tax accountants do not have time to focus on the sections that relate specifically to home-based businesses. Most accountants do well to just keep current on the basics–and I don’t blame them. That’s a lot to keep up with.

But if you are interested in paying up to $5,000 less to Uncle Sam every year then it’s up to you to figure out which tax deductible business expenses you can take. But don’t worry. There are experts out there who do focus on tax law for home-based business and they have detailed the exact deductions you can take.

I just reviewed the book “It’s How Much You Keep That Counts” by Ron Mueller and this book lays out all those tax deductible business expenses in plain English. I thought I knew a lot about what I could deduct in my home business but Ron’s book points out dozens of deductions I missed. Here are just a couple of major deductions that amaze me.

1. If you have a home-based business and are also employed at a regular job, you can deduct all the commuting miles between your house and your regular job. The trick? You have to work your home-based business before you leave from work and after you get back. You also have to document your activities in your home-based business that you did before and after your regular job. But documentation only takes a couple of minutes at the end of the day. Plus, mileage is one of the major tax deductible business expenses in a home business.

2. You can hire your kids (ages 7 to 18) to do simple work in your business, pay them an allowance for this work, and deduct the cost of this allowance as a home business expense. With the right setup and documentation, you can actually use this method to shelter up to $5,300 in taxes per child. Put this money into a custodial bank account you hold jointly with your child and use the money to pay for your child’s clothing, books, education, or even their wedding. This is one of the least-known tax deductible business expenses and you can use it legally if you have the proper documentation and setup.

You may be wondering whether these tax deductible business expenses are loopholes, gray areas, or just plain shady business. They are not. Congress has actually approved these tax deductions for small and home-based businesses because these businesses are good for the economy. Congress wants to encourage more people to create these businesses because small businesses make up more than 99.7% of all employers and create 75% of all the jobs in our economy (according to the Census Bureau). These deductions are 100% legal, ethical, and good for the economy.

The key to taking advantage of these tax deductible business expenses, of course, is learning how to properly set up your business and document your business activities so you remain legal. The steps are not difficult but you can’t be sloppy about your documentation. Ron Mueller’s book is absolutely a great place to start. To really stay on track, you might also look for business partners and mentors who can coach you and educate you along the way, many of whom are found in network marketing businesses, community service organizations (like the Chamber of Commerce), and online forums dedicated to home business.

Filed under: Accounting

Accounting is a popular business term that has been widely used by the business of all sizes. Accounting is the essence of business, without which the business cannot function. It provides the knowledge where we gain profit and where we lose. It is a basic practice followed by our ancestors. When they start merchandising with others, they started recording the money transactions. This is the starting point of the process called “Accounting”. This is a global practice, accepted by businesses in the entire world. This article highlights the nature and the scope of accounting.

Accounting tasks are very team oriented. Accounting career starts as a junior member and it ends with even a CFO. The initial responsibilities may be entering the vouchers, recording the transactions etc. Accounting provides the statistical report of the economic status of the business entity. This is the main nature of accounting. It helps the financial decision makers to understand the current economic status to make the managerial decisions. It is necessary to keep the systematic process of recording the daily business activities in terms of money. It is mandatory to record the details of goods and services supplied or purchased, debts are incurred by the customer or credit is extended, you received cash or paid out. These are all the typical transactions which have to be produced in monetary terms. The crucial part of accounting is the preparation of financial statement and the balance sheet. This would provide you the status of your business and make you understand the expenses and the profits. Then you could allocate the expenses according to the profit margin.

Considering the scope of accounting, it has its applications on the sectors such as schools, colleges, universities, government organization, NGOs, small, medium and large scale commercial entities.

Financial Jobs:

Accounting experts can get into banking, accounting, corporate finance, real estate finance and investment.

Accounting job:

Accounting field is a wonderful area where the accountants could work independently. According to the job rated directory, accounting got the fifth best place in terms of low stress, high remuneration and lot of independence. As the demand grows high in accounting field, the recruitment are also plenty.

Financial planning:

Accountants with finance background have the wonderful opportunity to work with investment advisory services, insurance and huge financial sectors. There are lot of courses available for financial and investment planning. The international college of financial planning, New Delhi provides certified training course in financial planning.

Business finance:

This is the special area where the accountants got more chances to shine. The wide range of activities followed by the business finance sectors are fund raising, investment banking, treasury management, and foreign exchange etc., The Indian School of finance offers a master degree in Finance.

Hence, there are plenty of opportunities for the students who have completed their graduations in accounting and finance. Accounting is an ever green field which grows dramatically and produces the same growth in the career of the accounting professionals as well.

Filed under: Accounting